Social Networks

Whenever I explain to someone that I make some of my money from websites they tend to look at me with a rather perplexed expression. The fact that websites are free to look at and that anyone can go there, means they don’t obviously lend themselves to making money. However websites do make money and sometimes quite a lot of cash, which calls into question why we pay so much for everything else.

How Giving Something Away Free Makes You Money

What people who don’t understand the whole online money-making malarkey don’t understand is that although you let visitors look at the content for free, there is also something you don’t give away for free – and that’s the advertising space. Here advertisers pay for the space on the website because they know that it will be seen by hundreds or even thousands of people a day. This is what makes websites so potentially lucrative, and it’s in fact by giving them away free that we accomplish this kind of exposure.

And actually websites aren’t the very first example of this business model and there are many others that people are more familiar with. For instance take a look at television – many television channels are free but of course they cost huge sums to run and to get the programs, so of course it’s again the advertising that pays for it – by letting people watch for free the television channel is able to get enough of an audience that they can then sell this exposure at a premium to advertisers and some channels of course will take this to an extreme (E4 I’m looking at you!).

Another example is free magazines and free papers. Again these generate revenue from the adverts that appear in them, and by handing out free copies of a newspaper it’s possible to get the circulation up into the tens of thousands with relative ease and that’s why the advertisers are so keen to advertise there. Shortlist – a popular free magazine in the UK – often has an advert instead of a front cover even.

What We Can Learn From Websites

This business model is in many ways the future of business in general, and it shows us how we can make more money sometimes by giving things away for free.  There are many more examples of this too such as free apps, and such as albums that give away their music for free so that their tours will sell out, or so that they will get ‘donations’ from fans.

I have often wondered whether you couldn’t make a coffee shop for free. You could serve basic tea and ground coffee and let people sit in your coffee shop free of charge, but make the money from your advertising when you had a captive audience and a ‘hip’ reputation.

Of course this all makes a lot more sense when you’re product or service is digital because you have such low overheads comparatively. Next time you’re launching a new venture then, think of what you can learn from websites and other free ventures – is there any way you could offer your product or service for fre

Peter is an expert in internet maketing and an avid blogger. He suggests all business firms to do a thorough research online before choosing a seo ct to boost their online presence.

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