Selecting the best revenue model options for your digital business
A good revenue model is a proven technique used by digital businesses globally, from startups to global corporations, to generate income from traffic on their website, mobile apps, and via digital channels.
The 10 digital revenue model options explained in this include both ad revenue models and charging for access to a digital service including freemium revenue models where limited free access is provided with fees charged for the full service.
I created this post originally in 2010 to support a revenue model spreadsheet for site owners to forecast their revenue generation. The main parameters you need to set are the variables for each Ad Unit or Container Type (blue fields) and it works out the revenue earning (orange fields) for you!
The site ad revenue model
If you 'plug-in' some average figures for pay-for-performance-based advertising options like cost per click or cost per action…
What do you think is the best, i.e. most useful marketing model? Download our free marketing models guide and learn how to apply them in your strategy and planning
You may have noticed we're fans of using practical models as tools to support marketing strategy development. We believe a clear, simple model gives us a framework to assess how we're doing things now compared to our competitors and plan growth strategies for the future. They're also great for communicating the purpose and reason behind a strategy you are pursuing.
I think most would agree that models are useful "Mind Tools" to structure thinking and communicate a strategy, but there's a problem. Over the years, many models have been developed and some are academic rather than of practical application in the "real world". So many marketing models have been developed over the years, that it can be overwhelming to know what to use…
Amazon marketing strategy: Business case study, revenue model and culture of customer metrics: History of Amazon.com and marketing objectives
In the first quarter of 2021, Amazon reported net sales of $108.518 billion, a 43.8% increase from $75.452 billion in the same quarter in 2020. Net service sales, which include Amazon’s fulfillment services for sellers on its marketplaces, hit $51.027 billion, up 51.8% from the prior year’s $33.611 billion. The Amazon marketing strategy we are familiar with today has evolved since it was founded in 1994.
I've highlighted the Amazon marketing strategy case study in my books for nearly 20 years now since I think all types of businesses can learn from their digital business strategy, their response to the pandemic is impressive but not entirely surprising for a brand which is 'customer obsessed'.
From startups and small…
How do you summarise a business model canvas or marketing plan for online startups using a single sheet of A4? Our top business model frameworks for you
Defining a clear online business model framework is essential for a new startup online business to help create a sustainable business and communicate the features of their new business to partners and within the company.
Reviewing business models is also important for existing businesses thinking about options to refine their business model or add new services to their offerings in the light of new opportunities made possible by the Internet.
As you know, I'm a big fan of simple frameworks to help communicate strategy. In particular, I love the Business Model Canvas which is a valuable framework for summarizing strategy for online businesses. It was published as part of a co-creation creative commons project involving 470 practitioners from 45 countries.
We feature it as part of our…
White labeling can help SMEs/SMBs compete with the bigger players - here's how
The concept behind white label marketing is not entirely new. There are many white label services that marketing companies use to make their lives easier. The big benefit of white labeling is that it allows businesses an easy way to expand their service offerings to their clients without having to develop the product or service themselves.
Many businesses don’t want to waste time and internal resources in areas that can take years to become proficient in. By offering white label services to your customers it can allow your company to specialize in your area of expertise and provide excellent customer service to your customer base in real time.
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Chart of the Day: How do Amazon, Facebook, Google, Microsoft, and Amazon make their money?
In this article, I defined Eight online revenue models along with how they are calculated, so they could be applied to new revenue models of startups.
In this chart of the day, we can see a comparison of the four / five dominant digital brands sometimes known as GAFA of FAMGA or even the frightful five.
Of these five digital businesses, it's no surprise to see that Alphabet (Google companies including their research and development) and Facebook are dominated by ad sales. Apple sales are dominated by product sales with iPhone much more important that Mac laptops and iPad. Data services like iTunes and storage are still relatively small (11%).
Amazon is different to the other four in that it focuses on online retail, yet this is less…
New research explains opportunities and threats
Since social networks like Facebook, LinkedIn and Twitter launched, social media has offered good organic opportunities for publishers and other brands to share their content and so gain awareness and new subscribers.
As social networks have sought to keep more visitors on their sites, tools like Facebook Instant articles and Google's AMP - offers new opportunities for marketers to share their content, but at the same time, a threat since visitors have less opportunities to interact with the publisher website or register. Given this, this new research from Napco Research and Publishing Executive has useful insight for online publishers.
This chart shows the publisher's view of the threat, which is substantial and can lead to a need to explore alternatives or avoid new techniques like Instant Articles.
Instant Articles is viewed as the biggest threat with LinkedIn not far behind for B2B…
Adapting the Growth/Share Matrix to Marketing
The Growth/Share Matrix is a business strategy tool that's been around for years, but it remains a useful way to think strategically about where you make investments and allocate company budgets. Although it's a general business strategy tool, it can be very useful for thinking about allocating marketing spend and so it is as important for marketers as it is for boards making big strategy decisions. The model is also known as the BCG model, the acronym of the group that created it.
The model involves mapping business divisions or products across two key dimensions; Market Share and Market Growth, which then maps them into one of four quadrants. Products/Divisions operating with low market share in a low-growth market are dogs, those operating with a high market share in a low-growth market are cash cows. Divisions or products serving a high growth market but without…
How Spotify built a $5 billion business with more than 50 million subscribers
Spotify is a streaming music service originally developed in 2006 in Sweden and launching in 2008. Spotify Ltd. now operates as the parent company in London while Spotify AB manages research and development in Stockholm.
This case study about the online music subscription service illustrates how different elements of the mix can be varied online. It also highlights success factors for developing an online marketing strategy. We've included it on Smart Insights for readers of Dave Chaffey's books before the next edition is publishes - it replaces an earlier case study
In early 2015, Spotify was valued at more than $5 billion. Investments in the growth of the company have been $1/2 billion in seven rounds of funding from 17 investors. It is currently rumoured to be about to…
5 Franchising Q&As with a look at opportunities in Australia
Becoming a small business owner has grown into one of the hottest topics in the world business news in the past few years. With an over 90% prosperity in the franchise sector, running your own business is a one-way ticket to success. Yet, the unlimited power which franchise enterprises hold is often deeply buried under a messy pile of obscure researches and heavy statistics. Understanding the basics of franchising is the first step towards starting a successful business. This article will give answers to the top most asked franchising questions helping you improve your organisational and personal management skills.
Q1. What is a Franchise?
Franchise is generally an authorisation granted by a company or product owner which gives a person the right to market a specific service or product by using the trade name or trademark of another business. The authorised person is…