How many billions in potential advertising revenue do we leave on the table each year?
Fred
I'll bite - it's about time for our yearly advert flame war anyway. The answer is 0 dollars. That is because as soon as we put the advertising up we lose credibility and Wikipedia is no more.
- Brian
On Fri, Nov 5, 2010 at 4:44 PM, Fred Bauder fredbaud@fairpoint.net wrote:
How many billions in potential advertising revenue do we leave on the table each year?
Fred
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On 5 November 2010 22:44, Fred Bauder fredbaud@fairpoint.net wrote:
How many billions in potential advertising revenue do we leave on the table each year?
Less than one soul.
- d.
An'n 05.11.2010 23:44, hett Fred Bauder schreven:
How many billions in potential advertising revenue do we leave on the table each year?
Fred
According to alexa.com Facebook has a 3-month global pageview share of 4.74010%. Wikipedia has 0.52984%. That's about 1/9th. According to Wikipedia Facebook made US$800 million in revenue in 2009. 1/9th is US$89 million. Of course that's not a realistic number. Just an extremely vague approximation of an theoretically possible value. Wikipedia has the advantage that our content has very defined topics and ads matching the article's topic should be much more relevant and interesting to the user than Facebook's ads. But on the other hand Wikipedia is much more limited and cannot use prominent and intrusive ads, which will limit the possible revenue. And of course Facebook has (again according to Wikipedia) 1700+ employees while Wikimedia has just a small fraction of that. It's hardly possible to create similar revenue as Facebook without additional employees.
Even will all their revenue, Facebook is not yet profitable.
Marcus Buck User:Slomox
On Sat, Nov 6, 2010 at 00:53, Marcus Buck me@marcusbuck.org wrote:
An'n 05.11.2010 23:44, hett Fred Bauder schreven:
How many billions in potential advertising revenue do we leave on the table each year?
Fred
According to alexa.com Facebook has a 3-month global pageview share of 4.74010%. Wikipedia has 0.52984%. That's about 1/9th. According to Wikipedia Facebook made US$800 million in revenue in 2009. 1/9th is US$89 million. Of course that's not a realistic number. Just an extremely vague approximation of an theoretically possible value. Wikipedia has the advantage that our content has very defined topics and ads matching the article's topic should be much more relevant and interesting to the user than Facebook's ads. But on the other hand Wikipedia is much more limited and cannot use prominent and intrusive ads, which will limit the possible revenue. And of course Facebook has (again according to Wikipedia) 1700+ employees while Wikimedia has just a small fraction of that. It's hardly possible to create similar revenue as Facebook without additional employees.
Even will all their revenue, Facebook is not yet profitable.
Thanks for making approximation!
I was thinking that WMF and chapters would have much more money with ads. However, ~$100M is not so bigger amount than $20-22M. Besides that, all chapters except WM DE are far from reaching the limits (while WM DE is not so close to reach the limits). Also, organizations should have capacities to spend money, which should be built through the time.
In other words, it seems that we definitely don't need ads.
On 6 November 2010 03:43, Milos Rancic millosh@gmail.com wrote:
On Sat, Nov 6, 2010 at 00:53, Marcus Buck me@marcusbuck.org wrote:
An'n 05.11.2010 23:44, hett Fred Bauder schreven:
How many billions in potential advertising revenue do we leave on the table each year?
Fred
According to alexa.com Facebook has a 3-month global pageview share of 4.74010%. Wikipedia has 0.52984%. That's about 1/9th. According to Wikipedia Facebook made US$800 million in revenue in 2009. 1/9th is US$89 million. Of course that's not a realistic number. Just an extremely vague approximation of an theoretically possible value. Wikipedia has the advantage that our content has very defined topics and ads matching the article's topic should be much more relevant and interesting to the user than Facebook's ads. But on the other hand Wikipedia is much more limited and cannot use prominent and intrusive ads, which will limit the possible revenue. And of course Facebook has (again according to Wikipedia) 1700+ employees while Wikimedia has just a small fraction of that. It's hardly possible to create similar revenue as Facebook without additional employees.
Even will all their revenue, Facebook is not yet profitable.
Thanks for making approximation!
I was thinking that WMF and chapters would have much more money with ads. However, ~$100M is not so bigger amount than $20-22M. Besides that, all chapters except WM DE are far from reaching the limits (while WM DE is not so close to reach the limits). Also, organizations should have capacities to spend money, which should be built through the time.
In other words, it seems that we definitely don't need ads.
No, we don't *need* ads. But think how much we could improve our infrastructure and software with that money. Think how much content we could help to free. And think how much more international we could become. Personally I think the sacrifice we'd make by advertising is too great, but you have to at least admit it's a tempting proposition.
Anyway, here's some analysis of this very question done back in 2006. Estimates for annual revenue from adverts ranged from $42 billion to $100 billion, and that's without accounting for our growth since then. http://en.wikipedia.org/wiki/Wikipedia:Wikipedia_Signpost/2006-10-30/Wikiped...
Pete / the wub
Anyway, here's some analysis of this very question done back in 2006. Estimates for annual revenue from adverts ranged from $42 billion to $100 billion, and that's without accounting for our growth since then. http://en.wikipedia.org/wiki/Wikipedia:Wikipedia_Signpost/2006-10-30/Wikiped...
Pete / the wub
That's capitalized value, but does reflect an estimate of net annual revenue of at least $500 million.
Fred
On 6 November 2010 10:56, Fred Bauder fredbaud@fairpoint.net wrote:
Anyway, here's some analysis of this very question done back in 2006. Estimates for annual revenue from adverts ranged from $42 billion to $100 billion, and that's without accounting for our growth since then. http://en.wikipedia.org/wiki/Wikipedia:Wikipedia_Signpost/2006-10-30/Wikiped...
Pete / the wub
That's capitalized value, but does reflect an estimate of net annual revenue of at least $500 million.
Oops! Those are the estimated revenues, but obviously should have been in *millions* not billions! My mistake.
Pete / the wub
On Sat, Nov 6, 2010 at 11:38, Peter Coombe thewub.wiki@googlemail.com wrote:
No, we don't *need* ads. But think how much we could improve our infrastructure and software with that money. Think how much content we could help to free. And think how much more international we could become. Personally I think the sacrifice we'd make by advertising is too great, but you have to at least admit it's a tempting proposition.
Wikimedia organizations (WMF and chapters) don't have capacity to spend $100M now; it will have it in few of years. And money from fundraising is increasing well, which means that $100M will be reached probably in that amount of time.
Anyway, here's some analysis of this very question done back in 2006. Estimates for annual revenue from adverts ranged from $42 billion to $100 billion, and that's without accounting for our growth since then. http://en.wikipedia.org/wiki/Wikipedia:Wikipedia_Signpost/2006-10-30/Wikiped...
Fred said that annual revenue is estimated on $500M. I would say that the potential is much higher and that it is comparable with a developing country with 10-20M of inhabitants.
However, unlike three years ago, we are now in the phase when other factors are much more important than money. Structuring the network of organizations and global movement itself is much more important than getting money which is not possible to spend in this moment of time.
On Fri, Nov 5, 2010 at 4:53 PM, Marcus Buck me@marcusbuck.org wrote:
An'n 05.11.2010 23:44, hett Fred Bauder schreven:
How many billions in potential advertising revenue do we leave on the table each year?
Fred
According to alexa.com Facebook has a 3-month global pageview share of 4.74010%. Wikipedia has 0.52984%. That's about 1/9th. According to Wikipedia Facebook made US$800 million in revenue in 2009. 1/9th is US$89 million. Of course that's not a realistic number. Just an extremely vague approximation of an theoretically possible value. Wikipedia has the advantage that our content has very defined topics and ads matching the article's topic should be much more relevant and interesting to the user than Facebook's ads. But on the other hand Wikipedia is much more limited and cannot use prominent and intrusive ads, which will limit the possible revenue. And of course Facebook has (again according to Wikipedia) 1700+ employees while Wikimedia has just a small fraction of that. It's hardly possible to create similar revenue as Facebook without additional employees.
Facebook isn't the greatest analog. One of the limitations is that Facebook isn't really an information site. Content rich sites tend to do better at generating advertising dollars because ads can be targeted to things that people are already searching for.
Let's consider a different rough approximation.
About.com
About.com is part of the About Group, a wholly owned subsidiary of the NY Times. According to their annual report [1], the About Group unit of the NYTimes had an annual revenues of $121 million in 2009. The About Group includes About.com, ConsumerSearch.com, UCompareHealthCare.com, Caloriecount.com and various minor sites (but it appears that more than 90% of their traffic goes through About.com).
According to Alexa, these sites collectively accounted for 0.043% of global pageviews. (Compare to 0.53% for Wikipedia, 4.7% for Facebook, and 5.2% for Google).
So scaling About.com's revenue to Wikipedia's traffic share would estimate $1.5 billion / year.
Like the Facebook estimate, this is also a very rough approximation. An astute observer would note there is a very large range between the $90 M suggested by Marcus's look at Facebook and $1500 M suggested by this look at About.com. Personally, I believe the truth would probably be closer to the high end than the low end, largely because About would seem to be a better analog of what we do than Facebook is. But I also think it would be interesting to look at other comparisons.
-Robert Rohde
On 11/6/2010 4:19 PM, Robert Rohde wrote:
On Fri, Nov 5, 2010 at 4:53 PM, Marcus Buckme@marcusbuck.org wrote:
An'n 05.11.2010 23:44, hett Fred Bauder schreven:
How many billions in potential advertising revenue do we leave on the table each year?
Fred
According to alexa.com Facebook has a 3-month global pageview share of 4.74010%. Wikipedia has 0.52984%. That's about 1/9th. According to Wikipedia Facebook made US$800 million in revenue in 2009. 1/9th is US$89 million. Of course that's not a realistic number. Just an extremely vague approximation of an theoretically possible value. Wikipedia has the advantage that our content has very defined topics and ads matching the article's topic should be much more relevant and interesting to the user than Facebook's ads. But on the other hand Wikipedia is much more limited and cannot use prominent and intrusive ads, which will limit the possible revenue. And of course Facebook has (again according to Wikipedia) 1700+ employees while Wikimedia has just a small fraction of that. It's hardly possible to create similar revenue as Facebook without additional employees.
Facebook isn't the greatest analog. One of the limitations is that Facebook isn't really an information site. Content rich sites tend to do better at generating advertising dollars because ads can be targeted to things that people are already searching for.
Let's consider a different rough approximation.
About.com
About.com is part of the About Group, a wholly owned subsidiary of the NY Times. According to their annual report [1], the About Group unit of the NYTimes had an annual revenues of $121 million in 2009. The About Group includes About.com, ConsumerSearch.com, UCompareHealthCare.com, Caloriecount.com and various minor sites (but it appears that more than 90% of their traffic goes through About.com).
According to Alexa, these sites collectively accounted for 0.043% of global pageviews. (Compare to 0.53% for Wikipedia, 4.7% for Facebook, and 5.2% for Google).
So scaling About.com's revenue to Wikipedia's traffic share would estimate $1.5 billion / year.
Like the Facebook estimate, this is also a very rough approximation. An astute observer would note there is a very large range between the $90 M suggested by Marcus's look at Facebook and $1500 M suggested by this look at About.com. Personally, I believe the truth would probably be closer to the high end than the low end, largely because About would seem to be a better analog of what we do than Facebook is.
I agree that About.com is a better comparison, and one I touched on in the Signpost a few years ago (http://en.wikipedia.org/wiki/Wikipedia:Wikipedia_Signpost/2005-02-28/Vertica...). And it's interesting to see that maybe the site's revenues could begin to justify the price the Times paid for it after all. But in our context, I think it's worth mentioning reasons why scaling the revenues proportionally would likely produce erroneous estimates.
By working toward a particular market niche, About.com can draw a decently reliable if unspectacular audience. It will never be the destination of first choice, but most of what's there has enough value in advertising terms that it can be monetized. In fact, it is easier to monetize than Wikipedia, which would be much less efficient to sell ads for, both on the high end and the low end.
At the bottom of the scale (from an advertising buyer's perspective), Wikipedia has a huge swath of low-value inventory consisting of little-trafficked pages and material of extremely marginal commercial interest. This is almost inevitable for sites with a massive scope, which is why there's still some appeal to Facebook as a point of comparison, and the problem is trying to package or even give away remnant inventory.
You get a different problem at the top of the scale. For the stuff that really draws massive attention, topics where Wikipedia really shines - a tsunami, a new pope, a pop star dying - efforts to monetize such traffic spikes elsewhere have proven largely ineffective. Trying to market that inventory to advertisers is like chasing a pot of gold at the end of a rainbow: you can't recognize the right inventory, connect with the right potential buyers, or do an effective job of selling it fast enough before the traffic has passed you by.
Considering the problems at both the top and the bottom, part of the reason that About.com has survived this long may be by occupying the middle. In terms of selling ads, Wikipedia might be able to command a premium for its prominence, in the same way that advertising in the New York Times carries a premium because it's a "paper of record" to so many people. But in many other ways, Wikipedia is not a great proposition against which to sell advertising. Perhaps it should be no surprise that this is so, considering that Wikipedia was not designed or built for the purpose of being a great proposition against which to sell advertising.
--Michael Snow
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