At the request of a friend I met today with a small group of young, aspiring webpreneurs. These are exactly the kind of people I hope to be connecting with here on the Leap blog, so I was excited about getting a more personal interaction and some instant feedback.
The meeting was very productive, the people were great and I learned a little about how the things I was talking about (the same things I write about here) were being received. Not all of it as I expected or intended, so that will help me do better here going forward.
Here are 2 things I took from it that I wanted to share right away here.
Where’s The Beef?
The big question all of them had for me was did I think now was a bad time to start a web business of any kind?
That’s a fair question and I had anticipated it might come up. Attempting a very poor Senator Ted Stevens impression, I coldly yelled “NO!” to the room. They laughed, but I’m not sure they really knew why.
Here is my reasoning as I explained it to them. Right now lots of small operations are going down. Heck, lots of big companies are dropping to. It’s a terrible time to be an established business with operational costs that were budgeted long before this current down turn hit.
It’s a fact of business that the bigger and more established you become, the more intricate and detailed everything gets, the more you have to operate on a projected budget and the harder it becomes to react to real time conditions.
So when things get tight they have to trim costs in areas other than where they really want to. So people lose jobs, service and support levels decrease, the company image takes hits… it just snowballs. And ultimately, some go completely under.
And while all of that is sad, remember that we’re talking about real people losing their jobs, but the flip side to that is these companies which go under leave a void in their marketplaces, and for the nimble startup who isn’t working on projections from numbers of last year yet that’s an opportunity to launch from.
This applies to companies and startups of all sizes, even the lone-ranger home based startup.
Right now, I assure you, there are a lot of people who have been struggling to make a go at Internet Marketing–maybe you’re one of them–and they are debating with themselves over giving up or plowing forward.
Some will quit. It’s sad to see someone give up their dreams but completely understandable. There are bills to pay, hungry mouths to feed. A steady paycheck from anywhere becomes very attractive when everything seems to be going against you.
But some will stay with it. Those who do will find new elbow room in their niches as others leave. Suddenly they go from being Guppies to Sharks in the same tank.
My point is that if you can afford to do it, then I believe this is a opportunistic time to start up.
It isn’t an easy time. Just because someone else left a void in the marketplace doesn’t mean customers who weren’t spending money with them will buy your products, they may still not spend money for a while and you’ll have to be ready for that.
But, with less crowded waters it is an opportunity for the noobie to really learn how to swim them. To become intimate with your market and get to know your customer’s needs and expectations, so you’ll be fully prepared for the inevitable economic upswing when it comes and they start spending again.
AdSense is great for site publishers! Except for most of the time when it’s the wrong choice…
I talked with the group today a little bit about adsense. And after a few minutes I realized that I was giving them the wrong impression (in my opinion) that adsense is always a reliable and safe revenue stream.
In-fact, I think it is when used on the right kind of web site. But I also think it’s a waste and counter-productive for a majority of web sites.
Here’s what I really think about it in-case I’ve given the wrong impression here on the blog in the past.
If you run a web site where visitors might be looking for a service oriented solution to some problem, then adsense is a fantastic way to monetize your pages.
Put yourself into the mind of the common visitor to your site. What problems are they going to be facing and seeking solutions for? Are the solutions to those problems typically process or product based?
If the answer is process based then you have a good site for running adsense on. Especially if the process is usually performed by some type of professional.
However, if the solution is typically product based, meaning any sort of tool or even a learning aid that would help your visitor eventually perform the process for themselves with no professional help required, then you would be foolish to put adsense on your pages and earn pennies for clicks where you could have earned dollars by putting an affiliate ad for the product in that same place.
I know adsense is easy to setup and start seeing fast money with, but it’s small potatoes compared to what you could earn with the same page real estate through an affiliate product.
So, when appropriate I love adsense, but most of the time I just don’t think it’s appropriate.
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Tags: AdSense, internet marketing
Excellent post, I think you did a great job explaining difference between adsense vs affiliate ads. Sometimes its easy to get caught up with fast adsense revenue with a product site, but with some patience an affiliate link would generate more revenue in the long run.
Good conversation regarding adsense vs. affiliate ads.
However, I’m not sure I agree with the it’s not a good time to start a web business advice, though maybe I misunderstood your intention. Ticketsnow, was bootstrapped during the last downturn and the lack of big spending in the space was a major contributor to them succeeding and eventually selling for $265 million.
I really agree that now is a great time to start up a web business. Because of my niche, I provide a great ROI for my clients. I wouldn’t say business is booming, but it’s definitely growing, especially considering the market conditions.
@icore absolutely, it’s a numbers game. If you have a product based site and run adsense ads, even if they earn you a dollar per click, with an 8% click-through rate you would need 500 visitors to earn $40 off the ads.
But, if you use an affiliate ad where you earn a $20 commission from sales and only got a 0.5% conversion rate you should still earn the same $40 with just 400 visitors.
The difference may seem minor in my example of extreme CTR’s and per-click payouts, but apply it to a site getting thousands of daily visitors and the difference in earnings becomes huge very fast.
@David, you have misunderstood me. I’m 100% in favor of starting up right now for anyone who can and is able to weather the current economic storms.
@Online Tutoring, I’m assuming your niche is in teaching new skill sets of some kind? If so, that makes all the sense in the world.
Between people who have lost jobs to people who need to pick up additional duties at their jobs to cover positions that were emptied by downsizing, your marketplace is one of the few that’s growing right now.
Good post.I think it’s good to have a web business at any time to have good profits.
Good to hear that you got succeeded in conducting a very productive meeting with all.Thanks for those people who made it successful..
It’s good to listen the difference between adsence and affiliate. No doubt you are successful marketer.
@Scott – sorry about that, good to know we are on the same page then. :)
I think its better to have the business with huge investments for the beginners otherwise they could opt for a pay check loan when need of money urgent..