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Ask HN: How do B2C "free-tilities" like evite make money?

3 points by bakhlawa ↗ HN
I'm building a B2C utility which addresses a frequent consumer pain point, should be fun to use, but at the end of the day is just that...a fun utility but not something you would pay a monthly / one time fee to use.

I'm curious what the business model for companies like evite is. Is it just "build it and they will come...and click on ads"? Is it direct-sale of ads?

I expect the traffic and interactions on the utility to result in very targeted ads, but the idea of relying on adwords alone doesn't appeal to me very much. I could white-label the utility or underlying algorthm and sell it that way, but that's quite a departure from the current approach and would take me straight into B2B territory.

Thoughts? Advice?

2 comments

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18pfsmt
In the case of evite, yes they rely on advertising, but remember they are owned by IAC (also ASK.com) which allows them to cross-sell, and they do have their own ad sales team.

In your case, I don't think I'd follow their path. They suck, and there are other better products, but evite has momentum from '98. It would help if you'd be more specific about your utility, where you are located, and where your target market is located because these factors are major when considering monetization strategies.

bigohms
Much of their advertising is very much larger CPMs as part of agency buys across IAC's entire network. Certain "party" brands such as Bacardi target Evite on a regular basis given their obvious alignment with the audience. The direct sales team there takes them to task on the rates in comparo with a Adwords. Big G pays out only 25% of ad revenue to content partners (and that is weighted more towards their higher converting brands than lower publishers). Direct sell + high CPM works relatively well with a large network, affinity group of sites or a niche vertical master brand.

Advice (roughly 10 yrs in media/content) would be to completely own a niche or vertical with a strong brand and loyal spend-oriented audience. This can be through traditional media, aggregation, gaming or utility. Adwords will never truly support a product of this scale of effort, which is probably why its utility, benefit and opinion for publishers ranges near the bottom of the toilet. Push relationships...with your product...with your users...with your customers.