What are the pros and cons of an advertising revenue model for your product, and the internet overall?
Our product is SwiftTech’s rugged, outdoorsy, sustainable phone with enhanced capabilities such as AI voice assistance and excellent GPS and connectivity. The pros of having an advertising revenue model would be the ability to generate short-run cashflow after the launch of the phone. However, I believe there are more cons for having this revenue model for our product. First, SwiftTech is a company with great customer loyalty. By adding advertisements to our product might cannibalize on our existing customer loyalty to a great extent. Furthermore, as this new rugged phone is a premium phone targeted to premium customers, it would be better to not incorporate the advertising revenue model for our product. Last but not least, although an advertising revenue model might provide short-run cashflow for SwiftTech, SwiftTech has enough cash to fund the development of the entire phone and the advantage of the advertising short-run model is thus insignificant.
For the internet overall, the pros and cons are indeed similar to what I mentioned above. Pros of an advertising revenue model might provide B2C products (with a website, app, etc) to generate additional revenue and utilize this additional revenue to either to scale faster, provide better product, or decrease prices for products. However, cons of this model includes its potential to decrease the quality of user experience and a recognition of data privacy concerns (especially with tailored ads now) that will affect businesses negatively.
