What are the pros and cons of an advertising revenue model for your product, and the internet overall?
Our product, Memento, automatically ships personalized scrapbooks on a subscription basis. When considering an advertising revenue model instead of a subscription, the ad model could lower costs to increase access to our product. Akin to streaming services like Hulu and now Netflix, having an ad-based tier reduces direct costs for the consumer. If we incorporate ads into our scrapbooks, more people may be willing to purchase the books simply because they are more affordable. Moreover, if we decided to analyze the selected photos to inform the ads we place in the book, they may provide better targeting (though this would go against our value of privacy and the fact that “targeting to demographics, psychographics or stated interests (as Facebook does) works marginally better than not targeting at all”).
The biggest con to having an ad model is the detraction from the photo-viewing experience. Our scrapbooks are intended to help people remember memories, which are often personal and evoke emotions. We would not want ads to distract users from that core goal. The ads could also become irrelevant quickly relative to how long someone may keep a scrapbook.
In regards to the internet, an advertising model allows more people to use certain products that they otherwise could not afford such as with the Malaysian opposition group. This low barrier of entry is appealing to many companies, especially during times focused on hypergrowth (i.e. pre-2022). Additionally, advertising can actually be helpful for users if proper content is displayed.
However, the prevalence of advertising has eroded consumer expectations for online privacy to nil. If we have an expectation outside of the internet to maintain a sense of privacy, why should we not expect the same of our digital lives? Advertising also limits the creativity with which startups and established companies think about generating revenue. When the default is to rely on advertising, we may become complacent and miss a better model.
