How to balance your online advertising and your offline conscience

Google in 1998, showing the original logo
Image via Wikipedia

I recently found an interesting example of  a website that both makes a lot of money and yet is much more efficient than any free or non profit. It is called ECOSIA

If you see a website that wants to balance administrative costs  plus have a transparent way to make the world better- this is a great example.

  • http://ecosia.org/how.php
  • HOW IT WORKS
    You search with Ecosia.
  • Perhaps you click on an interesting sponsored link.
  • The sponsoring company pays Bing or Yahoo for the click.
  • Bing or Yahoo gives the bigger chunk of that money to Ecosia.
  • Ecosia donates at least 80% of this income to support WWF’s work in the Amazon.
  • If you like what we’re doing, help us spread the word!
  • Key facts about the park:

    • World’s largest tropical forest reserve (38,867 square kilometers, or about the size of Switzerland)
    • Home to about 14% of all amphibian species and roughly 54% of all bird species in the Amazon – not to mention large populations of at least eight threatened species, including the jaguar
    • Includes part of the Guiana Shield containing 25% of world’s remaining tropical rainforests – 80 to 90% of which are still pristine
    • Holds the last major unpolluted water reserves in the Neotropics, containing approximately 20% of all of the Earth’s water
    • One of the last tropical regions on Earth vastly unaltered by humans
    • Significant contributor to climatic regulation via heat absorption and carbon storage

     

    http://ecosia.org/statistics.php

    They claim to have donated 141,529.42 EUR !!!

    http://static.ecosia.org/files/donations.pdf

     

     

     

     

     

     

     

     

     

     

    Well suppose you are the Web Admin of a very popular website like Wikipedia or etc

    One way to meet server costs is to say openly hey i need to balance my costs so i need some money.

    The other way is to use online advertising.

    I started mine with Google Adsense.

    Click per milli (or CPM)  gives you a very low low conversion compared to contacting ad sponsor directly.

    But its a great data experiment-

    as you can monitor which companies are likely to be advertised on your site (assume google knows more about their algols than you will)

    which formats -banner or text or flash have what kind of conversion rates

    what are the expected pay off rates from various keywords or companies (like business intelligence software, predictive analytics software and statistical computing software are similar but have different expected returns (if you remember your eco class)

     

    NOW- Based on above data, you know whats your minimum baseline to expect from a private advertiser than a public, crowd sourced search engine one (like Google or Bing)

    Lets say if you have 100000 views monthly. and assume one out of 1000 page views will lead to a click. Say the advertiser will pay you 1 $ for every 1 click (=1000 impressions)

    Then your expected revenue is $100.But if your clicks are priced at 2.5$ for every click , and your click through rate is now 3 out of 1000 impressions- (both very moderate increases that can done by basic placement optimization of ad type, graphics etc)-your new revenue is  750$.

    Be a good Samaritan- you decide to share some of this with your audience -like 4 Amazon books per month ( or I free Amazon book per week)- That gives you a cost of 200$, and leaves you with some 550$.

    Wait! it doesnt end there- Adam Smith‘s invisible hand moves on .

    You say hmm let me put 100 $ for an annual paper writing contest of $1000, donate $200 to one laptop per child ( or to Amazon rain forests or to Haiti etc etc etc), pay $100 to your upgraded server hosting, and put 350$ in online advertising. say $200 for search engines and $150 for Facebook.

    Woah!

    Month 1 would should see more people  visiting you for the first time. If you have a good return rate (returning visitors as a %, and low bounce rate (visits less than 5 secs)- your traffic should see atleast a 20% jump in new arrivals and 5-10 % in long term arrivals. Ignoring bounces- within  three months you will have one of the following

    1) An interesting case study on statistics on online and social media advertising, tangible motivations for increasing community response , and some good data for study

    2) hopefully better cost management of your server expenses

    3)very hopefully a positive cash flow

     

    you could even set a percentage and share the monthly (or annually is better actions) to your readers and advertisers.

    go ahead- change the world!

    the key paradigms here are sharing your traffic and revenue openly to everyone

    donating to a suitable cause

    helping increase awareness of the suitable cause

    basing fixed percentages rather than absolute numbers to ensure your site and cause are sustained for years.

    Red Hat worth 7.8 Billion now

    I was searching for a Linux install of Revolution’s latest enterprise version, but it seems version 4 will be available on Red Hat Enterprise Linux only by Decemebr 2010. Also even though Revolution once opted for co branding with Canonical’s Karmic Koala, they seem to have ignored Ubuntu from the Enterprise version of Revolution R.

    http://www.revolutionanalytics.com/why-revolution-r/which-r-is-right-for-me.php

    Base R Revolution R Community Revolution R Enterprise
    Buy Now
    Target Use Open Source Product Evaluation & Simple Prototyping Business, Research & Academics
    Software
    100% Compatible with R language X X X
    Certified for Stability X X
    Command-Line Programming X X X
    Getting Started Guide X X
    Performance & Scalability
    Analyze larger data sets with 64-bit RAM X X
    Optimized for Multi-processor workstations X X
    Multi-threaded Math libraries X X
    Parallel Programming (Single Workstation) X X
    Out-of-the-Box Cluster-Ready X
    “Big Data” Analysis
    Terabyte-Class File Structures X
    Specialized “Big Data” Algorithms X
    Integrated Web Services
    Scalable Web Services Platform X*
    User Interface
    Visual IDE X
    Comprehensive Data Analysis GUI X*
    Technical Support
    Discussion Forums X X X
    Online Support Mailing List Forum X
    Email Support X
    Phone Support X
    Support for Base & Recommended R Packages X X X
    Authorized Training & Consulting X
    Platforms
    Single User X X X
    Multi-User Server X X
    32-bit Windows X X X
    64-bit Windows X X
    Mac OS X X X
    Ubuntu Linux X X
    Red Hat Enterprise Linux X
    Cloud-Ready X

    and though the page on RED HAT’s Partner page for Revolution seems old/not so updated

    https://www.redhat.com/wapps/partnerlocator/web/home.html;#productId=188

    , I was still curious to see what the buzz about Red Hat is all about.

    And one of the answers is Red Hat is now a 7.8 Billion Dollar Company.

    http://www.redhat.com/about/news/prarchive/2010/Q2_2011.html

    Red Hat Reports Second Quarter Results

    • Revenue of $220 million, up 20% from the prior year
    • GAAP operating income up 24%, non-GAAP operating income up 25% from the prior year
    • Deferred revenue of $650 million, up 12% from the prior year

    RALEIGH, NC – Sept 22, 2010 – Red Hat, Inc. (NYSE: RHT), the world’s leading provider of open source solutions, today announced financial results for its fiscal year 2011 second quarter ended August 31, 2010.

    Total revenue for the quarter was $219.8 million, an increase of 20% from the year ago quarter. Subscription revenue for the quarter was $186.2 million, up 19% year-over-year.

    and the stock goes zoom 48 % up for the year

    http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1285505944359&chddm=98141&chls=IntervalBasedLine&cmpto=INDEXDJX:.DJI;NASDAQ:ORCL;NASDAQ:MSFT;NYSE:IBM&cmptdms=0;0;0;0&q=NYSE:RHT&ntsp=0

    (Note to Google- please put the URL shortener on Google Finance as well)

    The software is also reasonably priced starting from 80$ onwards.

    https://www.redhat.com/apps/store/desktop/

    Basic Subscription

    Web support, 2 business day response, unlimited incidents
    1 Year
    $80
    Multi-OS with Basic SubscriptionWeb support, 2 business day response, unlimited incidents
    1 Year
    $120
    Workstation with Basic Subscription
    Web support, 2 business day response, unlimited incidents
    1 Year
    $179
    Workstation and Multi-OS with Basic Subscription
    Web support, 2 business day response, unlimited incidents
    1 Year
    $219
    Workstation with Standard Subscription
    Business Hours phone support, web support, unlimited incidents
    1 Year
    $299
    Workstation and Multi-OS with Standard Subscription
    Business Hours phone support, web support, unlimited incidents
    1 Year
    $339
    ——————————————————————————————
    That should be a good enough case for open source as a business model.