AdVolve Developing Industry Knowledge

Content

•Overview•Online Business Models

What is a business model?

• A business model is the method of doing business by which a company can sustain itself, that is, generate revenue

• The business model spells-out how a company makes money by specifying where it is positioned in the value chain

• Internet commerce has given rise to new kinds of business models

Merchant ModelSales may be made based on list prices or through auction by wholesalers or retailers. •Virtual merchant/e -retailer•Bit vendor •Catalog merchant

Brokerage Model

Brokers bring buyers and sellers together and facilitate transactions. They charge a fee or commission for transactions.

Community ModelHeavily dependent on user loyalty either for the investment of time or to aid with providing with financial investment. Thrives on contextual targeting, voluntary contributions, subscriptions for premium services, etc.

Affiliate Model

A pay for performance model, even if the affiliate fails to generate sales, it represents no cost to the merchant. It provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. •Pay-per-click -site that pays affiliates for a user click-through.•Revenue Sharing - offers a percent-of-sale commission based on a user click-through in which the user subsequently purchases a product.

Infomediary ModelWorks on providing insights and insider knowledge, for instance, data on consumption habits of consumers, to its customers to help them target marketing campaigns to the right audience.

Subscription Model

Users are charged a periodic fee to subscribe to a service.

Utility Model

Based on "pay as you go" approach. Unlike subscriber services, metered services are based on actual usage rates.

Advertising Model

Form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers.•Portal•Classifieds•Query based paid placement•Content targeted advertising •User registration

Types of Display Ads

Google AdSense

• Fast and easy way for website publishers of all sizes to display relevant Google ads on their website's content pages and earn money

• The ads are related to what your visitors are looking for on your site — or matched to the characteristics and interests of the visitors your content attracts

• Revenue is generated either on CPC or CPM basis

Difference between Google AdWords and Google AdSense

• Google AdWords is a self managed advertising medium through which you create your ads and advertise online. Whereas, Google AdSense is a way to earn revenue by displaying ads on your own website

• You pay for AdWords and you earn through AdSense

• The 2 accounts cannot be linked and need separate transactions

Summary

• Broadly eight online business models• Each one has a different way to generate

revenue• Types of Advertising models• Types of Ads• Google AdSense• Difference between Google AdWords and

Google AdSense

Helpful Links

• www.adwords.google.com

• www.google.com/adsense

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