Reasons users go online
July 15th, 2005I’ve been thinking a bit lately about the reasons people go online and I think I’ve narrowed it down to 5 basic objectives. Once a webmaster has determined the reason his/her users are going online, he/she can determine the best way to generate revenues from the site. Here are the reasons in no particular order:
- To find information/research
- To buy something
- For entertainment
- To interact with others
- To manage data/processes
So maybe all this isn’t that interesting; perhaps you’ve seen this somewhere online before (personally I couldn’t find a list like this online, but I’m certainly no google guru) but here’s where this information becomes profitable: Based on the reasons users are visiting your site, you can choose the best “business model” to maximize your site’s revenue potential.
Users seeking information can be doing so for a number of reasons. They could be performing research for school or for work, looking for things to do in a new town, or comparing products for an upcoming purchase. My own website falls into this category and I can tell you firsthand that it can be frustrating attempting to make money from users seeking information. The problem is that these users aren’t in purchase mode (yes, it is possible but difficult to move them to purchase mode) and they really won’t be satisfied until they find the information they’re looking for.
I’ve personally tried a number of “business models” on my own site to varying degrees of success. Affiliate programs have worked marginally for me and most of my users end up buying books rather than mountain biking equipment (this makes sense, right, since they’re looking for information). Text ads like Google’s Adsense have worked better since they are tightly targeted and many of the ads point to other information-rich websites (or perhaps users don’t find the information they’re looking for at my site and choose to click a link that looks more fruitful). My latest foray is in subscription services/digital downloads and I’m cautiously optimistic that this model will work the best. Just look to sites like CNN with premium paid content and you’ll see that this can be a viable option for information-based sites. On the other end, though, you’ll notice sites plastered with all types of ads like Weather.com appear to be seriously frantic (or brilliant) in their attempts to convert traffic into revenue. Clearly there is no magic bullet.
Other users go online with the intent to buy. These users are some of the most valuable since they’ve already got their wallets out and they know what they need. On my own site I have a gear section where my Adsense CPM rates are double what they are on my information pages. The affiliate click-through rates are high on these pages as well as “buyers” have self-identified themselves by wandering onto the gear side. Online retailers invest big money to find buyers and many companies’ most successful affiliates are pure shopping comparison sites (more so than enthusiast sites). If you’re running a useful information-based site and can’t understand why people aren’t buying more, (hard to believe, you even tell your users to support you by buying through your amazon links!) it’s because your users aren’t buyers when they visit your site. Unfortunately, there isn’t a magic chunk of code you can drop into your site to transform information seekers into buyers. However, if you’re lucky enough to have a site full of buyers, then you should sell stuff (no?) or join an affiliate program.
Next up we have the entertainment seekers. These folks are online to play games, read humorous articles, or to watch online video. Some sites like this that come to mind are eBaum’s World and The Onion but there are a bunch of them out there. I imagine that these sites have a tough time making money since users are there to lose themselves in entertainment and aren’t really paying attention to the banner ads or product pitches around the screen. These sites also spend a lot on graphics and bandwidth and so their costs can be higher than a typical information or e-commerce site. To make money with one of these babies you need to get creative (not just in your entertainment offering but in your business as well). First off, you could have companies sponsor your games or videos. For example, Mr. Peanut could be the driver in your racecar game or you could have TV-quality commercials at the start of your videos. The other option is to sell impressions to advertisers. This is difficult to do but if your site has enough traffic of the right demographic, advertisers may be interested in renting your users’ eyeballs. Pay-per-click ads may not be as fruitful since entertainment seekers spend much of their time engrossed in your content, more so than information seekers.
Still other sites are set up so users can interact with others. Typically these are the messageboards, chat rooms, and forums but they can also be community calendars used to organize local events or matchmaking/social networking services. Users can spend hours on these sites and the coveted average page views per user can be very large. In the old days we called this “sticky” but it’s difficult to make money if your users are “stuck” on your site and are unwilling to leave to buy things or to seek information. Plus, most viewers are probably repeat users so they’re immune to your pitches unless you keep the ads fresh. These sites are a lot like a coffee shop where everyone loves to hang out but no one ever buys anything: bad for business. In this scenario the most profitable path is most likely similar to entertainment sites mentioned above: sell impressions. If your users see that MasterCard ad on your site every day for hours at a time, maybe it will eventually sink in, much like a billboard might on your daily commute. You can try all you want to implore your “loyal users” to buy through your affiliate ads or to click your links, but at the end of the day, how many of them actually will? Finding a way to leverage your community or social network to provide product recommendations (marketers’ holy grail) can be very powerful but there isn’t yet a reliable strategy for doing so. Let me know if you figure it out!
Finally, users may go online to manage data or processes. You can try affiliate links or text ads on a site like this but my impression is this just won’t work very well. Instead, consider charging for your services or perhaps selling the aggregated data you’ve collected to marketers/researchers. If your service offering is good, then users shouldn’t mind paying for the service and you shouldn’t be afraid to lose the freeloaders by charging a fee.
Of course, no site will fit neatly into one of the five categories I’ve outlined above but you should take the time to consider the reasons your users are online. Whether your site is a hobby, a second job, or a full-time business, pick the business model that best addresses your users’ online objectives and revenues will follow.
