Ad supported vs Paid SaaS models
Hi,
Are there viable SaaS platforms out there that are ad-supported? Or is that more or less a relic of the days of Internet past?
I am having some discussions about what the monetisation scheme / strategy would be, and this came up as one. It then occurred to me that other than clickbait-y sites and travel blogs, I'm not aware of any SaaS type sites that are primary ad supported.
Thanks!
JP
Went with paid from the start on tubespark.ai and never considered ads. The moment you add ads to a creator tool, you're competing with your own users for attention. My users are trying to figure out what to create next. Showing them ads while they're thinking would kill the whole experience. Someone in the comments made the point about trust, too, and I think that's right. If the tool is free with ads, what are you actually selling?
It's all about diversification. I think it's much better to have 1000 customers and charge them $5/month than search for advertisers, find 10 and charge them e.g. $500/month. In this way, your income can be predicted and there is much less risk for fluctuation.
Yeah, I don't know of any SaaS that would not have a revenue model where the customers are charged. I would immediately see it as not trustworthy if ads are the means of monetization, as that would incentivize making the product more advertiser-friendly than user-friendly.
From a business owner perspective, I would also not use that monetization strategy with the prevalence of adblocking. It's very risky to bet your income on a technology that is more and more under attack by privacy legislation. I think this is very much a relic of the old days.
Yeah that makes sense. It's analogous to the smartphone/search ecosystem isn't it, where there's an outcry over the users/info being the product that is sold to the advertisers.
And if you upload any data to a SaaS that is ad-driven, you can be fairly sure your data is thoroughly inspected and maybe even shared with advertisers. You AND your data are the product.
I think SaaS generally means that there's monthly recurring revenue, however, this interview might be insightful: https://www.humanproofdesigns.com/podcast59/
It's from the founder of WhatIsMyIPAddress.com and how he grew that business off of ads and affiliate income.
The number of users needed for a successful SaaS is much lower than for a successful ad based site, assuming the service is worth paying for. It also feels good to build something useful!
I will let you know how it feels when I've built something useful ;)
I would argue that Google is a Saas, but amongst huge companies they are the exception.
Yes, I can think about a lot of profitable Saas that make money through ads. Pixlr, pinetools, all the file compressor or converters just to name a few.
Yup point taken! As Arvid says in another post, it does change the dynamics quite a bit, and that identity should be a consideration to me for sure. Thanks :)