There is a very popular misconception that the Internet — especially the Web — is free. We get that feeling because most sites are freely open to the public —
they don’t require memberships fees or subscriptions fees for you to access the sites.
Sometimes, we get that feeling because we pay to access the Web via our ISP. Some of us pay exorbitant rates to access the web. Surely that pays for the web?
Not by a long shot! Your Internet Service Provider keeps every penny of it, and uses it to pay his own bills. His bills include charges for the about of data that came into, or went out of, his network. The also include connection charges to the other ISPs and transmission lines on which the Internet traffic travels.
He may pay for content that he puts on his own “portal page,” which he would love for you to use as your “home page.”
But, he doesn’t pay a penny to the content providers —
to the sites —
that you visit.
The Internet is free. That’s true, in a sense, but not entirely!
In the real world, nothing can be free. In one way or another, every non-hobby site has to have some form of income in order to stay in business.
If a site is selling product, it has to sell its products in order to stay in business.
If a site is providing information, it shows advertising to (hopefully) stay in business.
But, just as a brick-and-mortar store (one into which you can walk and shop) will either succeed or fail based on economics, web sites also succeed or fail on economics.
As a result, we see advertising on many web sites.
Some web sites sell products. Other web sites, provide information — and rely on advertising income.
But, there is a world of difference between advertising on the Internet and advertising in the newspaper or on television or radio.
In the case of the newspaper, radio and television, advertisers pay for their ads to be published or broadcast to an expected audience. Why? Because that’s the way it’s done?
Not really. The real answer is that there is no feedback mechanism by which the publisher (the newspaper or television) can be paid based on the actual effectiveness of the ads.
In the early days of web advertising, the same thing happened. Web sites were paid based on how often an ad was viewed. Guess what? Advertisers quickly discovered that web surfers know how to ignore ads on the page. The term is “ad blindness.” The advertisers’ exorbitant payments for “viewed ads” weren’t turning into real sales —
and now, for the first time, they had a mechanism to track which ads actually were effective on which sites.
As a result, “pay per view” advertising on the web has almost disappeared except for the largest, most heavily trafficked sites —
and they don’t get paid much for “views.”
Since the Web can provide a tracking mechanism for advertising, most advertising these days is in one of two forms: pay-per-click advertising and payments based on actual sales.
A very few companies have the methodology and the economic power to provide effective pay-per-click advertising for web sites.
The most common form of advertising on the web is called “affiliate sales.”
These give the web site publisher a payment (a commission, a referral fee, an advertising fee — whatever you call it) for an actual sale, or very occasionally, for a “lead” (this might be a request for a quote or an a sign up for something).
If you click on the ad, you get sent first to an affiliate sales manager such as Commission Junction, where a cookie is set. This cookie identifies that you clicked on that particular ad, on that particular web site. Then, you are quickly sent to the ad’s destination.
The cookie’s purpose is to enable the affiliate’s web site — like mine — to make a referral fee or commission if you actually make a purchase.
Is this bad? Why should you want to allow a web site to get a commission if you buy something?
It’s back to Economics.
TANSTAFFL: Science fiction writer Robert A. Heinlein is generally acknowledged as the person who coined the term TANSTAAFL — “There ain’t no such thing as a free lunch.” The term was first used in his novel The Moon Is A Harsh Mistress.
TANSTAAFL: The web really is not free. Product sites continue to exist if they sell product. Content sites continue to exist if they get advertising revenues.