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Business models

The advertising business model

The advertising business model: people use the product for free, and companies pay to reach them. Revenue comes from selling attention, by views or clicks.

Updated · 2 min read

How it makes money

Revenue comes from selling attention, by views or clicks. It takes a large audience before it pays much, so most companies in this model focus on growth first and on income later.

Real examples

The numbers to watch

Who it fits

Media, social and free tools where people come back a lot.

What goes wrong

You need a huge audience, and an update in someone else's algorithm can take it away.

Try it this week

Work out how many views a month you need to earn your target. It is often more than people think.

Then give it a time: one block of 90 minutes this week, in your calendar. Our playbooks have the next steps for finding your first customers.

Questions

What is an example of the advertising model?

Google earns most of its revenue from ads next to search results.

What is the biggest risk with the advertising model?

You need a huge audience, and an update in someone else's algorithm can take it away..

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