Why no ads?

This is an explanation of why Growstuff isn't going to be ad-supported (or at least not in the mainstream way, eg. by showing ads from Google etc.)

First up, the all-round best article on this subject is Why Monetizing Social Media Through Advertising is Doomed to Failure by Denise Paolucci, the founder of Dreamwidth, a project and community closely associated with Growstuff. It's well worth reading, as it explains a lot about the advertising business. However, it's very long, so here is our own shorter version, in the form of a Q&A covering many of the frequently asked questions about ad-supported revenue models.

Why don't we just put ads on the site to support it?
First and foremost, it would degrade the quality of the site for members. Not only visually -- does anyone really like having ads all over the page? -- but in terms of being distracted from the main purpose, which is to track your garden, connect with other gardeners, etc.

From Denise's "Monetization" essay, she talks about what social media sites are for, and the mismatch between that purpose and the purpose of advertising:

"Social media sites, though, aren't places that consumers go to find out information about products and services. They're places that people go to, to create things, interact with friends, chill out, etc. Social media sites have the lowest click-through rates of any category of site on the Internet -- because people who are using social media aren't there to buy, and don't want to get distracted from what they're really doing."

(And before you say that people are trying to find out about products and services on Growstuff -- for the most part, they're trying to find out about things which are not productised. They'll be looking for general information about "lucerne" or "apples", not "Bob's A1 Baled Lucerne" or "McGillicuddy's Heirloom Grafted Apple Stock".)

So not only would ads be distracting and unpleasant, but social media's "lowest click-through rates" means we're not likely to get high quality ads in the first place. (You might be thinking we'd have ads from your local permaculture school or organic farmers' market... but if we're using a mainstream ad service, it'll more likely be for the latest fad diet or online dating service.)

Secondly, when your income comes from advertisers, they are your real customers. As the saying goes, if your members aren't paying for the site then they are the product. This is not the sort of relationship we want to have with Growstuff's community.

When advertisers are your main customers, they dictate what happens on the site (either explicitly or implicitly). They dictate the layout of your webpages (to have the most visible ads), what features you will work on (to encourage the most page-views), and what content will be allowed (because they don't want to be associated with certain things).

To give a couple of concrete examples, consider websites that break useful information or articles over multiple pages, forcing you to click "Next" repeatedly, just so you see more ads. For a completely different angle, consider the websites -- ranging from Livejournal to TVTropes just off the top of my head -- who've been forced to remove certain content, usually just based on its name, to satisfy advertisers' moral qualms.

This may be a slightly silly example, but Livejournal was forced to shut down rape survivor communities, and TVTropes to remove criticism of rape tropes in media (eg. "Rape as backstory"), to satisfy their advertisers. I would not want to be trying to grow canola (aka rape or rapeseed) when the advertisers get twitchy. They could, for example, demand that we remove the word "rape", making the site less accessible to those for whom that is the local dialect word for that crop.

Now what about growers who are using techniques or growing crops that are controversial or illegal in certain jurisdictions? (And no, that's not just marijuana. It can include just about anything, depending on your locality -- all kinds of herbal remedies, for example, or practices such as "guerilla gardening", or keeping chickens in some areas.) This is something we are going to have to address, certainly, but if we're dealing with advertisers they will probably force us to take a more conservative stance than we would otherwise wish to. Growstuff is an international community, and we want to be able to support people in all sorts of growing cultures, not just those that conform to the usually US-based corporate standards of the big advertising networks.

Denise again:

"This is bad for the service: it puts them in a place of having to balance screening content for appropriateness vs. not losing advertisers, makes them have to justify the content on their service to their advertisers, and makes their userbase distrust their motives every time they have to place any restriction on content at all. This is bad for the users: it means that they lose the ability to produce certain content, and makes them consciously aware of the fact that the social media service views them as a cash cow. This is bad for the advertisers: it means that they are advertising somewhere where, at any second, their ad can appear somewhere they really don't want it to appear."

In short: ads lead to stress and contention over content, and nobody likes that.

And then, on top of all that, many of the ad networks invade user privacy, which we're really not keen on. Privacy invasion -- in the form of tracking you from site to site, and aggregating information about your behaviour -- is one of the core practices of the big ad networks, because it's how they "target" ads at you. When people talk about "highly targetted ads" in the same sentence as major ad networks, they're talking about advertisers tracking your every move on the Internet.

Denise describes the problem:

"This is why a lot of sites use third-party ad networks: because those ad networks function on multiple sites, and therefore can build up more information about you (based on what ads you've seen on those other sites, what ads you've clicked on, and your personal browsing history). The ads you see on one internet forum might be served by the same people who serve the ads on another, so when you visit HotBustyBabes and then go visit RecipesRUs, you might get an ad that you'd be ashamed to show your mother: the ad network knows you like both naked women and cooking, and so while you're looking for something about cooking, they'll show you an ad about naked women."

This makes us pretty uncomfortable about using any of the major ad networks; in fact, it's at odds with Growstuff's policies on Privacy.

But couldn't we do our own ad targeting?
That is to say, we know our own members and where they are and what they're interested in. We could build something that, for instance, only showed ads for tropical fruit crops to people in the right growing zones, or targetted permaculture ads to permaculturists. We could also make sure that our advertisers agreed with our values/principles, and didn't try to restrict content or invade privacy.

One site which does very good targetted, specialised ads is Ravelry, and we'll draw on examples from their experience in this section.

To do this kind of targetted advertising, we would essentially have to build our own ad system. We would also have to find advertisers willing to advertise on our site: most likely small advertisers, ideally from our own community.

There are two problems here. The first is that building our own ad system would take considerable time and effort, which would be taken away from building features for our members. To give an idea of the scope, it would be at least as much work as the entire crops database, and possibly more. It would encompass a complex payment system, upload and management of ad collateral, a system for advertisers to buy ad slots, a targeting system that knew how to group members appropriately, tracking click-throughs, ability to flag inappropriate ads and review ads for appropriateness, and more. It's far from simple, and would take many people many months of work, during which they would not be working on anything to do with food gardening.

Denise again:

The focus of the service's development begins to shift, until more and more resources start getting thrown at trying to capture passive revenue. Once a service hits that point, the money coming in from the active revenue stream begins to be put into resources for improving the passive revenue stream, instead of into resources for improving the service.

In short, over time, the service stops putting their effort into satisfying the user, and starts putting effort into monetizing the user -- even those users who are already contributing to the active revenue stream.

Secondly, finding advertisers. On Ravelry they come from among the Rav community, but Ravelry has an enormous benefit over us here: most vendors sell small, lightweight, easily-transported goods (such as knitting yarn, tools, or patterns) or electronic goods (patterns, again). Many of them also sell through Etsy stores, meaning that they don't need to set up their own online shopfront. Finally, the things people are selling are not extremely localised: a knitting pattern can be useful to anyone in the world, and yarn can be shipped almost anywhere.

This is not true for food gardeners. Think about the things we buy: plants and produce are hard to ship, seeds can be difficult to transport over international boundaries, gardening tools and supplies are very bulky and best sourced from a local provider, and so on. The physical aspects of growing stuff are simply harder to sell online than the physical aspects of knitting. As for electronic goods, there would be a small market for instructional materials, videos, etc, but nothing like as large as the demand for patterns. Finally, there is no good existing marketplace -- akin to Etsy -- for small sellers in our community to use as a shopfront, so ads would effectively be limited to those businesses who already have an online store.

So to summarize -- we'd be putting in months and months of work, for a very small set of potential advertisers, most of whom would be advertising to very small markets (because of shipping restrictions etc). Not worth it.

How about finding offline businesses who want to advertise to Growstuff members in their local area?
We're talking, here, about your local plant nursery, equipment supplier, or tradesperson.

To do this, we'd need everything described in the previous section (so, already very difficult). Then on top of this, to reach these businesses would require a worldwide advertising sales force to go out and find businesses who would want to advertise with us, and would be really hard, intensive, expensive work. These offline businesses probably aren't familiar with online advertising, so they would need to be sold on the idea first, and then taught how to create an online campaign and effective ads. This is a very expensive venture and almost certainly beyond our means.

To give one example of this: around 2007, I worked for the website http://realestate.com.au/, a search engine for properties for sale and rent. The revenue came from real estate agents who posted their listings to the site. Real estate agents, as you may know, are not the most tech-forward industry. The company I worked for had about 400 staff in total. About half of these were involved in selling to the real estate agents and other advertisers (200 people total). The number of people who developed the website? A team of 20. That is, the site needed 10 times as many ad sales people as developers to keep running, using this model.

Haven't we already said we'll support trade/sharing between our members? Can't advertising be part of that?
Yes, and that's where we get so far away from the mainstream "banner ad" or "google ad" model that we're talking about something else entirely. If we are enabling trade and sharing between our members, then our advertisers are our members, and there is no longer a mismatch between advertisers' goals and community values. This is great!

Permitting paid "ad upgrades" in our trading system -- for instance to attach a photo, feature the ad more prominently, or target it more specifically -- is a good example of how advertising might fit in with the Growstuff community. But it's a long way from "monetizing through putting ads on the site" that was first posited at the top of this page.

How about other kinds of advertising, like sponsorships or co-branded content?
This has a lot of the same problems with respect to values mismatches between advertiser and community, and working for the advertiser rather than for the members. As an example, consider a situation where we're trying to find sponsors for crop pages. Now let's say Monsanto wanted to sponsor our "Corn" page. Or in a milder example, say that a local seed company wanted to sponsor our Heirloom Tomatoes pages. What if there were a bunch of posts saying, "My seeds from $company didn't come up so well" or recommending other suppliers? Would we, implicitly or explicitly, try to hide or censor those posts? If not, how would we placate the seed company and make sure they wanted to keep sponsoring us?

That said, sponsorships might work if we did it carefully. But how to ensure we do it carefully enough? It's a slippery slope, and uncomfortable to try and balance at the top of it.

Well, I'm not going to pay for a membership -- I prefer ad-supported sites!
There will always be some people who have this opinion. That is fine! You can have a free account and continue to use the site as if it were covered in ads. You'll get approximately the same functionality you would have in an advertising supported site -- the work that's gone into advanced features for paid users would have previously gone into the ad system, so you're not missing out on anything. As long as a certain proportion of members feel that an ad-free site with added features is worth their money, and can support the site financially, we'll be just fine.

To sum up
I'll end by quoting Denise again, from the wrap-up to her essay (which, if you haven't got the point yet, you should definitely read!)

Is it possible for a social media site to implement advertising in a way that doesn't drive away its core participants?

Behavioral economics indicate that advertising is only likely to work on a social media site if the site manages to deliver an advertising model where:


 * advertising is unobtrusive, gentle, and respectful;
 * people feel like the advertising is relevant to them;
 * people feel like they get value from the advertising;
 * people feel like the service owners make choices for them first, not advertisers first;
 * people do not feel like they are being exploited, monetized, turned into commodities, or in any way, shape, or form being used primarily to generate revenue for the company without receiving fair market value.

And if a site fails on elements 1-4 of this list, the users will feel uncomfortable, and will generally either ignore the situation or express their discontent politely (if firmly). When a site fails on #5, though, someone had better get an umbrella, because the poo-flinging is about to start.

The minute a site makes its users feel like they aren't the primary focus or concern, the minute a social media site calls attention to the fact that the site is capitalizing on its users' creative effort, each individual user is going to consciously examine the transactional benefit they're obtaining in exchange for providing that content.

Advertising is hard, which means it is expensive, and if you get it wrong you'll wind up with a site that's in a downward spiral of fad-diet-and-hot-girls-in-your-area-encrusted doom.

Let's not go there. Growstuff's policy is that it will not have advertising other than community-based, member-to-member ads. Instead, we will make sure that our revenue comes from our members and is used to build the things that make them happy and, hopefully, generate more revenue.

Other interesting reading

 * Don't be a free user by Maciej Ceglowski at Pinboard