## Friday, October 9, 2009

### Adgitize: One Step Forward / Two Steps Back

In the Website/Blog management process, it seems that every time you think things are rosy and your environment is stable, an unpredictable obstacle blocks your way. Instead of being able to devote your time to enhancing your site and its content, you must stop, regroup, determine a course of action, and often start over. It always seems that we're taking:

One Step Forward, and
Two Steps Backward.

In a rather stunning blog post yesterday morning, Adgitize announced that it would be increasing monthly advertising rates from $14 to$24 a month beginning November 1st 2009.

This is a 71.43% increase in rates and is rather substantial for a service that is only 1 year old. Adgitize understands the magnitude of this increase and expects a number of publishers to be irate, complain, or leave. However, since they anticipate membership and ad publishing to quadruple next year, they need more money to handle this increased demand.

Like everyone else, we have embraced Adgitize as a low-cost Entrecard and advertizing solution to increasing readership. While we cannot critize Adgitize's action, it is necessary for us to re-evaluate the pros and cons of: staying or leaving this great company; and, paying the increased advertising prices.

On Leaving or Staying
• The Pros: The only satisfaction of leaving is that we have made a statement. Other than that, nothing is gained.
• The Cons: Should we leave, we would lose potential income and readership. During the past year, we have made many friends. Several have commented on our posts implying that folks are indeed reading our content and finding it interesting. In leaving, we would let these people down.
Conclusion: Leaving Adgitize accomplishes nothing. In the end, we would only be hurting ourselves. Thus, we will stay.

Our advertising situation is slightly different than most. For the past 2 months, we have been purchasing two ad spots which cost us $28 per month. Since rates haven't increased this month of October, we have renewed both which will expire in November. But, next month we need to decide whether to buy 2, 1, or no ads. Our Adgitize Habits We try to publish a new post every day and visit the maximum number of sites. Since points are awarded for Writing Articles and Clicking, we can pretty much count on receiving 200 points per day. This is appears to be the minimum number of points needed for earning$0.15 per day, and $0.24 after rates are increased. Because we are advertisers, we receive 160 extra points for advertising (because we have 2 ad spots) and are on the Preferred Publishers List. Additionally, we have earned additional points for both Ad and Page views which we attribute to advertising. The sum of these points contributes another 100-120 points per day. In total, our daily points are around 460-470, which means that we earn approximately$0.63 daily. Translating this to the new payment schedule, we would receive $1.03 each day. Should We Continue to Buy 2 Ads? Purchasing 2 ads has only increased our total site visits by a little and our income has underperformed that of a single ad. Last month, we were about 8th on the Leaderboard but our income was slightly less than$20. We have not recruited any advertising members, so we don't receive any other affiliate income. Since ads run for 31 days, we are paying $0.9032 per day and receiving only$0.63/day. This is a daily loss of $0.2732 or$8.47 per month. When the new payment schedule becomes effective, two ads would cost $47/month which equals$1.5161 per day. For this, we would receive $1.03 per day, meaning we lose$0.4861/day or $15.07 monthly. Our conclusion is that the loss of$15 monthly ($180/year) is not worth the benefit we receive in additional page view traffic or ad views. Therefore, we will not purchase 2 ads in the future. Should We Buy One Ad? If we buy only 1 ad at the higher rates, our daily expense will be$0.7742. We will lose 50 points for the 2nd ad and a few page views. This will bring our total points to 370-400/day but we will still be a Preferred Publisher. In return, we will receive $0.86 per day, meaning that we will earn a profit of$0.0858 or $2.66 for the month. But Will Everyone Continue to Advertise at the New Rate? All of our calculations are based on the assumption that the number of advertisers remain the same as today. But since rates are increasing by over 71%, we believe that many Advertisers will drop out. Several factors reinforce this assumption: • Many Advertisers are located in the Asia/Pacific region, • Much of the world economies are suffering, • Money is tight, • Unemployment is high, • Taxes are being raised across the board, and • The Holidays are coming. Because of these, we believe that probably 50% will not renew their ads at the higher rates in November. Last night, there were 203 advertisers. If half drop out, the estimated payouts that Adgitize states will then be cut to existing levels or lower. This means that those who are earning payouts of$14/month now will continue to be making only $14 in the future. That would translate into a$10/month loss. If this happens, more people will drop out and revenue will decline further.

So What Will We Do?
Based on the uncertainty of breaking even, we have concluded that our best option is to:

In doing this, we will drop down into the 2nd lowest tier of payouts. If we continue to Click and Write Articles, we will receive 200 points, which currently qualifies for payouts of $0.15/day or$4.65 per month. If advertising levels remain the same, then we could expect to receive $0.24/day or$7.44/month. Either way, Not Advertising is a NO RISK solution to earning a small bit of money.

How Will We Replace the Lost Traffic?
In one word: Entrecard! Although we have critized Entrecard for forcing members to display paid ads, their advertising network remains free of charge. By ramping up our EC Advertising campaigns and clicking on member banners, we will replace the 50-100 visits that we lose from Adgitize. This means that we, as Adgitize members, will continue to be awarded points for both Ad and Page views. With this replacement traffic, our Adgitize points may increase by another hundred, bringing our total points to 300/day and qualifying us for much higher payouts.

So What Should Have Adgitize Done?
To raise income flows, we believe that Adgitize should have CUT the monthly advertising fee from $14 to$10 per month. In doing this, members would be earning less, but Adgitize would be earning more. Why? Because we believe more people would find this attractive. New members would embrace the lower cost basis, and immediately begin to advertise. Existing members would also consider purchasing 2nd ads for their sites. So, all around, we believe this would have been the best alternative. (But, this is only our opinion).

Conclusion
To summarize, our course of action beginning November 2009 will be that of a "Wait and See". We will:
• Remain Calm and NOT become Mad,
• Ramp Up Our Entrecard Campaigns,
• Hope that All of You Continue to Follow Us,
• Wait and See what Other Advertisers Do, and
• Reconsider Our Decision in January or February 2010.
If you also worry about what to do regarding Adgitize advertising, or if you have a supporting or disagreeing opinion, feel free to write a comment and let us and Adgtize know. If you write a Post on your own, let us know what it is. And remember, we're all in this together and want Adgitize to succeed. As I said in the beginning, it's:

One Step Forward
Two Steps Backward.

1. Hmm,

you made an interesting post, got curious for it after i read the tweet about it just now.

But i guess i can't agree completely with you.;)

When a company grows, you have to get more persons who work for that company and this will cost you more money.
With a lower ad price, you might get more members to advertise but this will happen with a rapid increasing volume.

Do you want that we have too many server issues like EntreCard had it in the last months or Adgitize in May before they changed to a better server?

A higher volume of new advertisers means, more blogs have to be approved, more questions answered and so on. The lower ad price would never be enough to cover the cost for two or three new worker when Adgitize would grow that fast.

EntreCard:
It's ok when you want to increase your traffic with it. Therefore you have to spend for each of your blogs additional 1 hour to achieve 100 other members to drop back daily on your blog.

And with the dilemma of the sponsored ads, some members are no more that active and stopped or cut back dropping daily. As soon as we will see the real sponsored ads it could even get worse and more members will move on (to Adgitize, CMF Ads, Project Wonderful or other ad networks/traffic exchanges).

The increase of Entrecard's Opt-out program for the monthly fee to 5$is too much (like i wrote in one of my previous blog posts on the Money-Blog 1 or 2$/month is acceptable), their closing of blog commenting and the forum is not a behaviour which is acceptable for many members.

Nevertheless i still use EntreCard to drive a lot of traffic to my four blogs and to increase my Adgitize earnings. It's the best solution for this.

The Preferred Publisher Program will give you more traffic in the future. At the moment you can get from it up to 25 free visitors/day when i look into my statistics for the last 30 days.

2. sorry, had to split the comment as blogger only allowed 4.096 characters per comment *lol* didn't know this...

next part:

If more members join this program and choose the FREE(!) option, Advertisers will see an increase in clicks as these Preferred publishers have to reach -in three out of each four days- 100 click points.
I guess more members will join this Preferred Publisher program in the next weeks and increase the value for advertisers.

And what will happen when the number of advertisers decrease in November?
Your ads will be shown again more often which will result again in more clicks for your ad, when i think back to the time as we had around 100 - 120 advertisers in May/June, i got always around 90-120 clicks.
At the moment it's between 70-90 clicks the last few days (after a low in September of mostly less than 75 clicks).

"Because of these, we believe that probably 50% will not renew their ads at the higher rates in November. Last night, there were 203 advertisers. If half drop out, the estimated payouts that Adgitize states will then be cut to existing levels or lower. This means that those who are earning payouts of $14/month now will continue to be making only$14 in the future. That would translate into a $10/month loss." Why? If we have 100 members less who advertise these members don't get advertiser points (10000 points less + several thousand points less in Page/ad view points). So the overall points will drop, too and the members who advertise will get a better share of earnings than the member who don't advertise because of the increased clicks/points they will get for their ads. The members who don't advertise have to click on 50 more ads daily -> 100 x 50 = 5.000 more page/ad views for all advertisers New members will become attracted as they can earn now easily more than 24 cents with just 200 points (clicking/article writing) + by joining the preferred publisher program, getting FREE traffic of up to 25 visitors/daily. After two months you could cash out already 15$... instead of just 10 - 12 $. This will all benefit advertisers :) What do you think? 3. Hey cornyman Thanks for your thoughtful and thorough response. I have to think about what you said. You may be right. That's the reason I stated my viewpoint, but I'm not sure. Also, thanks for mentioning the Tweet. I really didn't think anyone cared about them. I'll get back, w/ a tweet and comments. Your friend, JL......... 4. Excellent analysis. And I can assure you these are the exact same thoughts that were discussed before we made the price increase. Cornyman hit it right on the head. If you are an "active" publisher, writing articles, clicking ads and an advertiser, then you will be making enough to cover one ad on Adgitize. It is amazing how large our organization is and how few are over 300 points each day. If there are less advertisers especially if they are active publishers then total points will drop and revenues for those over 300 points will continue to be high. If you go back to May or June when we had one third of the advertisers we have today, you will see that your earnings stay pretty constant. (Assuming you were over 300 points during that time frame.) Now imagine that you advertise in November, you will receive more traffic than if you don't and you will make enough to cover an ad and earn a little extra. Sounds like that one step might take you a little further than you thought it would. 5. I have been very happy with my results with Adgitize in the first few months I have been with them. I currently run one ad, and usually hit 380-400 points per day and earn enough to pay for the ad with a buck or two extra. I intend to continue with that as long as it is working rather than stop and see what happens 6. Hi you gave a valueable comment. I am not a risk taker. I only advertised 3 days ago. Reading your post this early made me think whether to advertise again come November 2009. Though I had read that some bloggerss are thinking of dropping Entrecard, I will still continue to have it on my blog. It had become helpful for me specially I am just new to blogging. 7. Thank you for sharing your insights on the rising costs of ads in adgitize. 8. I just read the comments, what a vibrant discussion! 9. I think this has been a great discussion. I tend to agree with cornyman and Ken that if you are a serious blogger, then Adgitize will continue to be a wise choice. For me, I think of that in terms of writing a good blog post a day, having reasonable traffic (which generally comes from writing a good blog post a day), and reading similar blogs. I've written more about this blog post as well as how it fits into the larger issue of online advertisingng at Adgitizing's Price Increase. Stop by and share your comments. 10. Well I have been with Adgitize for about three months or so. I've never advertised but only use it as a publisher. I have been paid as well. I make a few cents a day but that's fine with me. I like visiting all the blogs associated with Adgitize. 11. I will be ditching Adgitize after this month and the reason is because I am visiting 100 blogs a day and honestly reading the articles and leaving relevant comments however when I looked at my stats it shows people coming from Adgitize are on my site only long enough to click through to another site. Out of the 1,234 blogs I've visited and commented thus far this month in return I've gotten exactly 10 comments back. With that and the piddly change I'm getting paid to visit these blogs is hardly worth it. 12. @Jordasche Bledsoe you could do what many are doing and put Videos in the Sidebar to increase the time spent on your page.But I agree with you most of this is just junk traffic and they don't look around I have seen Improvements in Time on site from Entrecard because they Have categories but still no Comments.I am not using Adgitize to make Money and I will Write a blog post when I want to$14 is about €9 which would buy me a pack of Cigarettes so I feel it's cheap enough but $24 is too much money to many Bloggers when you consider they also have to pay hosting Costs and it will be harder to Gain referrals 13. Great post bro. I just think that adgi rise the price because people start leaving EC. 14. nice conversation here. the "wait and see" attitude will be felt by December. the equation is easy. an Advertiser who is doing his work religiously will simply compare his earnings on December against the previous months, from here the decision either to buy another Ad for the next months will be done. 15. I saw this coming as soon as Adgetize began to grow. SO many Entrecard members thought going over to Adgetized would be better. I am notsaying it is or it is not as I am members of just about everything...but I laso knew well in advance that as soon as Adgetized became a demanded market ...they would up their price. Although I have to say that$10.00 is a bit cocky!