Entrecard: Great Concept, No Business Plan

The underlying concept of Entrecard was genius: To provide a vehicle where bloggers thoughout the world could interact and advertise Free of charge! To accomplish this, a fictitious economy was created, rewarding members for visiting other sites and advertising. In this, Entrecard's success was unparalleled. At its peak, some estimate that over 30 thousand members participated.

To be truly successful, however, it is important to capitalize on one's efforts.

Unfortunately, it appears that Entrecard failed to create a viable Business Plan which would address the methodology of earning income while providing its founding services.

As if in a panic, Entrecard resorted to selling membership ad space and delivering it to the captive membership. This resulted in alienaiting members and losing its base.

Under new Entrecard ownership, the paid ads were eliminated, and membership began to grow again. But, not having a Business Plan, Entrecard is reinstituting their Paid Ad delivery system. It was initially planned to be implemented beginning September 28th 2009, but, this date is now pushed back to the week of October 5th.

The new system will occupy 15% of the network inventory. If, however, a member wishes to opt out, he can pay $50 per year to be ad free.

Reading the comments in their blog, members have mixed opinions about this whole thing. And we did too.

So, we decided to analyze what this means:

1. Entrecard allows members to receive credits for dropping on 300 sites maximum.
2. Assuming that a member meets this maximum 300 days of the year, there will be 90,000 ad impressions that one visits.
3. Multiplying 90K times 15%, the user will be exposed to 13,500 ad impressions.
4. Since one can opt out for of the 13,500 impressions for $50, we calculate that Entrecard expects ad impressions to cost $3.7037 per 1000 impressions.
5. We think this is a lot of money!

Another way of looking at this is by membership:

1. If 1,000 members agree to pay $50, Entrecard receives $50,000
2. If 10,000 members agree to pay $50, Entrecard receives $500,000

Wow, Entrecard can get a lot of money from a captive audience!

So what do we think? Entrecard will continue to be the sought after delivery vehicle for New Bloggers who are trying to build an audience and learn the ropes.

However, seasoned members will go elsewhere for their primary audience. Why?

1. As time goes by, followers are developed.
2. Bloggers begin to willingly purchase Paid Ads on other networks.
3. As they grow, they will devote more time to their content, and less to dropping.
4. Most blogs derive income from displaying ads.

 Since a blog's ad space is valuable, why  would one display Entrecard for free?

And, if one already purchases their own ads, why would they want to display Entrecard's for free?

Based on this simple economic evaluation, we believe that Entrecard does not have a Business Plan of their own. At present, they are simply attempting to piggy-back on others. This type of strategy will not succeed since it is simply parasitic.

While we will not be dropping Entrecard from our arsonal, we will be demoting their widgets to less important portions of our blogs. Many others may just drop them flat out. This means that the expected revenue that Entrecard is hoping to get will not be there, because advertisers will not want to  pay top dollar for poor quality ad space!


JL...............