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Wednesday, October 11, 2006

Advertising as a Revenue Stream for Software Companies ?

Advertising could be a possible incremental additional source of revenue for ERP companies besides the traditional ones. There would be multiple revenue streams.

The B2B Advertising Market place in the US itself is in Billions of Dollars. Maybe Google (or any other company) would become the medium for advertising in any software (including ERP).

Online advertising as a variable incremental cost can be measured (perhaps much more accurately than the traditional media) against incremental Sales Revenues, making it more attractive for the advertisers.

The incremental cost of delivering software via the Net is close to zero. There is also a 'long tail' in software revenues that can be utilised more effectively by ERP vendors. Hybrid (Mix of Advertising and other Revenue Streams) Models could be perhaps an interim solution.

One of the advantages of online media over traditional ones is the availability of contextual advertising. Also, it can have multiple forms - ugly, distracting pop-ups that force user response are only one of the possible options.

Also, organizations may have to redefine their definition of users and customers to arrive at more balanced and even more hybrid revenue models.


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