Is there a POWER/VALUE IMBALANCE...
 

The traditional arrangement between the people who have content and the people who have traffic is: 1) "I'll let you use my content if you'll use it to send me traffic..." and 2) "I'll send you traffic, if you give me content..." The context within which this plays out is predominantly the TGP/Free Site, and the common traffic-to-value mechanism is the hosted gallery.

Where the line is drawn right now, the sponsor/content license holder provides hosting/bandwidth and marketing use access to the affiliate. This permission to use, however, comes with the requirement that the affiliate not "use" the content provided by the sponsor to promote any other. The sponsor, who hosts and controls the gallery template and the click-stream thereafter, is free to expose the traffic to a number of "secondary" monetization opportunities, before, during and after making the offer to which the affiliate sent his traffic.

My question: Is the commodity value of content still so high that sponsors should preserve the right to dictate exclusive use? It's a matter of universal acknowledgement that very few sponsors can afford to buy traffic profitably on the strength of conversions from just their own offers. It makes me wonder whether senders of traffic may be unreasonbaly constrained, given factors in the current marketplace.

There is a class of traffic sender, who is not so much "source" as "middleman" or broker between true traffic sources and destinations. They exist on whatever margin they can carve from what is already a "cut" of profit, and I think have been having a tougher time making a buck of late than previously.

And, on the other side of the fence, the folks who operate sites whose revenue basis is "advertising" must wonder what the hell is happening in Adult, that our CPM-equivalent traffic-buy offers are SHRINKING, when everywhere else on the Internet, they are going up.

This trend concerns me. If we keep the macro-model for our business where the value of content is inflating, we're going to find ourselves unable to buy traffic in the grander Web marketplace -- very soon. To make matters worse, 2257 Effects will increase the scarcity (and upward price pressure) of content even more.

Thoughts?


2HP

Wow that sure is alot to read when drunk

You included to many words with more than 3 syllables in them, dont expect many replies :winkwink:

Regards,

Lee

Lee, GFY is no longer the "Idiot Bin" it once was -- haven't you noticed -- ? -- :1orglaugh

2HP

I think we must be reading different GFY's bro :1orglaugh

Regards,

Lee

Lee, I value your board, too -- but one must wonder why you (and many other owner/admins) just can't stay away -- ;) -- must be something in all those one and two syllable posts -- :) And I am NOT just suckin' LensDick -- :thumbsup

2HP

it is that never ending battle . . . is content king, or is traffic king?

I just come here to poke fun at the morons and get a rise out of them, no other reason than that :)

Sometimes during the workday we all need to release the stress and tension, GFY is a great place to do that whilst laughing at the misfortunes of others who really do have much worse lives than ourselves.

The problem is, there are those on GFY that simply dont realize or, fail to comprehend what i do here, those that do understand why im here generally speaking, stay away and get on with their businesses and leave me to it whilst quietly sitting back and watching the fun unfold :)

Regards,

Lee

haha Making a pitch for the little guy... the market can support what it can support. If there is room to be paying more to the traffic providers and still make a healthy profit, then somebody will step in and fill the spot. Of course, I might be missing your point, and you're saying monopolies are being generated in the wrong areas... with actual competition difficult or impossible.

Funny thing is, the "traffic sender" is NOT the little guy -- not, in a scenario that is creating incentives to send his traffic somewhere else, to another monetization destination. so, the question is, would he be able to capture the traffic that he brings to his own site with content acquired from someone other than the host/sponsor -- ? -- this is a vital question, because in such a case the content he got would come WITHOUT THE LIMITATIONS on use imposed by the sponsor/host.

Let me be more concrete:

ANYTGP.com has a relationship with ANYADULTSPONSOR.com. I'm glad you said "...if there is room to be paying more to the traffic providers..." bcause that sets up the question "What determines how much room there is?" -- to which the only answer (given "Ideal"* Market Behavior -- in the *Economics sense of the word) can be -- what the customer is willing to pay. The way in which we transfer that variable upstream is in some measure that breaks down the number on a traffic-unit basis. Let's say the maximum amount a customer will pay for content XYZ is $1**/click -- just to keep the numbers easy **(LT, after full realization of re-bill revenue). In the usual affiliate/sponsor relationship, this means about $0.50 is going to the affiliate (and remember, we're talking about a maximum price point sustaining equal or greater demand). The operator of ANYTGP.com takes his 50 cents and puts into traffic and the site, with profit being whatever is left. The sponsor takes his 50 cents and has to cover his OV pay enough back to the content producer (usually through a content re-seller of some sort -- providing for a "living-wage" margin for each), and hopefully, have some profit left over.

What I'm saying is we have a couple of influences in place that are steering us towards trouble. 1) an in-place model (and "tradition") of use control belonging to the sponsor, which creates an artificial scarcity that is what keeps wholesale prices high -- now exacerbated by 2257), and 2) the proliferation of (non-adult) programs whose capacity to pay for traffic has no such self-imposed ceiling. What's going to happen is the savvy traffic people are going to send to better-paying offers, or become quasi-sponsors/pay-site operators themselves, because the economics favor cutting out the sponsor program because THEY ARE NOT ADDING ENOUGH VALUE TO THE CHAIN.





2HP

Basically you are asking the question which often leads book publishers to buy printing houses and car makers to buy design shops. Once you recognize that in addition to the cost of whatever goods and services you are buying, there is also a profit element, it can be appealing to bring those things in-house. Potentially you are not only going to save money and serve yourself better than a third party would, but you could have another income stream.

This doesn't only apply to the traffic provider but also to the content provider: both could question the wisdom of using the other. Quite a few have already done just that and are at least tentatively moving into each other's territory.

The move isn't without risk: your new site(s) may not sell as well as you anticipated. And although some traffic providers stay with a set of sponsors for long periods, the appeal to many is their ability to switch their traffic to take advantages of the latest hot sites or trends. That ability would be limited if you had to feed traffic to your own site(s) to recover your investment.

In fact, the content provider thinking of moving into traffic generation might have less at stake. With the 30%-60% margin he can potentially save, he can afford to go many routes. If relevant to what he chooses to do, he has lots of "waste" traffic to feed a new traffic pump. His main risk is that some of his bigger affiliates might object to helping create their own competition and that could put a serious dent in the benefit of his efforts.

Probably the biggest restraining factor is not pure economic consideration but the entrepreneurial nature of our business to date. Most self-made people, particularly those who have succeeded beyond their most ambitious expectations, are very reluctant to get involved in areas they do not really understand, or to trust other people to make any but minor decisions about their business. Yet the skill sets needed for the various aspects of this business are very different and even if one person does learn them all, there are only so many hours in a day. The kind of "cross-fertilization" you are considering is only likely to happen successfully on a large scale once online porn has more corporate-style operators.

You might want to start with simple one syllable words, like for instance the English words "to" and "too". They are in fact two different words. :thumbsup

Wrong, it's much worse.

2HP