How to Make Money from the Internet

The fundamental principle of capitalism is roughly this: Anything you do which doesn't suck can earn you money.

It can earn you money if it does suck too sometimes, but not nearly as much, and I'm not going to get into that here. The trick to actually making that money though is knowing how to do it. If you're selling a product, just charge more for your product than it costs you to make it, simple enough. If you offer some service, that's even simpler. Just get someone to give you money in exchange for it. Like "I'll clean your office for $100." It gets trickier though when you have something less tangible. To make money off constructing and maintaining a road for example, you must charge people for the use of your road, either with a tollbooth, or if you're a government, a road tax. When you're in news or entertainment though, you have to turn to advertising.

Most people have no idea how advertising works. Most people will say "I have never a commercial for a fast food joint and rushed out the door to eat there," or "I have never seen a commercial advertising a discount at a car dealership and rushed out to buy a car." Darn right you haven't. That's not how it works. The way advertising works is like this: You see commercials for fast food joints constantly. These commercials tell you everything those fast food joints sell and what it costs. So then when you're driving down the highway and you're getting hungry, and you see those fast food joints off the next off-ramp, you think "Hey, I can get a burger fries and a soda for about 3 bucks there, works for me!" To use our car example, let's say your car breaks down and you need a new one. Tada, on comes that annoying car commercial. "Hey look, that's just the sort of car I'm looking for! And it's on sale!"

If these people never placed any ads, you would have no idea what sort of cars were out there to buy or what was a fair price on them, and you would think all those fast food joints were just random small businesses off the side of the highway (OK, admittedly places like Burger King and Taco Bell make it pretty obvious what they sell). In fact, those chains wouldn't even exist, because the originals would never have gotten enough business to spawn other sites, and each new site would have to start from scratch with nothing but word of mouth to bring people in. Heck, even that wouldn't happen because fast food sucks and the only reason anyone eats it is that it can be found everywhere.

In these examples, everybody wins. Whatever TV station/magazine/what have you gets enough money from ad sales to stay in business, the people placing the ads bring in enough new business to make back the cost of paying the ads and then some, and you get your show or magazine for free (or practically free). Plus, if you ever need a new car or a close approximation of food on the road, you know where to get it.

Now then, I spent so long explaining this to drive home a very important point. Advertising does not directly generate sales, it just generates awareness to provide later sales. More importantly, I would like to stress that by and large, NERDS DON'T REALIZE THIS. The average nerd actually believes that the average person is so easily swayed that they will see that commercial for a fast food joint and actually run out and buy a burger. Stupid when you stop and think about it sure, but we're talking about people whose lives are largely based around the fact that they're smarter than the average person, so "other people are stupid" is going to be the first thing to pop into their heads in these situations. It's important that the average nerd doesn't get this, because it is the average nerd who set up pricing plan for internet advertising.

Obviously when you're placing an ad, you want as many people to see it as you can, and you especially want those most likely to be interested to see it. So everything with ads in it has some means of measuring how many people see them. With a newspaper or a magazine, it's pretty easy. Just say how many subscribers you have and what kind of magazine or newspaper it is, people with stuff to advertise on similar lines will pay you based on the number of subscribers you have. With TV, they have the Neilsen ratings to accomplish the same sort of thing. The Neilsen's are a deeply flawed system, but that's a rant for another time which I might even have written already.

With a web page, you can get even better information than with a magazine. You can count the people who read it on a regular basis, you can count how many people just look at it once and move on, and you can even get a frightening amount of information on these people, like the exact time and date that they looked at it and where they were at the time. Incidentally I'd like to take this time to relieve the paranoid out there by mentioning that when it comes to this site, I don't keep stats on anything at all.

What SHOULD be done with this information is that websites should track the average number of times their site is viewed per month, and a breakdown of where people are coming from. Send that information to competent ad agencies, they set up deals with people who want to sell related stuff, you get a decent price per view, and everyone wins.

What ACTUALLY happens is that the people who think the average person is stupid enough to buy stuff just because they see a commercial for it said up a system where clicking on an ad takes you right to a store where you can buy the advertised product, then and there, and payment is made on how many people click ads in this fashion. The site hosting the ad gets squat because even when people see an ad that sparks their interest, they aren't going to drop everything they're doing and concentrate on it. The advertisers might actually be getting increased business in those rare occasions where the ad is placed on a site with overlapping interests and the ad is passive enough not to make people claw their eyes out, but that's so rare at the moment I doubt it ever really happens. The ad agencies presumably do terribly because they're run by people who don't know the first thing about advertising and figure the problem is that people don't notice classy ads, and give us things like pop-ups. To make an analogy, thing of it like this: A simple ad banner is like a TV commercial. The person seeing it would probably prefer not to, but recognizes it's why they don't have to pay anything, might actually interest them a little, and it's easy to ignore if it's annoying. A popup on the other hand is like having someone barge into your home just as your favorite show is starting, stand between you and the TV, and start shouting at you to buy something. This will never make anyone buy anything, and they'd potentially boycott it as they connect it with the rude intruder. To continue with this analogy, the only way to make money off a page in the current system would be if when someone's favorite show came on, a full marching band walked past their TV.

Now then. Getting around to the title and indeed subject of today's rant. Here's how the internet can be used to make money. We get some people who have a background in print advertising, and we get them to work in internet advertising using the same sorts of campaigns, and feedback: Inoffensive simple ads and records of how many people see them. If done right, the resulting agency can get a ridiculously better deal for everyone involved. Less offensive ads for people looking at pages, enough revenue for sites to actually turn a profit off those ads, better sale generation for the companies who place them.

So who is going to bring all this about? Hopefully lots of people. If need be, I might give it a shot myself. It occurred to me as I was writing this that I know at least a dozen people who make a living in corporate sales and advertising, and these people aren't even selling stuff to nerds. You can't deny incidently that the sort of people who spend all day looking at webpages spend money like water. I mean, you've got what I'm guessing is a thousand dollar computer hooked up to a $20 a month or more internet connection just so you can look at stuff like this page here, and it's a safe bet answers to questions other people ask about videogames, the personal diaries of several random 20-something nerds you don't know and other frivolous nonsense. Not to mention that there's a company that makes a profit selling little plush Cthulu's in Santa hats. People like us would do wonders for the economy if some money came our way, trust me.

The only thing I can see keeping me from putting my theory here into practice is that I don't have any proof that it works. That's easy enough to get though. If a few people take me up on the offer I made at the bottom of my last rant, and let me know if the mentions I give yield a spike in their hits, that should in theory be enough proof for me to get people who actually understand the advertising business to get behind the idea.

Now who's with me?