business-model, payment, advertisingI’m going to be launching an education oriented service that would be of use to both teachers/professors and to students.
I’m considering three different approaches to monetization :
I think I’d probably go for either (1) or (2) and (3). My question is which approach (advertising supported or paid) would likely get the most traction the soonest. And which approach would likely be the most profitable in the long run?
To a certain extent, it comes down to how you are going to offer support of your product and at what end of the market are you pitching it. If you intent to offer very minimal support and work across thousands of users, then an ad-supported model may work. If however, you want to work with few users and offer them deeper and bespoke levels of support then a subscription model would be better. You can then offer different payment tiers for different levels of service (think Gold, Silver, Bronze idea).
Clearly signing up to Adsense and chucking a few ad units on the site is a very quick and easy option, but you should think longer term and what sort of reputation you wish to have. Getting that right at the beginning is much easier than trying to reset later down the road.
Also, you could offer a different model to your user groups. Why not have the areas accessed by the students as ad-supported, whilst charging a subscription to teachers and professors.
You’re focusing on the wrong question. You should be asking either, “What problem am I solving?” or, “What value am I creating?” Then your supplementary question is, how does the user who benefits want to pay for that experience?
The best way to work this out that I know is to engage with users, objectively through split testing and subjectively through customer development interviews.
If that’s your strategic answer, you’re left with a tactical question of how to price while you’re working on pricing! Here’s what I’d do.
Source a list of educational establishments you’d like to become customers or advocates. Require registering users to provide their affiliation. Treat (say) a third as though their institution is a “member,” so they get the service. Offer (say) another third a ninety day free membership. The remainder get limited free access - perhaps to a small subset of your content. Be consistent - once you’ve decided how to treat someone from one institution, treat everyone else from that institution the same way.
This kind of approach preserves your ability to monetize downstream, without prejudicing the final decision. You have the basis for delivering the service, for charging per user or per establishment, and for mixing it up with (for instance) free and paid content, or different access levels. And you have a testbed to explore whether users can become agents of growth.
Leave advertising alone for now. It’s easy to introduce at a later date, and it may well be part of your strategy (either because it turns out to be the best way to harvest value delivered to young users, or because it gives you a simple “pay to go ad-free” up-sell). But unless it boosts your credentials, it will undermine your ability to appear to be a paid service, and it may choose the door to institutional selling. So hold off until you know it’s part of the strategic answer.
The service could be advertising supported and then free to use.
Advertising is not a efficient way to gather users. These users are mainly short-time or one-time users.
The service could be pay-per-use / subscription.
Now a day, this kind of concept is highly in demand. You may choose to do this instead of the above one. FYI: Along side, you may provide free-trial or some grace-period to which they can familiarise themselves.
The service could be sold at the school, district or the University level.
If it is worthy enough and your main scope of project is education then definitely. Do take note, success factor in working with schools and universities is not fast. They often have too many processes to perform.
which approach (advertising supported or paid) would likely get the most traction the soonest.
Advertising will give you traction, that you are looking for. Such as website views, mobile app downloads, registration and others. Note: This is for short-term only. This will not last long.
And which approach would likely be the most profitable in the long run?
Based on my experience, I feel The service could be pay-per-use / subscription. will give you consistent revenue and will help your product stay in market for longer period.
PS: This is completely based on my experience in Education Industry.
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