Advertising provokes Premium Users

In Decem­ber 2007 Xing, a Ger­man social net­work, announced to show dis­play adver­tis­ing to add anoth­er rev­enue stream to their pre­mi­um user fees. With the begin­ning of Jan­u­ary 2008 the ads have been dis­played. For all users, free accounts as well as pre­mi­um accounts.

Many (2500?) pre­mi­um users seem to be in a rage and have begun to express their anger in forums and blogs, as well as in Xing groups.

So — where is the prob­lem? Pre­mi­um users already pay (in this case 6 Euro per month) for using an appli­ca­tion and they do not want to be both­ered with adver­tis­ing. Until today there is no reac­tion from the Xing man­age­ment. Since all inter­net users know that in the long run all major sites need adver­tis­ing as rev­enue stream they have to either accept that or pay a pre­mi­um fee. The pre­mi­um fee in social net­works has to be sig­nif­i­cant­ly high­er than the ‘5‑Dollar-premium-fee-standard’ because pre­mi­um user are heavy users, often return­ing on a daily basis. So the site owner has to com­pen­sate the lost adver­tis­ing rev­enues by pre­mi­um fees.

What about this pos­si­ble solu­tion? Just let pre­mi­um users par­tic­i­pate in adver­tis­ing rev­enues. The ratio­nale: users are not pissed by ads in gen­er­al, but they are pissed when not take part in the busi­ness some­one else makes at their expense. And par­tic­i­pat­ing in the whole deal they will start to respect adver­tis­ing.

What do you think?

UPDATE: Xing elim­i­nates adver­tis­ing on pre­mi­um accounts — with­out ask­ing for high­er fees, so far. More…

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