Hidden Revenue 21#
The logic that the user is responsible for the income of the business is abandoned. Instead, the main source of revenue comes from a third party, which cross-finances whatever free or low-priced offering attracts the users. A very common case of this model is financing through advertisement, where attracted customers are of value to the advertisers who fund the offering. This concept facilitates the idea of 'separation between revenue and customer'.
Examples: Iconic Cases
How they do it: In 2014, Pinterest generated its first revenue, when it began charging advertisers to promote their products to the site’s millions of users, consisting of hobbyists, vacation planners, and do-it-yourselfers. It generates revenue by displaying advertisements in the form of “Promoted Pins.” Promoted Pins are based on an individual user’s interests, things done on Pinterest, or a result of visiting an advertiser’s site or app (via re-targeting).
Learn more about Pinterest →
How they do it: Advertisements help keep Skype free for millions of users. These advertisements are displayed in an unobtrusive way and will not disrupt Skype user’s experience. If customers have purchased Skype Credits or a subscription, you will not see advertisements for other companies in Skype.
Learn more about Skype →
How they do it: YouTube’s platform, website and mobile apps are all free to use. In fact, over 5 billion videos are watched every day. In the absence of paying customers, advertisements on YouTube cross-finance the vast infrastructure needed to support YouTube’s operations.
Learn more about YouTube →
How they do it: Facebook is free for private individuals and businesses. The main monetization happens through the possibility for companies for targeted advertising.
Learn more about Facebook →
How they do it: Twitter does not charge its users for accessing its platform or using its mobile apps. Rather, advertisements are shown periodically, and brands may pay Twitter a fee to promote their tweets sl that they appear more prominently throughout users’ newsfeeds.
Learn more about Twitter →
Below, the top industries for the pattern "Hidden Revenue" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Top Industries
67% of firms using pattern
26% of firms using pattern
18% of firms using pattern
All Industries
Below, the pattern "Hidden Revenue" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
Top Co-Occurrences
11 pattern co-occurrences
7 pattern co-occurrences
6 pattern co-occurrences