I'm sure everyone has received the email: Entrecard will begin accepting third party paid advertisements and make part of their system money based (vs purely credit based). Here's a summary from their mass email:
You can boil this down to the following 4 bullet points:
- In a week, we're launching an ad network where anyone can advertise through Entrecard widgets for CPM rates. This can be run of network advertising, or targeted by category. We are making available 50% of our inventory, or approximately 40 million monthly impressions.
- With the money we make, we are going to buy credits back from you. You will be allowed to sell credits via your dashboard, and we will devote 75% of daily sales to buying credits back.
- The economy will no longer be in a state of inflation, but rather in deflation which means your credits will gradually start becoming more valuable.
- For all this to work, we must institute an above-the-fold rule, which goes into effect in a weeks.
Here are the major problems I'm concerned about:
1. You have to pay a credit fee to reject paid advertisers:
We will continue to allow you to reject any ad you wish. However, to reject ads from paying advertisers, you will need to pay a credit fee for each ad you wish to reject. We don't know how much this will be just yet.
This REALLY stinks as far as I'm concerned. I'm very particular about who advertises on my websites, and this might be a deal-breaker for me.
2. You'll have to share your ad impressions with those who have paid money to advertise.
Whereas before, when you purchased an ad, you were buying a minimum of 100% of the impressions, you are now buying a minimum of 50%. However, the maximum is still 100% of the impressions, because if we have no ads booked for that category, or for the network, for any given day, you will still get all of the impressions.
You'll be sharing as much as 50% of your ad time with third parties who have paid for advertising.
I do see one advantage to the typical entrecard user: the ability to trade credits for money. Entrecard plans to buy back some of the users' credits:
With the money we make selling as much as 50% of our network impressions, we will purchase your credits from you, and delete them from the system. This means we're going to let you sell credits for cash, right from your dashboard!
I'm not going to jump to any conclusions--I'll wait and see how this works out.
What do you think? Is this a new birth or the death of Entrecard?