Myths about the new pricing
Written on April 8th, 2008 by phirate
Just a few naturally occurring worries about the pricing change that have been floating around on the forums that seemed worth addressing.
Entrecard is doing this so we’ll have to buy credits now!
No, believe me this was never a consideration in the change, and if it becomes clear that people can’t reasonably advertise based on 100 drops a day or less, we will fix it somehow. Maybe you won’t get on Problogger for that without saving for a while, but in general you should be able to find and advertise on a few sites a day easily enough.
Nobody will drop anymore! my drops are already falling!
While your individual drops may be falling – changes in the way the categories are browsed will mean a bit of instability there – the overall drops have seen a marginal increase since the same time yesterday.
My blog isn’t worth 1024ec
Remember that the price your blog will spend most of its time at, is the price unit one higher than people are willing to pay. So if you spend almost all your time on 1024ec, your blog valuation by the community in general is 512ec – that’s what they’re willing to consistently pay for your spot.
It’s too early to really pay too much attention to those numbers.
These ad prices are way too high
Some of them are, yes absolutely, and we expect those to come down over the next couple of days. However over all the ad pricing is clearly affordable, we have a significant increase in ad purchases today vs the same time yesterday, and while partly that’s the result of a bit of a crazy spending spree by many users, we do expect it to pretty much continue at a slightly higher rate than before.
For those who are curious, EST time:
Midnight to 19:30, 7th: 5,938 ads purchased for 195,377ec total
Midnight to 19:30, 8th: 7,169 ads purchased for 349,591ec total
The higher total price is being taken as indicative that the prices more accurately match the value users judge of particular spots, and are therefore more willing to spend the credits it takes to advertise on a particular spot. One particularly good outcome if this trend continues is that we will be able to significantly reduce the “tax” rate on advert purchases, something I’ve wanted to do for a long time.
April 8th, 2008 at 7:38 pm
All of these things seem to just be a effect of the sudden change. Just as the sudden rise in ads bought is also a direct result of the price change. I do think the tax coming down makes sense.
What I don’t understand is why the seemingly random nature of the advert cost calculation? Was it not feasible to base advert cost on a combo of Alexa/unique visitors//feeds/cards drops?
April 8th, 2008 at 7:58 pm
How much someone is willing to pay is not random, and allows everyone to take into consideration their own goals and value metrics. Some people love alexa, some people hate it. Some people don’t submit to Technorati.
This is a catch all for market demand, and is beautiful in its simplicity.
April 8th, 2008 at 8:07 pm
It seems to be happening too fast without enough notice to the community who uses the site. Please ask people about these things before you do it. I am more than a little bit perturbed about this. It is a questionable practice to change things suddenly. It is almost whimsical in a funny way.
April 8th, 2008 at 8:44 pm
Why not just let people submit their own pricing, that’s simple?
2,4,8,16, 32, 64, etc are random numbers. Why not 5, 10, 15, 20, 25, 50, 100, 200, 300, etc.? Then at least there isn’t a huge jump from 512 to 1024.
Before there was a sense of why advert cost moved, now people are buying random ads because of their price. Yes, they should look into what these ads are going to net them, but we both know that doesn’t always happen. Yes, this will level out to a certain extent in the next week or so. But to what extent, we shall see.
I only question because I care.
April 8th, 2008 at 9:00 pm
Does that mean we won’t get credits free anymore and we’ll have to pay for them?
April 8th, 2008 at 9:02 pm
[...] entrecard, if you read this and my last post – I’m available to [...]
April 8th, 2008 at 9:55 pm
How about a Project Wonderful highest bidder gets the Ad Box type system ha?
Would not that be better?
It is still “Market Driven”.
April 8th, 2008 at 11:05 pm
I really don’t understand how these AD prices will ever level out. It would be great if you could return to the old system and work out the bugs as far as ranking goes. Also 300 drops a day is killing me. 50 or 100 limit may be better – people may burn out and stop using it all together. 50 drop limit means people could spend more time actually reading the blogs.
April 9th, 2008 at 1:42 am
This pricing change somehow confusing me. It used to be 5c only to advertise on my blog. But after the change it suddenly significantly increased to 512c. This is surprising me..i don’t think my blog is worth 512c. For me i don’t mind to let people advertise on my Entrecard with low credits event 5c only as long as i can invite more traffics coming to my blog. But now, i don’t think people want to spend 512c to advertise on my blog..:)
April 9th, 2008 at 4:42 am
Great ideea
April 9th, 2008 at 4:53 am
you can except people to have time to drop 100 a day!
with this move practically cheap advertising is out, and id be happy if i could advertise on one site per week, that will probably never bring back enough clicks to make it worth it.
and yes, as you said NO CHANCE for most of us of advertising on sites that actually worth their price.
April 9th, 2008 at 4:59 am
I personally like the new system and agree, after a few days people will see things settle as prices come down.
However, ad prices doubling is the new systems biggest flaw in my opinion. It doesn’t reflect true value. If the market values blog “X” at 700 credits, that’s too bad, because you either pay 500, or 1000.
I’d like to see a 10 day wait be closer to 500; 15 day wait close to 1000, and 20 day wait close to 2000.
Then for every day after a 20 day wait, an extra 500 credits is tacked on. This will lower the increase after each ad purchase, so that more accurate values are assigned.
April 9th, 2008 at 7:10 am
Phirate,
How about programming an override feature for each of our dashboards that allows us to change the system price if we so choose? Easy fix to the problem. The most active Entrecarders would likely tweak it all the time, but the vast majority probably wouldn’t. That way you don’t have to change the system since the override could write directly to the specific field. The next ad in would default back to the system pricing, as I suspect it counts the number of previous ads and then calculates the new price. We would just have to go in and override it again, but I wouldn’t mind doing that if it meant I had more control over my ad price. As it is I put a message on my profile that my traffic wasn’t sufficient to justify a price over 128 EC if that. What happened? Two people must not have read it and bought ads anyway, so my new ad price is currently at 1024. Go figure.
I know you are taking some heat and I feel for ya! Most of the big complainers don’t seem to have paid attention to the Forum posts and Blog entries, which is why you’re developing a better broadcast system, right?
-Kent
April 9th, 2008 at 8:30 am
I think everyone needs to calm down!
Give it some time and keep dropping. So many people are saying “IM LEAVING” but have no reason to as its all crazy at the moment.
We need to give it about 4 days to calm down. Once it has you will see the price drop and whole new level to entrecard open up.
April 9th, 2008 at 9:19 am
Strange my Ad price didn’t jump from 512 to 1024 after I accept a new ad?
This was over 4 hours ago!
Loving this new system………NOT
April 9th, 2008 at 10:25 am
I’m still confused by this new system.
I can’t afford to purchase one ad on any of my “favorites” now – and I dropped cards yesterday like mad to try to earn ec.
To say that this new system isn’t geared towards paying $ for ec is a bit disingenuous in my opinion. I don’t see how else I could afford to “buy” an ad now.
Also, to spring this upon us with little warning was kind of unfair. I’d been saving ec to purchase an ad on an “expensive” site on my favorites list, and the blogger was actually willing to save me a spot – suddenly, her ad cost is astronomical – over ten times what I can earn by realistically dropping for ec.
All this said, I know this is a free service, and there are growing pains. I just wish the whole “transition” had a bit more logic to me, as a “regular” Entrecarder (not a super-dropper).
April 9th, 2008 at 1:16 pm
@Mo,
We know the prices are too high right now. You’re not alone. No one is paying them! Which means tomorrow it will be half what it is today, and the day after that halved again. This is the dust settling, as we call it. You favorite blogs will become affordable within a few days.
April 9th, 2008 at 4:27 pm
yes Graham, than everyone will jump on it, doubling the price again make it impossible for a regular entrecard user to afford it, unless they can sit in front of the internet 24/7 to catch that moment when the prices halves.
April 9th, 2008 at 4:29 pm
of course, as a user, we have no way or right to decide, we either go with it or not, its up to you to make changes, its your idea, your system. ive been complaining enough, too much even.
April 9th, 2008 at 5:42 pm
I have to agree. The doubling of the costs is seriously flawed. Give me a penny one day, and then double it each following day, and I’ll be a millionaire before the month is over. This kind of economy is unrealistic and not sustainable.
(And yes, I am being patient and waiting for the jacked up prices to come down. I’m talking about the math behind it.)
April 9th, 2008 at 7:05 pm
@ Common Sense,
It is totally sustainable. If people want to pay 500 for an ad, they will. If they think thats too much, they’ll only have to pay 250 the next day. If people continue to pay 250, but not 500, its completely stable, and this logic works for every step of the pricing increase.
April 9th, 2008 at 8:20 pm
But when people, even highly-active card droppers (those that stay home all day), cannot afford to advertise on the active and popular sites because someone always drops on the 256 ec sites before they can, then their site isn’t going to receive the traffic it once did. And after a while, you are going to end up with people who remove the widget, stop trying to advertise all together, or start posting negative comments on their own site against EntreCard. And what do you end up with? A genius internet marketing tool that is now worthless.
I’ve been here since the early days of EC, and I have praised it for the service that it provides to the common man, but really, exponential pricing system is highly impractical, and you are going to find the activity dropping because people won’t be able to afford to advertise on more than one site at a time, and probably only for one day during the week on any site that has any kind of real activity. (Sorry, run-on sentence.)
The old pricing system was as fair as you could get. The more activity the site had, the more expensive it was to advertise. That follows most real world marketing practices. It reflected real “value” of the blog. All this new pricing system does is requires you to spend more money on a site that isn’t necessarily worth 64 ec, let alone 512 ec.
This is your system, and it isn’t my (or anyone else’s) place to tell you how the system SHOULD be done, but really, I think you are going to find this backfiring and hurting the reputation of the service.
April 9th, 2008 at 8:59 pm
Graham, the problem is that if 10 people jump on an ad when it’s 256 and they’re all approved, the ad price shoots up to 262,144. Saying it’ll drop in a few days just isn’t a good enough fallback when the price goes up that much – it would be several days before the ad price drops to something more affordable.
I can understand why Entrecard is defending the new system, but you need to consider modifying the price curve so it doesn’t jump as much as it does. The lower prices are fine. The upper ones are totally out of reach to the entire community. It’s not a case of people paying for what they think a site is worth if NOBODY can afford to buy an ad on some of those sites.
Is anyone willing to pay 262,144 credits for one ad?
April 9th, 2008 at 9:25 pm
@ Mo How many more ec do you need Mr. Manic Monday? I’ll donate to you.
April 9th, 2008 at 9:34 pm
Re Ben’s comment about multiple ad requests: Is that accurate, the part about each of the 10 people being able to purchase the ad at 256? Shouldn’t the system default to the next higher price as soon as each one is approved? I’m not sure myself.
April 9th, 2008 at 9:55 pm
kent, what I meant is if 10 people have a chance to buy the ad at a certain price before any of those ads are approved, and then all 10 ads are approved … the ad price will go skyward. It should go up, sure, but not as much as it does.
April 9th, 2008 at 10:33 pm
Ben,
Thanks. So if I have it right, let’s say there are 6 approved ads in the queue and the next ad would sell for 128EC. 10 people then apply to advertise on the site and each are only charged 128EC? Then when the site owner approves the ads there are 16 in the queue and the rate goes to a big number. The net result is that no one will advertise again until the queue drops down to 4, 5, or 6 and the price is back around 128. And if that’s the way it works then we are doing potential advertisers a favor to not approve their ads right away as it maintains a lower, more affordable price? Sure, we get less ad revenue, but more people end up being able to buy ads at a lower price and then there is a big waiting period. Does the same logic hold true when the ad resetting hour occurs and the queue moves forward? For example, I have two ads that are awaiting approval on my site and my ad cost bumped up even though I did not yet approve them.
Phirate, feel free to jump in and clarify, else Ben and I will continue to have a pleasant conversation by ourselves.
-kent
April 9th, 2008 at 11:00 pm
kent, as far as I’m aware you are correct on all counts – though I’m not 100% certain on what happens when the ads reset.
I did read some comments from other users who suggest not approving all the ads at once. This does sound logical. However, I don’t think everyone is aware of the impact of approving lots of ads in one go – at least not until they find out the hard way. Perhaps there should be something very obvious on the ad queue that says something like “if you approve all of these ads your ad price will increase to X ec”.
This could certainly reduce queries in the future. While it’s true that big changes usually result in a flurry of queries, reducing the queries in the long-term from new users might be a good approach here.
As always, just my opinion.
April 10th, 2008 at 10:00 am
I thought the price was to reset at midnight but my price per ad has bounced around every day, staying at either 512 or 256. I’m just waiting for the dust to settle not looking at buying ads till things work themselves out. Though I will have amassed a ton of credits by then, just from dropping cards.
April 10th, 2008 at 10:00 am
I fear it would backfire on Entrecard. At this moment, it would be better to sell the EC points and use the proceeds to directly buy links, reviews or ad space.
And it would be futile to work on the dropping to get 16,384 ec waiting for 14 days on a blogger’s space.
But my observation is not conclusive as I still believe that we all have to wait for a week or two for the pricing to settle down. Let’s see next week.
April 10th, 2008 at 1:37 pm
I think you should consider removing the “cheapest” category from the ad buying page. People are going to that page and chain buying ads, without ever looking at the sites.
That in turn is likely to make some members load up dozens of new blogspot blogs just to grab the free 25% from ads since 32 credits will be the minimum you need to pay and ALL blogs get purchases.
Otherwise, i love the change.
April 10th, 2008 at 9:51 pm
This is priceless…. this is really, really ****ing priceless.
Graham, you are brilliant. Don’t change a thing – the strong will live, the weak will die and those of us who rmain will continue to get the word out to the masses as you tweak, adjust and weather your growth spurts.
Bravo, man… anything that causes this much upheaval without actually hurting anyone in any real, significant way, has my full-blown support.
I’m gonna go write a nice little Sam Freedom article about this right now…
Hallelujah! Can I get an Amen!?
Sam
April 10th, 2008 at 11:08 pm
Amen, Brother Sam!
You did raise an excellent point, and one that needed to come from an Entrecard “oldtimer.” The strong will continue on and the upheaval related to changes such as the one we have just gone through will weed out some folks who would probably have a better experience elsewhere.
April 11th, 2008 at 12:20 am
I’m kind of laughing at the many posts I’ve seen all using the 250k credit ad prices or whatever as a reason why this ad change sucks, when it’s so clearly obvious, and has been bashed into our heads, that this is a temporary thing.
I’m not a huge fan just yet of the new prices, mainly because I believe 512/1024 will become the defacto standard prices, and that’s just too high for even power users. But, I’m definitely willing and able to see where it goes.
Pretty sad how many people are freaking out lol. Give it a chance guys, the world is not ending.
And Amen Sam, Amen
April 11th, 2008 at 5:30 am
I was wrong in my previous comments – the ad price goes up as soon as an ad hits your queue, even before your approve it.
April 11th, 2008 at 11:35 pm
I am not sure of the new pricing system, I just continue dropping on the blogs who drops on me, that’s simple, forget the pricing system, drop on, then i drop on you, just for a traffic exchange, nothing more expected!
April 12th, 2008 at 12:43 am
Its all down hill from here.
How on earth is even the most deadly serious drop master going to drop 262144 cards and spend it all for 24 hours of advertising on Problogger when he can only drop 300 cards a day? at the current going rate of almost $10 per 1000 Ec that’s over $2000 dollars a day to place an Ad on Problogger. I am certainly not going to Advertise there. Doesn’t make financial sense to me. And besides he has never even dropped a card on me before.
This is what is going to happen in the next few weeks.
* Entrecard top spots will be occupied by blogs which are not just popular on EC but all over the web.
* Crazy prices like that of Problogger will fall to a more affordable level as demand falls.
* being a drop master no longer guarantees you the top spot on EC. Only great content will do that for you.
* Some Bloggers will stop dropping cards and go back to blogging.
* There will be an increase in “Advertise on me and I advertise on you”
* The death of “u drop i follow” networks
* start seeing what blogs are really worth based on demand. And not on cards dropped on other widgets.
I hope this works out well for all of us.
April 12th, 2008 at 1:06 pm
Hey Alfred,
Read my lips…
THE MARKET RULES!
Its all down hill from here.
Hey, whatever you do, Alfred, don’t let optimism ruin your day. Has it occurred to you that this is just a prelim and the finals have yet to be determined? If someone HAS 200,000 Ec to advertise on pro-blogger, then, apparently, they somehow EARNED it… and if they spend it, then Pro-Blogger won’t get ALL but PART of it.
So eventually, as the big credit owners spend their big credits, they won’t have as many credits to advertise on pro-blogger type blogs and the COST of pro-blogger type blogs will come down significantly.
And since widget owners don’t get 100% of the ad cost, they won’t have any kind of unfair advantage over anyone else because as the ability for people to advertise on their blogs drop, so will the cost and so will their earnings which, I’ll reiterate, are only a percentage of the cost.
So yes, with Sitehopping and yada yada, people will still be able to realistically earn 300 Ec per day, and even still buy EC or whatever, and, eventually, make enough money to advertise on a problogger blog… if they want to.
So maybe someone is willing to spend 1k-2k and 4k to 8k to advertise on a pro-blogger site. The really cool thing about all of this is that it really IS going to work out perfectly as long as people like you, and the other glum doomsday prophets, hold course and just ride it out with everyone else.
But even if you, or others, bail, or just participate less, it will STILL work its way out, maybe just taking a little bit longer.
This latest change is AWESOME… It’s just my humble guess that the people who think it’s faulty and doomed are the same people who would look you in the face and tell you “the surge isn’t working…”
http://tinyurl.com/4a2pvo
Anyways, I’ll be writing and article on the insanity very shortly… hope you’re able to make it.
http://tinyurl.com/33febb
Sam
April 14th, 2008 at 3:44 pm
I think the pricing should depend on factors such as:
number of drops received/unique visitors,ads in que.
We should also be thinking of new blogs or new members of ec community.
It is not worth spending a lot of hard earned ec credits on some-where with one visitor per day.
Simply put : 2^X is not good idea!