Do in-line ads indicate a SaaS product's monetization strategy is flawed?

Answer 1

It trades in some of the value of the service with decreased usability and increased user dissatisfaction in exchange for revenue. Pay services trade in some users who aren't willing to pay for revenue.

It's hard to say if this means that the overall monetization strategy is flawed, since we don't really know all the numbers and targets.

I think everyone is fumbling with the monetization issue, and while site owners have developed great ways to build value through evolution, they frankly suck at monetization which doesn't in some way cannibalize the value they created.

Answer 2

Ads are a kind of last-resort monetizing strategy. But you can do ads if they don't look like ads. Offering discounts for other products through a referral from your service, is an add. But if both the user and you benefit, it will not be perceived as much as an ad.

Answer 3

StackOverflow is not SaaS!

Well, I guess that could be argued, given that the SaaS moniker has been abused so much that nobody really knows what it is any more, but without going into a pages-long theoretical debate about the definition of SaaS, suffice to say "SO is just a website, no fancy-pants acronyms here thank you very much (IMHO)"

This is tangential to the question anyway. I too would be curious to find out answers to things like 'how much can you impede the customer', whether you call it SaaS or not. I don't know anything about the market, but I have some suspicions as to what the answers will be:

How has the growth of SO impacted traffic to JoS/BoS/DoS?

I'd be surprised if it had impacted at all

How has the inclusion of advertising on SO affected revenues?

Without advertising, SO would have no revenue, so the effect is that revenues have increased by infinity percent

How has the inclusion of in-line advertising on SO impacted traffic (or maybe reduced the growth curve) if at all?

I don't know if this is something you can measure at all until you get to the scale of google

What is the proper balance of "impeding the customer" and advertising to maximize both profits and traffic?

"It depends on who your customer is" - if you have a large base of uneducated idiots, their tolerance for advertising will likely be quite high, and vice versa of course

Are you better off maximizing profits by charging for answers like some of the subscription Q&A sites, even though it reduces traffic and search engine exposure?

Only if you place no value on goodwill or the longterm health of your site