As I pulled up my favorite Pandora station, Red Hot Chili Peppers, I anxiously awaited the install of some cool track like Scar Tissue or Give It Away. Instead I was greeted with a movie trailer-like 30-second ad followed by a plumbing ad followed by a ‘what’s your favorite sandwich’ Panera ad. A song later, I got hit with another ad and then followed up by yet another. The frustration seeped quickly through my blood as all I wanted to do was listen to a few tunes of my favorite rock band. It dawned on me recently that new technology launched through apps or a website is really exciting when it is unencumbered by the fact that eventually it will need to make money. Think about these examples below.
- FACEBOOK– Facebook is still one of the most widely used social mediums that exist today. However, like all technology machines built for growth it inevitably needed to produce a profit. It started with those quasi annoying but easily forgettable little boxed ads on the side of your Facebook page. Those were fairly easy to swallow because they weren’t really in the line of sight. Now that Facebook is a publicly traded company, we are all starting to get “suggested posts” in the middle of our daily news feed. Did I ask for these? Do I want these? NO! However, this will just be the start of more ads and other things that will make us truly hate this social media medium.
- PANDORA– Please, not my precious Pandora. But it’s true. You can’t move the stock price of the company without figuring out how to drive revenue. So, here’s the plan. We will inundate you with as many ads as possible on the FREE version, until we pound you into submission to pay us $3.99 a month for the upgraded version. Believe me, I don’t let my money slip away easily but I am thinking about doing it just to get rid of the annoyance factor. Next up? “I Heart Radio” fans beware.
- TWITTER– For all of you tweeters out there, your day is coming (the early days of which are here). When you aren’t a publicly traded company, you can focus on growing revenue without being accountable for profit. Now, that Twitter has announced an IPO, it won’t surprise me in the least bit if a little flying bird crosses my screen and drops an ad down in the middle of my twitter feed. It’s coming. You already get a glimpse with “promoted trends” and “promoted tweets”. Say you heard it at Your Smart Money Moves First.
In the end, all technology sites will need to monetize sooner or later. We get hooked on new technology with sexy new ways to enjoy our social media or some favorite new app. Realize that sites including Pinterest, Instagram, Vine, and others are going to be advertising on a smart phone or a tablet near you sometime soon. It’s not personal. It just business. Goodbye, my precious Pandora!
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Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®, is co-CEO of oXYGen Financial and is a top ranked personal finance blogger (www.yoursmartmoneymoves.com). He is a regular contributor to Investment News, The Wall Street Journal, and The Atlanta Journal Constitution. Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS.