What is revenue sharing? and Decoding it within an Internet advertising company.

Revenue sharing is the sharing of profits and losses between stakeholders, who could be general partners , a company's employees, or between companies in a business alliance.

Sometimes, revenue sharing is used as an incentive program – a small business owner may pay partners or associates a percentage-based reward for referring new customers, for example. Other times, revenue sharing is used to distribute profits that result from a business alliance. How is this implemented within an Internet advertising company?

An Internet advertising company is a company that provides advertising services to its customers over the internet. Let us take for example ,television advertisements.Various TV channels provide advertisement services for different clients who want to advertise their products or services over the TV. The clients will decide, only to advertise in the most popular channels which have maximum viewer ship. Channels attain maximum viewer ship by telecasting programs of interest to the viewers, for eg recent movies,debates.etc.

Similarly over the internet, an advertising company will have its own website which is equivalent to TV channel in the case of TV ads. Now for the website to cater its clients for advertisements, it will need to own a decent traffic (people visiting the website daily) through its website. How will the company achieve it? That is were revenue sharing comes as a an incentive program to attract more members to join the website and create decent traffic.

The advertisement company will provide its members with services to advertise their products,business or services over the internet.The member can buy individual advertisement services such as banner ads,login ads,pay er click ads etc according to their need.The company will also provide advertisement packages commonly known as "adpacks", which will have certain services clubbed together. It is mostly when the member buy such an advertisement package , the company will entitle the member to attain a daily revenue share in the form of rewards, provided the member meets certain conditions, such as the member will have to surf daily a certain number of advertisements at the website. Various advertising companies share their revenues daily till 110%-150% adpack purchase value is attained.

I know you have your eyes are bulged and surprised at (110%-150%) return. For eg : If you purchase an adpack worth 100$. Not only you get to do advertising at the site the company will share a part of the companies profit daily with you till you have attained 100$ of your adpack cost plus a 10%-50% bonus (varies with different companies) you will get 110$ - 150$ back through profit sharing .Time duration to attain this return varies on the companies performance ,it might take 30 days ,60 days or 70 days depends on the "revenue generated at the company daily".

A company can have other sources of revenue , but we are decoding with respect to only advertising business.

An Internet advertising company can have mainly 4 sources of revenue, and a company without these 4 legs of revenue cannot gallop further for long.In other words the company and the business model will collapse within a short span of time with some people gaining and most of them making loss.

1)Revenue through sales of advertising packages (adpacks) to its members.

2)Revenue through membership fees from its members.

3)Revenue through transaction charges from its members.

4)Revenue through sales of advertising to large MNCs.

As you see the common factor in the first 3 sources of revenue is the company's "MEMBERS". Therefore member management becomes the back bone of business operations for this company to thrive and excel.

It is the Members who bring the revenue and reap the benefits.The company with proper member management will grow its membership base in no time.When the company has a strong membership base, at only that stage can the company look at the 4th source of revenue to get large MNCs as clients to advertise.

The service provided to the members is what attracts more members to join, and that solely depends on the trustworthiness of the owner of the company and the services provide by a quality group of admins,who handle day to day activities of the members.

In my next blog I will be relating in depth, the findings with respect to the true events within rev share advertising companies. Stay tuned.