Error 402: Where’s The Crowd To Fund This?

As our Error 402 series continues, I swear that eventually we're going to get to some of the more promising models and stuff that actually has been working in some cases shortly, but we're still covering some of the stuff that hasn't fully panned out (or, has only panned out in limited setups). For this article, though, we're going to cover a few models that have worked for some, but not broadly enough to be super successful for most content: crowdfunding, affiliate ads, and data sales.

I would put these in a hybrid category, in which they really have worked out great for some sites, if they meet certain criteria, and not so well for lots of other sites that don't meet those criteria, or that think that because other sites have done it, they can do the same.

The first of these is traditional crowdfunding, the kind made popular by sites like Kickstarter and Indiegogo. While neither were focused on journalism, both have (and still do) support some journalism operations. About a decade ago there were attempts to create journalism-focused crowdfunding platforms. Most of them are now gone. A decade ago we experimented with one, BeaconReader, which helped us raise over $60,000 that we could use to focus on our reporting over the fight for net neutrality.

Beaconreader was designed to be a cross between Kickstarter and Medium. You could both crowdfund and publish on the site. Unfortunately after a few years it went out of business, as did others like Contributoria (which was a part of the Guardian). There were also high profile initial successes, like The Correspondent, which raised an astounding $2.5 million in a month to open a U.S. bureau to go with its Dutch operation. Except, that ended in disaster. In that case, there were complaints about funders feeling misled during the process, while the Dutch entity had much more limited U.S. expansion plans than were implied.

But, the larger issue seems to just be the periodic nature of traditional crowdfunding. It's useful for a one-off big project." To fund a specific project for a specific period of time. An album. A video game. A movie. Perhaps a specific investigative report. But it's much more difficult to run an ongoing project with crowdfunding, because it's just so unpredictable going forward. There's less that's sustainable about it.

This is where more periodic crowdfunding offerings (things such as Patreon or Substack) have found more success for ongoing projects. That's not to say there isn't a place for crowdfunding. I still think it has real promise, but it has to be used appropriately: for one-off projects, or maybe just to get something new launched that then has an ongoing revenue model.

Next up: affiliate ads and links. These have been around for quite some time, and can work very well. The quintessential example is The Wirecutter. This deep dive review site made its name in creating exhaustively deep reviews on all sorts of things, with a final single top recommendation." And it basically made its money on affiliate links to the products mentioned in its reviews. That was decently profitable by all reports until the NY Times bought the site, diluting the brand and the quality of its reviews.

Of course, the success of that site also lead to a phalanx of copycat sites, and now there are just way too many Wirecutter wannabes, all hoping to get by on affiliate link revenue. And, thus, as with so many things that are successful when used in one way, affiliate links have basically become the realm of spam sites and garbage sites. They can still be useful in certain contexts, like Wirecutter, where an element of trust has been built up, but they fail in cases where people are just trying to cash in and play search engine optimization games to try to get a cut of clicks.

As such, there are plenty of sites that still do affiliate links, and there was a time we experimented with them here, but all in all, they feel kinda questionable on a news site, and seem to only make sense directly on review sites.

The final area I'll mention, just because it does exist, at least for a little while longer: data sales. This happens on certain websites. There are data brokers who request that you plug in some code so that they can track users on your website and aggregate them with other websites, and have a more granular picture of people who are surfing the web.

I am aware of other content websites that have made a fair bit of money from such services, to the point that the publisher of a fairly well-known site recommended I talk to them, saying it could really generate revenue. I spoke to them for a while and just kept asking how it wasn't a violation of the privacy of the community here, and kept getting told it was fine because the identifying data was hashed." But also, that because other sites would use the same hash so they could get an accurate picture of how people surfed across websites.

When I pointed out that this seemed to pretty clearly violate our privacy policy, they said that it was no problem, and I could just update the policy. And that's the point I stopped responding to their emails.

I think those businesses are not long for this world in an era of the GDPR and the CCPA/CCPR in California and (hopefully) more laws targeting data brokers directly. But I did want to highlight that this is the way some content websites have monetized in the last decade.

At this point, though, I've covered a lot of the historical landscape, so I want to dive a little deeper on some of the more successful and interesting models that are working for some sites today, and whether or not those are more broadly applicable, before then taking everything we've learned to date, to explore some potential new (and hopefully better?) models.