YouTube
is a well known e-commerce site where they are able to generate millions upon millions of video
views per day. It is no problem for them to aggregate eyeballs from all around
the world on it. There are millions of people upload and download videos
everyday on face. With this competitive advantage (Enable to gather millions on
people's eyesight everyday), YouTube is using Advertising, affiliate and subscription
revenue model to sustain in the market.
https://www.google.com
Google's revenue model is just similar to YouTube, it depends most of its revenue generation on advertisement. Google generates up to 10 billions of total revenue and only 100-200 millions are from other sources like licensing.
https://www.amazon.com
While amazon.com initially is a online bookstore. It then diversified its products to electronic, toys, education, sports and so on. In addition, it is considered the pioneer in affiliate partnership marketing, where it uses affiliate revenue model as well. Besides, advertising and affiliate, it generate revenue using some other model which slightly different from YouTube and Google, that is transaction revenue.
We are going to discuss the revenue model implemented by these three e-commerce company in dept.
Advertising
YouTube
Advertising
is basically the most obvious and widely-accepted model to e-commerce sites.
Video ads and text ads are two popular advertisement models. Even though other
video sites choose to display both text ads and video ads, but until today,
YouTube only opt for text advertisement as they are not willing to ruin users'
experience on their site. Besides, YouTube can implement an email advertisement
as they have the data and information of all registered user. Advertisement which is paid by other
company to YouTube will then be sent out to users on daily, weekly or monthly
basis.
Google
Google use Adwords to run its advertisement. Google Adwords offers par-per-click (PPC) advertising to owner where both text and banner can be advertised. It enable advertiser present it to people at instant those people are looking for information related to what advertisers are offering. Basically Google only allows short text advertisement in order to prevent users being annoying.
Amazon.com
With its well known and widely acceptance in US, it provides advertiser to make ads on its webpage and most of the time, their partners and alliances will make advertisement on its web site in order to catch consumer's eyes and increase revenue at the same time.
Affiliate
YouTube
While
affiliate is another revenue model which is similar to advertising but its fee
is different. Advertisement is a payment of a sum while affiliate is focused on
CPA (cost-per-action). Meaning that, YouTube only get pay when user buys or
pays for the service or product through the page displayed in YouTube.
Amazon.com
As mentioned above, Amazon.com is considered the pioneer in affiliate marketing. Up to now, it did run its affiliate program as everyone can be a part in its affiliate program as shown in this website ( https://affiliate-program.amazon.com/ ). With this affiliate program, it actually enable Amazon.com turning consumer's click into cash which is going to be generated.
Transaction
Amazon.com
The main source of revenue for Amazon.com is from its transaction as Amazon.com is a plate form for Sellers to promote their products and buyers to buy what they want and needs while Amazon.com act as a middle man to settle those customer service, packaging, delivering and so on. From this, there are lots of transaction with Amazon.com and the amount increase day by day as people nowadays are more rely on internet. Instead of going out, pick and choose, people are more convenience in click and get the products in short period of time. Amazon.com get revenue from every transaction and therefore it can generate huge amount of revenue through out the year. As shown in here ( http://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study/ )
Subscription
YouTube
YouTube
can generate revenue using subscription model as it contains huge amount of
videos. It requires user to pay up a small amount of monthly fee or yearly fee
in order to access a certain part of video or a better quality's video.
Besides, YouTube provide a ads free environment to users with subscription.
This is a graph showing the revenue generated from few technological company.
It shown that Amazon.com is actually the leader among these e-commerce sites.
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