Are there decreasing marginal returns for Head-Fi sponsorship?
Apr 13, 2005 at 6:27 AM Thread Starter Post #1 of 28

Iron_Dreamer

Sponsor: Audeze
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As we have added quite a few new sponsors lately, I noticed today that the top of the screen is starting to get rather crowded, which leads me to wonder whether as we add more sponsors, they are each recieving a lower overall amount of additional traffic, as a result of their membership. When there were far fewer sponsors, not only did they seem much more distinct (i.e. not a long list that begins to blur together) but they also seemed special, as if they were the "only" ones who could be Head-fi sponsors. Now adding a new sponsor seems almost mundane, whereas a while ago it had a bit more "wow" factor, to me.

Anyone else notice this similarly, or not?

BTW this is not meant to be any kind of argument against sponsorship, or anything of that sort. It is mere an observation of the possible implications of sponsorship.
 
Apr 13, 2005 at 7:31 AM Post #2 of 28
I suspect that you may be on to something. It is certainly a pattern that I've noticed as well, and as you say, the "wow" factor in terms of exclusivity is not there to the extent that it used to be. We do have a lot of sponsors now.

But there has also been a tremendous growth in traffic during the past couple of years in terms of the number of members. When I joined in Nov '02 there were less than 3,000 members. Now there are nearly 25,000!!! As a result, some of the 'old' sponsors may now be getting a smaller fraction of a much larger market - yet still equalling or exceeding their head-fi-based sales of 2-3 years ago.

The other factor to consider is that the sponsors we now have are much more sepcialized, and in several cases, do not compete directly with any of the other sponsors (or at least not to a large extent). For example, the primary markets for both Slappa (high quality media storage cases) and The Ear Plug Store (hearing protection of all sorts) are niche areas within the overall headphone/portable audio market. Yes, The Ear Plug Store does sell some headphones, and Slappa may decide to go this route at some point in the future as well - but both of these companies represent extensions of the "overall" market spanned by head-fi sponsors - and neither of them are in direct competition with the likes of Headroom, Meier Audio, Audio Cubes, etc., although these companies might offer storage cases and/or hearing protection products on the fringe of their offerings.

Where it gets tricky, and where I'd be concerned as a sponsor, is in broad areas like "cables" and "in ear monitors" where several of the sponsors are either in direct or indirect competition with each other. I'm sure that head-fi sponsorship is not too terribly expensive, and only time will tell if it remains profitable for each of our current sponsors to continue supporting the site. But again, getting a small fraction of a large market can add up to some nice profits because online customers are generally easy to deal with (i.e., cost effective transactions) and they represent new business that would not have occurred prior to the advent of ecommerce.

The other thing in head-fi's favor is that it's the only "real" game in town in terms of the online headphone market, so in a sense, companies that choose not to become head-fi sponsors do so at their own peril. Headroom is a bit of an exception in this regard, because they are large enough to be able to afford advertisements in audiophile print media such as Stereophile, where they derive the bulk of their sales. The smaller players almost have to turn to head-fi to get their name out and to build a reputation.
 
Apr 13, 2005 at 8:41 AM Post #3 of 28
I'm sure Jude will chime in if he wishes, but it operates a little differently than that.

And don't forget the support from Viewers Like You.
wink.gif


Head-fi needs more financial support.

-Ed
 
Apr 13, 2005 at 10:47 AM Post #4 of 28
I don't care.
 
Apr 14, 2005 at 12:49 AM Post #8 of 28
FWIW, even though there might be some dilution of the intensity of exposure we get due to more sponsors here, it is still a far more cost efficient way of getting the attention of qualified consumers than in more traditional media. I'll add that while Head-Fi is certainly the most headphone centric forum site out there, there are any number of other forum site that are probably worth our sponsorship dollar. iPod Lounge, for example, is iPod centric, but you almost have to use headphones with an iPod. Therefor customers there are very likely to be interested in cans.

Bottom line; you'd have to have FAR more dilution of impact befor Head-Fi sponsorship was as inneficient as print advertising.
 
Apr 14, 2005 at 1:44 AM Post #10 of 28
Quote:

Originally Posted by Andrea
I don't care.


You know, I hear ignoring takes less effort than broadcasting your apathy
rolleyes.gif


Iron Dreamer: I wouldn't have a clue as to how the number of sponsorships actually affects each of the sponsors, but I would suspect not very muck, if at all. The reason I say this is because it seems that most of them are different than each other; each offering unique and site specific items. Since this place is made of very discriminating consumers, many of you will visit each site and purchase on personal preference and not suffer the Bose syndrome. The fact that most of us march to the beat of our own drums (FOTM excluded
biggrin.gif
), I really do not think any of the sites are suffering.
 
Apr 14, 2005 at 2:23 AM Post #11 of 28
I don't care what happens, just make it go away. The fact that I can't see my own post is disturbing:

headfiadscrazy.jpg


Seriously, there's no way anyone is even going to glance at those ads for a second. There's too many of them.

I also have a really hard time believing how much Head-Fi costs. We have all of this income from these advertisers and we have all the contributors as well. I seriously doubt Jude is making payments out of his pocket anymore, so it's time to cut some of the advertisers. The google ads are the first I'd like to see go, and I'm more than willing to contribute if it means I don't have to see any more of those extremely annoying multicolored ads.
 
Apr 14, 2005 at 4:22 AM Post #12 of 28
Quote:

Originally Posted by MD1032
I don't care what happens, just make it go away. The fact that I can't see my own post is disturbing....


If necessary, scroll down like the many thousands of other people who viewed the site today did.

Quote:

Originally Posted by MD1032
Seriously, there's no way anyone is even going to glance at those ads for a second. There's too many of them....


It's no coincidence that Amazon/Alexa shows that the top Head-Fi "related sites" include several of our sponsors. So some people are obviously glancing at those ads. The privacy policy of the Google AdSense program forbids me from discussing any specifics, but I will say that it has become a worthwhile source of adjunctive revenue for the site.

Quote:

Originally Posted by MD1032
....I also have a really hard time believing how much Head-Fi costs....


Price out a cabinet and bandwidth at Level(3) lately? Sure, Head-Fi's full cabinet there isn't close to being full, but a whole cabinet was the smallest unit size available to us. And since I have work-related servers at that same facility, getting Head-Fi a cabinet there made a lot of sense to us so that we can check on Head-Fi's things when we check on our work stuff.

Also, I sign one-year commitments (and there was a recent cabinet price increase that is effective on our next 12-month term). Hardware, hosting, bandwidth, software, etc. from June 2004 to June 2005 will add up to a projected minimum of approximately $26,000.00 (I believe we may have already exceeded that), and is projected as high as $33,000.00.

Since the last major hardware upgrades, have you had reliability issues? To the best of my knowledge, since then, we haven't had one hardware-based failure, and certainly not a single bandwidth-related outage -- the only outages we've had have been very few, and, if they weren't planned, they were almost invariably human error induced (we have had a couple of minor software glitches that resulted in temporary downtime, too, now that I think about it). Even when we got "Slashdotted," we felt it, but we stayed up. Did you know that Head-Fi is now one of the most (and possibly the most) trafficked hi-fi forum on the Web? Did you know that in the past month, Alexa has ranked Head-Fi higher than even iPodlounge? We passed Audio Asylum last year.

Quote:

Originally Posted by MD1032
....We have all of this income from these advertisers and we have all the contributors as well. I seriously doubt Jude is making payments out of his pocket anymore, so it's time to cut some of the advertisers. The google ads are the first I'd like to see go, and I'm more than willing to contribute if it means I don't have to see any more of those extremely annoying multicolored ads.


I estimate fiscal period (June 20 2004 to June 19 2005) revenue from Sponsorships and Contributing Memberships will be in the neighborhood of $29,000.00. Do I want Head-Fi to bring in more than is spent on it? Absolutely. Why on earth would I want to plan for continued shortfalls? Is the site growing? Absolutely. Will we need new hardware sometime in the next year? Almost certainly. Did I just to commit to Level(3) for another year? Yes I did. Will we see as much Contributing Membership revenue in the following fiscal year as we did the first year it was offered? Based on the precipitous drop-off after the first big wave, probably not (by the way, for those who still haven't received your Contributing Membership Gift, don't PM me, please write me an e-mail at givememygift@gmail.com, and please accept my apologies -- and I know you're out there, as I have more in PayPal than I'm showing I should). If you want me to try to architect the financial goal of this site as optimistic break-even, you're nuts, as you can probably figure out who's left holding the bag when surprises and shortfalls pop up. Which brings me to a couple of your suggestions:

Reduce the number of advertisers? Remove Google AdSense? Will you sign an agreement with me to cover any and all financial shortfalls from the operation of Head-Fi, including meeting the needs of its future growth? If so, let's talk.

As for the Sponsorships: We've lost very few over the last almost-four years. And, as I look at the list of them, with the exception of our two Founding Sponsors (Meier Audio and HeadRoom), I don't believe I solicited a single one of them. If a Sponsor doesn't feel it is getting good ROI from its presence as a Sponsor of Head-Fi, I wouldn't expect them to keep doing it out of the kindness of their hearts, and to the net detriment of their bottom line.

And, with that, please let me take this opportunity to once again thank Head-Fi's Sponsors for their generous support, as, frankly, there almost certainly would not be any Head-Fi without the support of the Sponsors. And thanks also the folks who became Contributing Members this fiscal year -- your support is also very instrumental in keeping Head-Fi around. And thanks to everyone who visits Head-Fi, and encourages the development of new, exciting products, and serve as the population that drives our crazy, specific not-so-little-anymore niche marketplace.
 
Apr 14, 2005 at 1:42 PM Post #14 of 28
I just wondered if one couldn't make the top a little less overcrowded this way ?

pub.GIF


But of course, it could reduce google's ads visibility a bit, not a very good thing.
 
Apr 14, 2005 at 4:46 PM Post #15 of 28
Quote:

Originally Posted by MD1032
I don't care what happens, just make it go away. The fact that I can't see my own post is disturbing:

headfiadscrazy.jpg


Seriously, there's no way anyone is even going to glance at those ads for a second. There's too many of them.

I also have a really hard time believing how much Head-Fi costs. We have all of this income from these advertisers and we have all the contributors as well. I seriously doubt Jude is making payments out of his pocket anymore, so it's time to cut some of the advertisers. The google ads are the first I'd like to see go, and I'm more than willing to contribute if it means I don't have to see any more of those extremely annoying multicolored ads.



If there is to be more concentration of ads, I like the fact that there is a grid separating a quandrant up top, above the Google ads. Multicolored? You mean more than one range of colors? Head-fi has a long way to go before it comes anywhere near NASCAR level advertising.

And stop making assumptions.

You're making as ass of yourself and some guy named Umptions.

wink.gif


-Ed
 

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