- Ads ugly up the site. If you are in the media business (i.e. selling ads to eyes), the difficult part is usually audience accumulation. If you build it the advertisers will come. So why put something on your site that will detract users from coming? Ads usually take away value from a site - that's why advertisers have to pay for placement.
- There's zero cost to not having ads. Most sites have very little traffic on day 1 - ads don't make anyone any money without an audience. So, if there's no money to be made on day 1 anyway, and the ads are ugly, why have them at launch?
- Ads can be bad for brand. Most websites starting out show ads from a network. That means 2 things: 1) the website owner does not have final control over the ad content; and 2) the network probably wants their brand displayed on or near the ads. A bad ad can offend people and the "powered by" branding can cause confusion. Neither of those things is good for you.
On the other side of the coin, the argument goes:
- Ads mean money. This is why you are launching the site to begin with. To make money. To build a business. Some money is better than none. Simple as that.
- If not now, when? Ok, so if you defer monetization until you've reached a critical mass of audience, you need to be prepared to pick that point in time when you've reached that level. When will you know?
- The culture of moneitzation. When you start monetizing your site on day 1 it actually builds monetization into your company culture. you start thinking about it. You start trying to optimize it. You build it into your design and your product plan. It flows through your veins. Dont underestimate this - ad monetization is like anything else, a learned art. And you can only learn it through experience and trial and error. Leaving ads off your site on day 1 means you are deferring this experience to a later date.
At Topix, we started monetizing the site via Adsense on day 1. Optimizing CTR's and CPM's became a company wide obsession. We started out making enough money to buy pizza, then rent and finally paying ourselves salaries. When we had our first $500 day on adsense, an email was sent to all - and followed up with several reply-to -all "woots!". Everyone had their eyes focused on the business we were building - and that was hugely positive.
Bottom line, most times I would tell people to start monetizing on day 1. There may be some special circumstances that don't allow you to, but you should think long and hard about deferring this decision.