Over the past few months, I've received a number of messages from people asking how Instructables makes money. The context has always been along the lines of "this is so cool, how can I help to keep it going." I think many of us remember the late 90's when all sorts of really cool services (and some not so cool) suddenly emerged on the internet, couldn't figure out how to make money, and promptly disappeared; so, the question is how do we make sure Instructables keeps going.
I describe Instructables like this: Instructables is an interactive online magazine about do-it-yourself projects. Next, I mention the wide variety of detailed projects with step-by-step instructions and the strong community.
In term of our business, the important part of the description is "magazine." Currently, we make money by selling some of the space on our website to advertisers. There are two types of ads: impression-based and action-based. For impression-based ads, we get paid a certain amount each time an ad appears (called an impression). We try to sell these types of ad ourself, and have some networks that help out, but the important thing is that sales-people are involved and we have to determine the best advertisers to contact. For action-based ads, we get paid a certain amount each time someone clicks on one of the ads. These are the "Ads by Google." These ads are placed algorithmically by Google and we have limited control over which ads show up; there are other systems, but we use Google's Adsense.
It's not much of a secret that we're not profitable yet. The amount of money we bring in from selling advertising space doesn't quite cover the costs of keeping the site running. Fortunately, I have some investors who are covering the difference. So, this means the we need to sell more ads, and sell them at a higher price.
In a good magazine, the ads are often as much a part of the content as the articles. When I crack open a copy of Kiteboarding Magazine, the ads are gorgeous, remind me of good times at the beach, and show me the latest gear (which I might build myself or buy depending on whether the forecast is for wind this afternoon, or next week...). We strive for the same thing here on Instructables, and it's a work in progress.
So, I'd like your thoughts on whose ads we should be running? Which companies, products, or services are a good fit with Instructables? Bonus points will be awarded for answers with companies that already advertise online and where they are currently advertising (getting people who have never advertised online before to make the jump can be difficult). Also, who is advertising on other sites that you visit?
In addition to advertisements, we have ideas for a product directory that would have links to our favorite tools, kits, and supplies. Any thoughts on items that should definitely be included in this? Anything else you'd like to see in a product directory?