Effective Strategy to Address Revenue Loss Due to Adblockers

Business Analytics Capstone Framework for Strategy Andrey Ozeryansky 01/07/2022

Problem Statement

Problem Statement Describe the Problem Adblockers present to GYF GoYaFace, INC has a significant issue that needs to be addressed or we might lose a large percentage of our revenue GoYaFace, INC makes the majority of our revenue through the sale of ads on our digital platforms. We have moved a lot of our resources over to mobile platforms but both desktop and mobile are needed to increase revenue Specifically we use a CPC or Cost per Click approach to monazite the majority of our social ecosystems. We base our billing rates on a data system that measure metrics such as unique IP traffic With the large adaptation of Adblockers our ad partners are seeing significant decreases in traffic from their ads and we are starting to lose revenue because of this. We need to do this with the major caveat of not alienating any of our user base

Problem Statement Application Exercise 1 Research Methods and Tools (Optional) We are aware of our problem. Adblockers are lowering traffic to our ad partners resulting in lower revenue. We need to use descriptive research to answer some important questions. Why do people not want to see our ads? Are they to intrusive? Are they irrelevant to the average user? Or maybe low quality? We have the option of focus groups, A/B testing, Surveys (both traditional and mobile) but each comes at a cost We also need to think on how we want to deal with this problem as we have migrated a large percentage of our infrastructure to be more mobile based.

Strategy

Strategy Describe your proposed strategy We need to drive our users to GoYaFace ad partners while at the same time not alienating the user base It is very likely that we are going to need two separate approaches to how we deal with adblockers. One needs to be for mobile while the other for desktop users Our organization lives on two ecosystems. A desktop Ecosystem and a mobile Ecosystem. Each needs to be managed separately with a key understanding that mobile users are more plentiful but their average time on our sites is considerably shorter We should first start by trying to diversify our revenue out of ads as much as possible. Maybe a premium version of our ecosystem that includes more functionality Every Adblock extension comes with a whitelist that allows the extension to be disabled for a specific site. Our second goal is to get our sites on that list. We should target focus groups and do A/B testing to see how we can make a our adds more appealing an then fall back on a possible mandatory add system to that might allow for minimum use of our systems

Strategy Application Exercise 2 Hiring a Team Leader (Optional) The fact that this person is my second in command means that I need them to be almost completely self reliant. I do not want to hire someone I need to manage at that level. Peggy has the more direct experience in the roll but I would put my faith in Carrie. The main choice would come down to needing someone for the long term. Peggy has a history of leaving startups and as second in charge the person must be there to the end. Carrie seems to have that. Knowledge on a specific concept can be taught. Particularly to someone who is willing to learn. I would hire Carrie and feel more comfortable with building a long term relationship.

Effects and Measurement

Effects Describe the anticipated effects of your strategy There is a high probability that we might lose engagement in the short term. People generally do not like change of any kind. We need to mitigate this first If we offer a premium version then we should give a subscription for a few months for free and only have them put in their basic info. We can use this to measure a baseline of churn for people who are willing to put in any work. We should also allocate more resources immediately proceeding the change to put changes into a positive light. Make it clear that the new system is better and here is why. We should have a large database of induvial info on each of these users and allow for a beta option to see who switches on their own accord. Then we can get free feedback and make a feedback loop. They will tell use what they don t like and we can adjust. We need to be able to adjust while we are making these transitions and understand that there will be a cost associated

Effects Application Exercise 3 Designing a Deterministic Optimization Model Hard Skills 0.2 0.7 Soft Skills 0.6 0.4 Internal External There are three primary constraints that stop us from going with the obvious choice allocating our funds to simply hard external skills and soft internal skills. Those constraints are: 1. The hard skills must see an increase in $20,000 in total net productivity 2. The soft skills must see an increase in $12,000 in total net productivity 3. The internal program must be at least 60% of our total gains We have 4 primary variable to work with HI(Hard Internal), HE (Hard External), SI (Soft External), and Si (Soft Internal)

Measurement Describe the anticipated effects of your strategy and how you will measure them Using what we have learned we can use linear regression with the four dependent variables under the three specific constraints to attempt to measure our results. Our dependent variable being HI, HE, SI, SE as described in the previous slide. Our constraints being HI+HE >= $20,000 , SI+SE >= $12,000 , and (SI+SE)*0.6 .= SI+SE+HI+HE Business Analytics Capstone Application Exercise 3 Net Productivity Increase (in $ per $ spent on training) Training Internal External Total Net Productivity Increase (in $ thousands) Hard Skills 0.2 0.7 Soft Skills 0.6 0.4 Spending Amounts (in $ thousands) Trainging Internal External Hard Skills Soft Skills Total Spending Budget (in $ thousands) Productivity Increase in Hard Productivity Increase in Soft Productivity Increase Internal v. External 65 20 12

Measurement Application Exercise 4 Identifying Key Drivers 1. Identify at least one hypothesis that is explicitly linked to your strategy in a causal way. A premium version leads to diversified revenue which leads to less reliance on ad revenue 2. Identify at least one key driver and explain how that driver will be measured as your strategy is implemented. The amount of revenue generated from ads per average user compared to the average revenue generated from premium content. 3. Describe how you would go about verifying the linkage between the first two steps. Start with a dataset of historical users and then create a new dataset with the premium users. It can be a free beta test to begin. Then compare and try to find the core audience. That will also help with more targeted ads to users who might actually want them rather then selling cigars to kids.

Conclusion We are losing revenue due to adblocking software The revenue is generate by clicks to ads on our mobile and desktop sites By using mitigation tactics we can make users want to look at our ads using a whitelist We also make a premium version that give the user extra features to diversify our revenue structure