Flixya Case Study

Flixya uses Google AdSense and the AdSense API to remain profitable while sharing 100 percent of revenues from user-generated content.

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Business

Started July 2006 as a video site with a dedicated, loyal member base, Flixya.com has grown to support a thriving social media community. While Flixya makes it easy to share videos, photos, and blogs, the company has also consistently sought to do more to give back to its members and to those in need. From the beginning, Flixya’s goals have been to offer the most engaging elements of popular social networking sites and to allow members who contribute content to the site to share in ad revenue.
The original version of Flixya shared revenues 50/50 with members and enabled them to earmark their earnings for charities. But today, true to its tagline "Share Everything," Flixya has become the first social networking platform to pay members 100 percent of the ad revenue from their user-generated content and have the funds distributed directly to its users.
"We believe that the true value of social networking is the community, and we continue to strive to promote member ownership with our platform," says co-founder and CEO Adam Oliver. "By rewarding the community of contributing members with 100 percent of ad revenues, we believe Flixya represents the second generation of social networking and raises the bar by setting the standard for the future of online social responsibility."

Approach

To share ad revenues with members who contribute content to the site, Flixya needed a contextual advertising service that could deliver ads relevant to a wide body of content across the site. The company also wanted a solution that could be tightly integrated into the site, providing members with a fast, seamless way to sign up and begin earning revenues on their user-generated pages. Oliver then learned about the Google AdSense Application Programming Interface (API). Google AdSense is a program that enables online businesses to earn revenue from serving ads precisely targeted to their sites; the AdSense API is a free service that allows Flixya to integrate AdSense into its site offerings.
"We were excited when we saw the AdSense API. We immediately realized it would enable a new monetization model for us that would generate substantial revenue and push 100 percent of everything earned on user-generated content back to our community," says Oliver. "All this, without the overhead of individual account management, reporting, or time-intensive and costly payment systems to facilitate publisher payments." In 2007, Flixya became one of the earliest users of the Google AdSense API.

Results

"The AdSense API took only one day to implement, and it was easy to get started," Oliver recalls. "Since then, the AdSense API has proven to be a great way for us to aggregate and present relevant ads across a broad spectrum of topics that match contributors’ content."
The AdSense API has made it easy for members to sign up on the site and immediately begin to contribute content and earn 100 percent of the revenue from the associated AdSense impressions. "The AdSense API has made things seamless for our members," explains Oliver. "They can apply for a Google AdSense account during the Flixya registration process. It’s quick and very optimized."
Since the AdSense API integration, traffic rates and new sign-ups on the site have improved significantly. Flixya's membership base has grown steadily, mostly via word of mouth. However, Oliver believes that offering 100 percent revenue sharing on user-generated pages is another factor that is contributing to Flixya’s escalating growth rates. Member loyalty is also on the rise since implementing revenue sharing through the AdSense API.
Not only is the site growing, but Flixya remains profitable, even after sharing 100 percent of ad revenues on user-generated content. The company garners substantial AdSense advertising income – which currently accounts for 95 percent of its total revenue – from site pages not directly contributed by users. In addition, the shared revenue is supplemented by referral bounties the site earns for users who sign up through the AdSense API.
"However, we believe the most impressive result of our revenue sharing model is how it is positively affecting our members’ lives," says Oliver. "A single mother of four contacted us to say she’s supporting her family and staying off of public assistance programs from the income she’s deriving from Flixya. In some countries, members report that they are earning more from Flixya than they do from their annual income."
"With the AdSense API, we have a solution that fully enables the business model we’ve long dreamed of," says Oliver. "Very few companies online or offline can state that they are giving back 100 percent of the revenue their members earn and still remain profitable. The Google AdSense API has contributed to our success in many, many ways."


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