Digital Business Models and Advertising (Week 3)

Question 1

What is a Business model?

Answer 1

A group structured to achieve specific goals like profitability, growth, or social impact through coordinated efforts and processes

Question 2

What is Value creation?

Answer 2

Involves both producing goods/services (supply-side) and meeting customer needs (demand-side).

Question 3

Examples of ‘capturing’ Value Creation

Answer 3

–> Sales Model

–> Transactions fees Model

–> Subscription Model

–> Advertisement Model

–> Affiliate Model

Question 4

What is Disruptive Model?

Answer 4

Disruptive models alter industries, forcing incumbents to adapt, based on Christensen’s theory of simpler, cheaper innovations.

Question 5

Examples of Digital Business Models

Answer 5

–>Brokerage (bring buyers and sellers together and facilitate transactions e.g. auctions)

–> Referral (using a rating system to promote services e.g. Uber)

–> Subscription (paying amounts periodically to use a product or service e.g. Netflix)

–> Rental (Temporary use of goods or services for a fee e.g. Airbnb)

–> Freemium (Offering basic services for free, with premium features for payment e.g. Spotify)

Question 6

Forms of Online Advertising

Answer 6

–> Display Advertising

–> Native Ads

–> Paid Search

–> Social Advertising

–> Mobile Advertising

–> Email Advertising

Question 7

Display Advertising: Contextual vs Behavioural

Answer 7

–> Contextual: matches ads to the content of a webpage using keywords or analyzing the page’s content

–> Behavioural: targeting and retargeting based on past browsing behaviour

Question 8

Ways to base Pricing Models

Answer 8

–> CPM: cost per thousand impressions (shown)

–> CPC: cost per click

–> CPA: cost per action (paying for sign ups etc)

–> CPI: cost per install of an advertised app