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I received an email from Entrecard today mentioning changes that many members of the blogger community were expecting sooner or later.  Entrecard has always been criticized as it never had a robust revenue model and there was no official way to convert the credits earned from Entrecard to actual money.  This has led to many bloggers moving away from Entrecard to competing ad networks.  Entrecard has been struggling to come up with a solution that addresses publisher concerns while still maintaining their particular advertising exchange model.

The changes to Entrecard’s advertising model

Entrecard has finally announced that, starting in about a week, it will be opening up their network to 3rd party advertisers.  The advertisers will be able to buy up to 50% of the whole network’s (or a particular category’s) ad impressions.  This means that publisher ads will run for 50% to 100% of the impressions of the website they buy an ad on instead of 100% percent of the days impressions currently.  They will use up to 75% of the third party ad revenues to buy back credits from publishers and will delete those credits from the system.  The Entrecard team hopes that this will also address Entrecard’s inflation problem: Since there was no way to retire credits from the system (and credits can be earned by activity without needing actual money to purchase them), the number of credits circling around Entrecard’s publishers is over 44 million and growing steadily, decreasing the value of the credits held by publishers.

Will these changes solve Entrecard’s problems?

I personally feel that this move is too little too late.  A lot of the publishers that were frustrated with no way to monetize the credits earned from the Entrecard system have already moved to other ad networks.  Although they can now earn actual money through Entrecard, the earnings will probably be smaller than that offered by other networks as paid ads will only have 50% of their impressions.  The are also other issues with the changes that Entrecard is undergoing:

• Entrecard now requires their widget to be present above the fold on publisher blogs.  Currently most publishers install Entrecard below the fold reserving the better positions for more lucrative advertising opportunities.  This also helps increase average visit time while droppers look for the Entrecard widget to drop on.  Since many other CPM based ad networks insist on being above the fold, Entrecard will have to compete for space with them and may lose out.
• The price at which credits can be sold back to the network has not been mentioned.  Since the money available to buy back credits depends on Entrecard’s third party ad revenues, either the number of credits that can be sold back daily will have to be capped, or the price will change to reflect the demand of redemptions.  Either way, I expect that the new system will be very confusing and frustrating to most publishers. 
• Although, publishers will have the option to reject third party advertisements, they will have to pay a credit penalty for each rejected ad.  Considering that most other ad networks allow publishers to control the ads being displayed on this website, this condition may put off some publishers.
• If the Entrecard economy really does experience deflation because of the deletion of credits from the system, many publishers will be tempted to hoard credits until their value increases, decreasing the credits being sold back to the system.

We will have to wait for further announcements to completely understand the changes that Entrecard will undergo and how these changes will affect it’s user base.  However, for publishers wanting to jump ship, there are some alternatives out there already.   Update:  There seems to have been a lot of negative feedback against some of the policy changes and Entrecard has made some updates to their proposed changes.  Read about them here.

I would love to hear your thoughts on the changes proposed to the Entrecard system.  Will these changes satisfy users or will there be a huge decrease in the publishers that have installed Entrecard on their system?  Also, stay tuned for an upcoming post on alternative ad networks.

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