The million dollar Penny Arcade’s Kickstarter revalues content and ads

Penny Arcade is a popular web comic for gamers. I have friends who devote a portion of their lives to the forums. The site’s creators, Jerry Holkins and Mike Krahulik were named by TIME as among the top 100 most influential people in the world. I’m paraphrasing; Google’s ad planner says “OMG! Put ads here!” of the site.

Yesterday, Penny Arcade started a bold and interesting project on Kickstarter. In a campaign called Penny Arcade Sells Out the pair are offering to remove ads from the site in exchange for crowd sourced funding.

The first goal, the one that allows the site’s creators to bag the cash, is $250,000. At this level the leaderboard on the home page goes. At $525,000 all the ads on the home page go. At $999,999 all of Penny Arcade goes ad free.

At the time of posting the Kickstarter campaign as 2,078 backers, 35 days left to raise the funds and has made $143,911.

The project is interesting even at the first glance. It suggests an alternative route to content monetisation other than display or affiliate earned income. Except, of course, it would not be the content that is directly responsible for the income – it would be the community. This is a community that grew around excellent content, the niche and let’s not forget Penny Arcade Expo (PAX) – the 60,000 strong gaming conference created by Holkins and Krahulik.

Kickstarter, which this week announced it would be launching in the UK, might now be used to allow popular sites to raise money from their fan base. This isn’t successful micropayments. This is a functional donation model that allows tiers and rewards for viral growth.

The project is interesting after a second look too. Reaction from the community has been mixed. On the games trade press site, MCV, a number of users suggested ad blocks as an even better idea. MCV isn’t a grassroots gamer site. It’s an industry news site.

Jamie Oliver and Instagram CEO Kevin Systrom at LeWeb 2012 in London

The commentators seemed to miss the basic premise. This is a way for all of Penny Arcade’s readers do avoid ads, while still allowing the artists to make a living from the site. This is not about individuals opting out of ads through a subscription.

The comments on MCV are an echo of similar suggestions elsewhere. Some gamers hadn’t clued to the connection between ad blockers and content theft.

A world in which a strong community can fund a site outside of ads and by donation does raise interesting questions. For example, what about advertorials or affiliate links in content? Would they breach the contract with the community? Certainly it revalues the impact of ad blockers and the price of ads.

The evolution of ad exchanges and demand side platforms mean that even small (but quality) sites with inventory can invite advertisers to bid to display their creative. Sites typically set the price floor for the auction against their affiliate CPA performance or any in-house success they have had. A crowd funded community option introduces, at the very least, another factor in setting the minimum value on ads.

Do you think the Penny Arcade experiment will be successful? Is this a one off phenomena?

Andrew Girdwood is the media innovations director at LBi.

  • Paul C

    I don’t have any problem with Penny Arcade using crowdfunding to remove ads from their site, but I don’t think Kickstarter is the place to do it. What are they kickstarting? This isn’t a new project, or even a massive shift in business model – they’re just replacing (part of) their revenue stream.

    I can’t help but feel that there are a lot of other, worthier, projects on Kickstarter that are going to miss out on support because people have already donated $25 or whatever to remove unobtrusive, relevant ads from Penny Arcade.