Pocket's Monetization Strategy

April 20 2015

I’m excited to see Pocket has finally monetized in a way that’s not a subscription plan for power users. I previously wrote about their ad monetization possibilities in late 2013. Now I’ve finally seen the first ad served up by Pocket.

Pocket sends a weekly digest email that shows the popular articles that its users are reading. It’s one of my favorite emails to consume, as I detailed here. This week, I noticed that one of the recommended articles is not an article but in fact an ad for Asana, a workplace collaboration tool.

After that, I noticed that in fact the entire weekly email, “Pocket Hits”, is sponsored by Asana.

This is an interesting first step in advertising and monetization for Pocket. They have always had enormous amounts of data about their end users. Critically, the articles I hold in Pocket are a good collection of my interests, both personal and professional.

I always thought they would start including ads into the actual list of pocketed items. It seems they still deem that sacred for now; hence, why they’re starting out with advertising in the email digest first.

If done right, Pocket should be able to place display ads that seamlessly match my interests. They should see that I save a lot of articles about Hadoop and Big Data - that’s a signal to show the Hortonworks ad. Or, they should see I really like basketball and the NBA - then they show a Nike basketball ad.

I think ads within the actual pocket list are inevitable. Pocket has raised $14.5 M so far across three rounds (CrunchBase). Interestingly, they just raised $7 M back in February (that’s probably why they have more job openings now, including a PM position). They’ve messed around with subscription pricing for a premium version of Pocket that allows for better search and tagging (and creatively packaged with other productivity apps such as Evernote). However, I doubt they’ll be able to truly scale a revenue-generating business on that business model alone. Sooner or later, they’ll need to monetize every single one of their users.

I’m not against this, at all. I love Pocket and wish to see it succeed as a service. I’d like to see it integrate with many more services by default (especially browsers). I’d rather see Pocket get really good at serving me ads rather than fail by trying to get me to buy an expensive premium product.

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