Observations on Monetizing Small Web Applications
Challenges and Learnings from Side Projects
Engineering teaches how to build systems. However, practical experience is often required to understand how to build systems that can sustain themselves operationally or financially.
In 2017, I began developing utility tools for League of Legends, primarily for learning and experimentation. As usage grew, with some tools reaching several thousand monthly visitors, I encountered practical challenges related to their financial sustainability. This provided an opportunity to observe the economics of small-scale web applications.
The Economics of Side Projects
Most of my side projects tend to fall into one of these categories:
- Toys - Built primarily for learning, maintained infrequently.
- Labors of Love - Maintained using personal time and resources.
- Sustainable Products - Generating enough value (direct or indirect) to cover costs.
Transitioning these tools towards sustainability proved difficult due to the user base characteristics:
- High technical literacy (implying high adblocker usage).
- Lower average disposable income (many users were students).
- Specific, narrow utility needs (users sought quick solutions).
This user profile presented a challenge for monetization. The audience was technically proficient enough to block ads easily and generally sought quick solutions without deep site engagement.
The Adblock Effect on Revenue
Implementing Google AdSense revealed high adblock usage. Analytics indicated approximately 70% of visitors blocked ads. Of the remaining 30%, only a small fraction interacted with the displayed ads.
This meant a small user segment generated the vast majority of ad revenue, effectively subsidizing the service for others. The approximate monthly figures were:
- 50,000 monthly visitors
- ~15,000 seeing ads
- ~200 engaging with ads
- ~$30 monthly revenue
Experimenting with more intrusive ad placements (e.g., Google Auto Ads) increased daily revenue slightly, to approximately $1. However, this correlated with higher bounce rates. It seemed this approach negatively impacted the experience primarily for the non-adblocking users, potentially selecting for visitors less sensitive to site quality.
Assessing the Value Exchange
It appeared there was a mismatch between the utility users derived and their willingness to support the tools financially or through attention. Users found the tools useful for specific tasks but generally did not:
- Disable their adblockers.
- Pay a subscription fee.
- Make one-time donations.
- Engage deeply with the site beyond their immediate need.
This seemed less related to product quality and more inherent to the nature of these tools: lightweight utilities solving specific, infrequent problems.
While the tools were functional and used, their perceived value did not align with common monetization models. This situation seems common for side projects that offer niche utility.
Approaches Towards Sustainability for Side Projects
Through experimentation, several approaches seemed more viable for maintaining these projects long-term:
1. Align Monetization with Perceived Value
Reducing ad density to minimal, non-intrusive placements slightly lowered revenue but correlated with improved user retention metrics. This suggested that for quick utility tools, monetization intrusiveness should be proportional to the perceived value exchange. Minimal perceived value seems to necessitate minimal monetization friction.
2. Explore Different User Demographics
Developing similar utility tools for different domains, such as TheCarpicker.com (a simple car comparison tool), revealed differing audience economics. Users in domains like car shopping exhibited different ad interaction patterns and potentially different adblock usage rates compared to the gaming audience.
3. Prioritize Learning Objectives
Shifting the primary goal from revenue generation to skill development provided a different framework for evaluating the projects. Viewing them as learning platforms justified the time investment based on technical and operational knowledge gained. This perspective helped avoid forcing unsuitable monetization strategies onto them.
4. Reduce Operational Costs
Migrating certain projects, like LOLSkin.info (a tool for browsing League of Legends skin information), from cloud hosting to a self-managed home server significantly reduced recurring costs. This transition also offered practical experience in server administration, caching, and performance tuning. A lower, fixed operational cost reduced the pressure for revenue generation.
Value Beyond Direct Revenue
It's also worth noting that side projects offer value beyond direct monetization. These include:
- Demonstrable skills relevant to employment.
- Testing grounds for techniques applicable in professional work.
- Experience with varied technical challenges.
- Personal skill development (e.g., UX considerations).
These non-financial outcomes represent significant value, particularly for projects that exist primarily for learning or exploration.
Observations for Engineers Building Products
Based on these experiences, here are some observations for engineers considering the operational or business aspects of their own projects:
- Utility does not guarantee monetization potential. A useful tool isn't automatically viable commercially.
- Consider audience economics early. User demographics and behavior patterns constrain monetization options.
- Learning itself has value. Skills gained can justify project effort independent of revenue.
- Focus on sustainable operation. Ensure a project can be maintained at low cost before attempting scale.
- Recognize the portfolio effect. A collection of small projects can provide diverse learning experiences.
Concluding Thoughts on Side Project Economics
The environment for side projects seems likely to remain challenging. Factors like competition for user attention, hosting costs, and user technical sophistication suggest that sustainable projects might increasingly need to:
- Deliver highly specific, targeted value.
- Operate with high efficiency and low cost.
- Identify non-intrusive, value-aligned monetization if any.
- Address clearly identified needs within an audience.
This suggests engineers should consider not only the technical implementation but also the operational sustainability and user economics when developing side projects.
Ultimately, sustainability for a side project might not equate to profitability. It can also mean achieving a balance where the value delivered—to users and the creator (through learning or portfolio)—justifies the effort and cost of its maintenance.