Have you ever wondered how Quora earns money? If you have accidentally been off-internet for the past decade or so, and don’t know what Quora is, it is, broadly speaking, a Q&A forum. It is The Place on the internet to share your doubts and problems, from college and work-related issues to even quite personal ones, and get answers to them.
Quora was founded in 2009 by Adam D’Angelo and Charlie Cheever, two former Facebook employees. Since then, it has certainly gained popularity and is easily recognized by its famous logo which is a bright red, capital ‘Q.’
Initially, Quora did not have a revenue model in place. Instead, it depended upon its venture capital, which is funding given to start-ups that are growing at an exponential rate by their investors. However, gradually, they have tried incorporating ads and moved towards an advertisement-based model of revenue.
But it isn’t that easy. Revenue models are not linear and can have multiple dimensions to themselves. The article further tries to understand how Quora, a successful and remarkable forum venture sustains itself in an ever-growing market.
Everything You Need to Know
Before reading about Quora’s revenue model, it is important to study what exactly Quora is. The website is nothing short of unique. It is one of the most heavily used online forums by the audience. But what makes it so distinctive?
What is Quora?
Quora is a crowdsourced platform, which initially relied on its user base and its usage. The site is run by its users. That means that all activity that happens on the forum is user-generated: a user posts a question or a query, and it is answered by other Quora users. Users can also upvote answers that they like, which makes up for its answers ranking system. In a way, it is very similar to social media platforms. Questions are automatically categorized within various subject topics.
With this, we can easily divide Quora’s target market and its consumers into two very broad types:
- People who ask questions: These are users who mostly post their questions on the site and make it visible for other users to interact with, generating traction.
- People who answer these questions: Self-explanatory, people who answer these questions are also users who use their own experience and knowledge to provide well-detailed and coherent answers. Users later vote for the answers based on their relevance and importance. Often answers are given by scholars and academics from across the world, adding to the authenticity and accuracy of the responses.
It is this back-and-forth interaction between questions answered and answers given that keeps the forum alive and running.
The very aim of Quora has been to make knowledge accessible which is now only accessed by a few. Through sharing, knowledge locked away in books, papers and even people’s heads become available to all. The creators of Quora shared that their motivation for building such a forum was to “share and grow the world’s knowledge.”
Quora Revenue Model
Businesses don’t only start by serving customers. Of course, customers are an important part of the entire plan, but what’s really important to sustain a business is finances. A revenue model tries to understand just that. Sites like Quora, which are run mostly by users themselves, still have large expenses to pay. Plus, they too wish to make profits.
A revenue model tries to understand these expenses and how they can be met by generating funds. Revenue models, simply, calculate how they should charge their customers and generate more finances to meet their expenses as well as gain profits.
Initially, Quora had no revenue earnings. They merely relied upon their venture fundings which they received after showing a commendable growth rate. Quora, has, in total, conducted four rounds of such fundings, with its fourth (series D) funding rounded up to approximately $85 million with 5 investors.
However, that isn’t enough to sustain a business. Quora, even though started with a virtuous aim of making knowledge accessible to all, is not a non-profit organization. It is very much a business that seeks profits and so obviously, tries its best to monetize its services.
Given the aim of the creation of this forum, making the site paid would be counterproductive since that wouldn’t really make knowledge ‘accessible.’ On the contrary, it would be the exact opposite.
Hence, gradually, Quora has taken to carefully playing advertisements on their site, following an advertising-based revenue model. An ad-based revenue model is not a new one. In fact, it dates back to newspaper and television days and has expanded and adapted itself to meet the needs of e-commerce platforms. The website/newspaper etc. generates revenue by selling space to advertisers for putting up their advertisements.
The price for the advertisement space is usually estimated by how many advertisers bid for a certain spot. However, what’s interesting to see is how Quora incorporates ads within its interface, so splendidly that they do not look out of place while still standing out.
How Quora Incorporates Advertisements?
Quora creates and incorporates types of ads and even internal models to generate revenue. Here is a summary of the steps that it has taken to expand its revenue model.
Text-Based Advertisements
At its most nascent state, Quora usually relied on text-based ads. This format remains the most prevalent one. Text-based advertisements are exactly what they sound like, solely written words without any dazzling or brilliant pictures appointing them. While this may sound bizarre and not very smart since the foremost function of an ad is to grab attention, for Quora it worked splendidly.
Quora is a writing platform, which means that all questions asked and answers given take place in a written format. The users can use various functions like bold, italics, underline, etc. to give their answer an outline, but the point remains that primarily the site is a heavily text-based one.
The text-based ads which Quora incorporated on their website mixed itself skilfully with the main content of the forum, such that it could easily be overlooked and not pose a distraction for the user. At the same time, ads were also curated based on the user’s interest and the topic of the forum, which helped them get more clicks.
Image Ads
Same as text-based advertisements. Image ads too, buy out a spot on the website to showcase their advertisement. However, they take up more space and are accompanied by an image or a poster, which can help them stand out on a heavily text-reliant website.
Promoted Answers
Besides products and service advertising, Quora also allows for promoted answers. Promoted answers are a way for brands to advertise themselves and their services as a form of an answer to a user-generated question. Often, these promoted answers feature in the topmost relevant answers for a question, helping brands get a good exposure.
For example, a student looking for a good college and its prospects, puts up a query on Quora, asking what colleges are best suited for a communications degree. The social media manager of ABC Communications College can take this opportunity to not just answer the user’s question but also promote their own institution and attract more students there.
Brands also often ask brand ambassadors to write answers for such questions, asking them to write a positive review and their experience there. These features, however, are always accompanied by full names and the person’s affiliations with the brand or institution adding to the site’s transparency.
Curating Advertisements
Quora curates the user-ad experience based upon three elements: The Audience, The content of the ad, and user activity.
The content is aligned with a specific category and usually shows up only within the realm of a specific topic or page that it is relevant to. The audience is not the users but potential customers who might be interested in those ads and the services they sell. Lastly, user activity is understanding the likes, dislikes of the user- the forums that they most frequent and the topic they are most interested in.
A thorough analysis of all these elements reveals patterns that help curate and personalize the user experience, as well as help advertisers, reach a broader audience.
Revenue Models can be large and complex, this article barely scrapes the surface. As Quora grows and its user base increases, it is very likely that their revenue model too would go through some changes. Revenue models, as it is, aren’t static. They are ever-changing and growing, meeting the trends of the market and the needs of its users.
Frequently Asked Questions
Q1. What is Quora?
Quora is a Q&A website, which allows users to post questions, which are later answered by other users. It was founded in 2009 by two Facebook employees, Adam D’Angelo and Charlie Cheever.
Q2. What Revenue Model did Quora use in its initial years?
Initially, Quora depended upon its venture capital and had no revenue model in place. Venture capital is a form of funding given by select investors to a start-up (not a very new one) that shows signs of remarkable growth and progress.
Q3. What kind of revenue model does Quora currently follow?
Currently, Quora follows an advertising-based revenue model. This means that Quora, on its website, sells certain spaces or slots to advertisers who are interested in putting up ads on their site.
Q4. What have promoted answers?
Promoted answers are answers which are usually given by brands or institutions to advertise and promote themselves by answering user-generated questions. Promoted answers are usually paid by brands and work as an efficient advertising system that works without hindering the actual purpose of the website. On the contrary, it compliments it.
