We're switching to Free + Ad-Supported (April Fools)



April 1, 2012

by Alex Solomon

This was an April Fools post, we’re quite happy with our current business model. We enjoyed writing it though, so we’ll keep it up:

We are very excited to announce a major change in the business model of PagerDuty: free + ad-supported. As you all know, our old business model involved charging money for the PagerDuty product. In fact, we didn’t even have a free plan; only paid plans with a 30-day free trial.

This is a perfectly cromulent business model which works for many companies, but it just doesn’t scale as we set our sights on becoming the next Facebook or Google. Both Facebook and Google have free products and both companies monetize these products by showing lots of very relevant ads to their users. These companies are definitely web-scale and so is their very successful business model of “free + ad-supported”.

Visual display ads (aka “ignorable” ads)

After making the decision internally to switch to free + ad-supported, we were faced with an essential question: where and how to advertise? Everyone’s already doing visual display ads. In fact, display ads became popular back in the 90s during the first dot-com bubble.

The main issue we have with display ads is that they’re very easy to ignore: you can do so by just looking away. We’ve dubbed these type of ads “ignorable” and we’ve decided not to adopt them for our web application. If we sold these types of ads to advertisers, we’d feel like we’re ripping them off because 99.9% of people just ignore them (assuming they haven’t installed ad-block to do so automatically). As such, we are perfectly content to let Facebook and Google fight over the ignorable display ad scraps.

Ads you can’t ignore

We knew we had to come up with a revolutionary new type of ad, one that you can’t just ignore. We tried really hard to do so and even had multiple company-wide brainstorming meetings in the process, yet we were completely stumped. Then, one day, one of our interns came up with an idea: advertise inside the PagerDuty alerts. Brilliant!

As you know, PagerDuty plugs into a variety of monitoring systems and manages alerting, escalation and on-call scheduling. We dispatch phone call alerts, SMS alerts and email alerts to our users. Instead of messing about with display ads, we thought let’s leverage the alerts we already send to our users in order to advertise to them. Let’s go through an example to see how it works:

Let’s say you are on-call this week and your entire data center goes down at 2am.

Your monitoring system notices and tells PagerDuty.

We ring your cellphone and wake you up.

When you pick up, you hear “PagerDuty alert” followed by a quick audio advertisement from one of our many ad sponsors, followed by the details of the particular issue (in this case “Your data center is down.”)

The best part is that you can’t ignore these ads. In order to hear the critical details of your outage, you have to sit patiently and listen to a quick 30-second spot about delicious Pepsi Cola or durable Goodyear Tires. For those of you who are responsible for on-call duty, it’s your job to receive alerts from our service and listen to them, including the ad within. Brands can now, for the first time in history, advertise to an extremely captive audience, one whose job it is to listen to our alerts and the brands’ ads.

The new-and-revolutionary Alert-Ad™ ad network

We knew we were onto something really big here. The world has already experienced ads on the web, TV, radio, billboards, magazines and newspapers. However, nobody has ever advertised inside IT alerts, until now.

PagerDuty is the first company in history to bring advertising to phone call, SMS and email alerts. This is absolutely groundbreaking and revolutionary; alerts are the next frontier of advertising. We are doing this via our new Alert-Ad™ advertising network.

Alert-Ad™ allows advertisers and brands to reach a very captive audience of sysadmins, devops and developers, a market segment that has been notoriously difficult to advertise to. This demographic has typically been anti-advertising: they tend to use ad blockers, prefer browsing the web using text-only browsers like Lynx and tend to avoid paying for cable service, instead preferring to watch Netflix. They also tend to be middle-class professionals with large disposable incomes.

Alert-Ad™ allows the best brands and advertisers in the world to target this fertile, lucrative demographic very precisely. Advertisers can target ads to specific times of the day, for specific types of errors, to various regions in the world. For example, Microsoft could advertise the uptime of Windows Server 2008 to sysadmins receiving alerts about their Ubuntu servers going down. Another example: 5-Hour Energy could advertise their energy drink to sysadmins receiving alerts between 1am and 5am. The possibilities are endless.

Advertisers are already flocking to Alert-Ad™

We’re also very excited to announce that we’ve already signed up some really great brands onto the Alert-Ad™ network. We’re already working with Match.com, the leaders in online dating, Pfizer, makers of Viagra, and 5-hour Energy, makers of the 5-Hour Energy energy drink.

Here’s an actual Alert-Ad™ that was recently sent to one of our users (who was asleep at the time):

We can also include ads inside the PagerDuty SMS alerts. Here’s an SMS Alert-Ad™:

In conclusion, we’re very excited about the possibilities of our new Alert-Ad™ system as well as the now-free PagerDuty product. We have lots of other new and revolutionary ideas in the pipeline for other places we can place ads that cannot be ignored. Stay tuned!

Update: We’ve already gotten early feedback from PagerDuty users who are receiving the first Alert-Ad™ ads: they’d like an option to skip the ad and get to their critical alerts faster.

We are an agile company, so we’ve responded. For the low fee of $0.15 (a nickel and a dime), you can press star (*) on your phone’s keypad during a phone-call alert to listen to the ad at twice the speed.