How should VerSe Innovation balance increasing ad revenue on Josh with maintaining user experience and engagement?

Introduction

Balancing ad revenue with user experience on Josh is a critical trade-off for VerSe Innovation. This scenario involves optimizing monetization while maintaining user engagement on a short-form video platform. I'll analyze this trade-off by examining the product ecosystem, identifying key metrics, designing experiments, and providing a strategic recommendation.

Step 1

Clarifying Questions (3 minutes)

• Business Context: I'm thinking Josh's revenue model heavily relies on advertising. Could you confirm the current revenue split between ads and other sources, like in-app purchases or subscriptions?

Why it matters: Helps understand the importance of ad revenue and potential for diversification Expected answer: 80-90% from ads, minimal other sources Impact on approach: High ad dependence would necessitate careful balancing with user experience

• User Impact: Based on industry trends, I assume Gen Z is a key demographic for Josh. Can you share the age distribution of our most engaged users?

Why it matters: Different age groups may have varying ad tolerance levels Expected answer: 60-70% users between 16-24 years old Impact on approach: Would influence ad formats and frequency to match younger users' preferences

• Technical Feasibility: I'm curious about our current ad load capabilities. What's the maximum number of ads we can serve per minute of video content?

Why it matters: Determines the upper limit of ad inventory Expected answer: Current capability is 1 ad per 2-3 minutes of content Impact on approach: Would inform potential for incremental ad increases vs. need for technical upgrades

• Resource Allocation: Considering the importance of this initiative, I'm wondering about our team's capacity. How many engineers and product managers can we dedicate to optimizing ad experience?

Why it matters: Affects the scope and timeline of potential solutions Expected answer: 2-3 PMs and 5-7 engineers available Impact on approach: Would influence the complexity and number of experiments we can run simultaneously

• Timeline Pressure: Given the focus on increasing ad revenue, I'm assuming there's some urgency. What's our target timeline for implementing changes?

Why it matters: Impacts the depth of analysis and experimentation we can conduct Expected answer: Aiming for significant improvements within next quarter Impact on approach: Would prioritize quick wins while planning for longer-term optimizations