Advertising in online game lobby

[zppz]

Hi.
Very early days yet, but the game I am developing will be online only. After logging in, players will start at a lobby screen where they can chat to other players, and create/join games (like Blizzard battlenet). This will require a full-time server which of course I don't intend to keep paying for myself. Initially I thought about maybe trying to sustain it from donations, but that seems kinda tacky and I'd much rather have people playing for free. Seeing the built-in banner of the Opera web browser made me think about having some kind of advertising in the lobby screen. If the game is completely free the user base should grow well, and the steadier funding may even turn a profit. Also if the players never pay anything I am not obliged to keep a server up indefinitely.
There are a few issues which would differentiate this from typical web advertising though, the main one being what to do when the ad is clicked on. Exit fullscreen mode and open a browser right away? Open browser under the fullscreen game window to be viewed later? Force the lobby screen to run windowed to avoid this issue? Since users will likely be continuously looking at the same 'page' (the lobby screen) for long periods, I guess the ads would have to reload on their own at timed intervals. Maybe could price ads per time displayed? For an interesting touch, if Google AdSense text ads could be worked in to the program, they could take keywords from the current chat contents.
The actual gameplay itself is for 2 or 4 players and will take around 10 minutes, after which players will be returned to the lobby screen again. I'm aiming for the broadest possible demographic, with a Mario inspired feel.
Does anyone here have experience selling advertising? I realise this scheme isn't the typical indie paradigm, but I would be interested to hear any comments...

[terin]

Not a good model. It's been tried by many companies. The fact is this: When dealing with a confined set of viewers it is not the number of impressions that counts anymore, it is the number of viewers. This makes it wildly less profitable for advertisers. To make matters worse unless you have an extraordinary churn rate getting repeat business is nearly impossible (no need to re-advertise to the same people).

So what you end up with are sub-par rates and less return business EVEN if it made them a profit.

Even if your game had 10,000 active players you couldn't charge too much for an ad. If I had to price-tag it I would say about 5 cents per active player is all you could get. That would be 500 dollars for a month of ad space.... and getting 10,000 active players is nothing short of "damn hard." Even for a free game.

If you plan on this I suggest a CPC model actually: It will get you more repeat business.
-Joe

[zppz]

Thanks Joe. I didn't consider the 'repeat business' angle. Actually I originally wasn't thinking of doing it to earn money at all, rather just to cover operating costs. In which case sub-par rates might be ok, but if repeat business is low then it would probably suck up too much time finding new business to make it worthwhile. I'm not looking to live off this, I just want a reasonably reliable trickle of funding to save me from propping it up all the time. CPC does sound better in that case I guess.
Is the donations idea tacky or am I paranoid? I have heard of a couple of online games that do it.