Subscription & Ad Revenue Models on the Web: I Will Take Mine To Go

So there I was, having dinner at Shun Lee Palace on East 55th Street in New York with actor Robert Wagner, actress Heather Graham and publisher Ira Mayer. Bob was on his fourth Scotch rocks and Heather was up in arms over Beijing’s recent limitations on reincarnation. “How can they tell you how, when and where to reincarnate?! They are requiring monks to have prior permission! It’s madness!”

I had to change the subject since, apparently, in China they love Wagner’s old TV show, Hart to Hart, and Bob gets some good royalties from all that. I thought a rousing discussion of internet business models would shake things up, and Ira enthusiastically joined in.

“So, how do you know when to give away your content so you can generate enough traffic to support an ad revenue business?” I asked. “Everyone seems to be doing it.”

Surprisingly, Heather, who was scanning the menu for vegetarian fare, had a lot to say on the subject. “I think some content should be fee based, while other content has the legs for advertising,” she said, sneering at the Peking Duck.

Bob pointed to his empty Scotch glass with enough exaggeration so the waiter could see from 30 feet away, and said, “What the Hell are you talking about, Heather? These guys produce high-end, must-have content that their readers would die without. They need to squeeze every nickel out of them!”

“And someone needs to squeeze out a Tic Tac for you,” she said. “Look, all I am saying is it’s up to business people to work the numbers,” she sketched in the air, looking at Ira. “Did anyone ever tell you you look like Jimmy Caan?”

“No, Ira said, but I do occasionally steal silverware.”

“Huh?”

“Nevermind,” Ira said, “tell me more about this formula of yours.”

“Well, if you have a small but intense readership, say 500 or so, and they must have your content, then you’re probably looking at fee-based stuff. But if you have 20,000-50,000 readers and they really like your content but can live without it, then you have an ad model on your hands.”

I had to chime in. “But what if you gave away your content. How might you know that your free access wouldn’t draw three or four times the numbers on the Web, giving you the traffic you need? Then you would have an ad model, right.”

“Oh for crying out loud where is my Scotch!” Bob shouted.

“It’s in your hand,” Heather said.

Ira, normally calm as a house cat, became agitated and unsheathed his chopsticks (he brought his own). “I completely disagree, and can cite examples.”

“Well smell you.”

“Bob, please shut up,” Heather commanded. “Go ahead, Ira.”

“Thank you. Well, there are people with highly valuable must-have content and VERY small audiences . . . numbering in the hundreds . . . that have pure ad supported newsletters. Take Owen Taylor’s free California Garlic & Onion Report. It has had an advertiser for years and it doesn’t have a massive readership, as you might guess.”

“Ira,” Heather chimed in. “I was just talking to Owen and he said he dropped that report. Apparently the U.S. garlic industry was hit pretty hard by, coincidentally, Chinese garlic imports. I believe you’re talking about his cotton report, which has had the same advertising sponsor for 17 years! In fact, he has never sold a subscription. He just makes sure he finds the exact people sponsors want to reach, and then gives them info they can’t get anywhere else, and faster than anyone else.”

“Oh,” Ira said, “so it’s cotton, not garlic.”

“Speaking of which, you might try the Whole Sea Bass Braised in Hot Bean Sauce,” I suggested.

“What does that have to do with anything?” Bob spat.

“It’s roasted in garlic and scallions,” I said, looking at Heather for approval, which I didn’t get.

Ira kept going. “For a small publisher with a narrow but highly interested audience, getting ad revenue from someone who also wants to reach that niche can be meaningful. And getting a ton of traffic for free content as a result can drive sales of other services you might offer. So my point is . . .”

“You had a point?” Bob chimed in, earning a chilly stare from Heather, who picked up the point.

“Yes, Ira,” she said, “I agree, and like I was about to say an hour ago, it’s up to smart businessmen like you to test test test to see what will drive the best profits.”

“And sitting around talking about it won’t get the job done,” I said, contributing nothing at all of substance.

“Where the Hell have you been?” Bob said.

“I was sitting here the whole time,” I replied.

“You wouldn’t know it.”

“You need to test test test,” Heather repeated. “You need to bake in a different mix of personnel. I mean, you will need ad sales people, and I mean internet ad sales people. And you need to optimize the Hell out of your site. But since it’s free, you can always take it back! Also, if you have 20 products that have 500 readers each, you need to look at a way you can drive all those users through one place so you can create a funnel of traffic that would appeal to advertisers.”

“So you might have a hybrid model,” Ira said.

“Exactly,” Heather replied.

“Good gravy Marie are you people are boring!” Bob exclaimed. “I have talked to Cheese Doodles more interesting than you! Is this what you do all day? What do you say we get some Moo Shu and a couple dozen egg rolls to go and eat it on my boat?”

“NO!” we all said at once, and placed our orders.

Bob started with another Scotch, and bristled when they refused to bring him prime rib, so he sulked and ordered the Mandarin Steak, which he later admitted he loved, begrudgingly.

Heather had the Baby Eggplant, Szechuan style, of course.

Ira and I wanted the Beggar’s Chicken but they required 24 hours notice, so I ordered the Prawns on Banana Leaves, thinking the Chicken with Three Different Nuts was a little too on the nose.

Things went well until our entrees came and they accidentally gave Ira my prawns. Ira is deathly allergic to prawns. The EMTs were prompt and very nice. Heather gave them her autograph. Bob headed for the bar when Ira’s head achieved the circumference of a pumpkin. He is fine now but let me warn you, he is very touchy about Jack-O-Lantern jokes.

Editor’s note: I was hoping I wouldn’t have to say this, but our attorneys wanted me to make it clear that this is a work of fiction. "Any resemblance between these characters" and all that. Counsel thought it was misleading to make you think I knew famous people so I need to add the following statement: I have never met Ira Mayer. And Robert Wagoner is really a nice guy.

SIPA UK: Real Live Personal Relationships Remain Key to Business Success

LONDON – OK, so getting here was less than smooth. A flight delay had me amusing myself in Philadelphia International to well past midnight. I kept saying to myself: it could be worse; they could be asking me to listen to country music. Apparently I said this aloud. The person next to me was a Toby Keith fan. I changed seats.

Then I realized that Gatwick airport is about as far from my intended hotel as Philadelphia is from my intended hotel. But fortunately, the taxi driver made the long drive seem much . . . well . . . longer. Apparently he was uncomfortable with silence. Apparently he doesn’t have teenage daughters. Apparently sticking my head out the window only signaled to him that I wanted his views on cell phones, child rearing and Israel.

When I arrived at the Grange Holborn Hotel for the meeting, I figured I was all set. Nice place. Nice people. And a terrific minibar. I looked like someone who hadn't slept in 24 hours. Puffy, glassy eyes made me wonder about the question, "Do you need help with your bags?" Then I received this email from Andy McLaughlin, president of PaperClip: “Dude, you’re at the wrong hotel.” Indeed. I was at a Grange, but Grange City Hotel was the site of the conference. At this point I felt doing anything right was becoming less likely, and was certain that when I opened my suitcase I would find clown clothes.

The conference, once I cabbed it from the Grange to the Grange (apparently the Brits have the same affliction as the Yanks: we can only think of so many names to call things), I was greeted warmly and my presentation was received.

Here are some of my takeaways from other speakers, notes I jotted down between fatigue-induced fits of wanting to giggle or cry. A friend of mine said I was experiencing menopause. I found myself having trouble regulating my body temperature. This confirmed her diagnosis.

Alex Connock, CEO, Ten Alps plc. The guy buys companies. At least that was my impression. He came from a television background, and offered lots of fun pictures. OK, I was sitting in the back of the room with a seven-year old named Alex McLaughlin, a sunny-faced, spring-in-his-butt, iPod-wearing kid who had a terrific sense of humor. That is to say, he laughed at my jokes. His dad was the one who calls me “dude.” But Mr. Connock had some terrific insights and philosophies. In this phase of information creation and sharing and producing, “no one knows anything.” This was music to my ears. Finally, for the first time in my career, I feel like everyone has caught up with me. I have made a living out of not knowing anything. He had encouraging words for event developers: “Conferences are the sexiest sector of publishing. People want face to face meetings.” This was my first light bulb at the event (and by light bulb I mean "a learning moment"). In this age of virtual relationships and virtual everything, will all of us living our lives – both our first and our second – through computers, the basic tenants of business survive. I want to meet you, know you and, if I trust you, I want to do business with you. Connock put so much stock in this he said that a critical asset for the companies he buys is how well they understand their clients and can articulate their client relationships. Connock showed a number of internet TV, telly, or television channels his firm has created, signaling internet B2B television as something we all likely should, will or may want to consider developing. Like, for example, in the next ten minutes. The many images he had in his presentation were fun and stimulating. I, on the other hand, had a picture of a chimpanzee.

Speaking of primates, Phil Binkow, Financial Operations Networks LLC, took the theme of customer relationships another step further. He described during the course of launching his service that his firm interviewed 260 customers, with the interviewers applying an “enthusiasm rating.” He said audio programs, live events, certification services, etc., contributed to the community building in his market. It was during Phil’s presentation that I was in the throes of fatigue, fighting back tears and titters at the same time. No reflection on Phil’s content, more of a reflection on my own physical and mental limitations.

William Buist, Managing Director, Abelard Management Services and Coordinator, E-cademy Black Star members’ forum, is in the business of connecting business people. He sees his job as “helping people in the conversation.” The value in social networking he said is “what people say about you to people who don’t know you.” If what you offer is invaluable, people will say so. The Black Star service is a great example of what can only be described as premium social networking, where not just anyone can take part and join, which in itself makes me want to take part and join. Of course, letting me in will reduce my opinion of the service, but that’s a another story. It is a life members club, a group of like-minded individuals, that comes with a high price ticket. In the US we call that "being Republican." Buist stressed the importance of a vision for your community. Without it, the community is rudderless, I think he said.

Jem Stone, FM Portfolio Executive, BBC, surveyed the many blogs – the “too many” blogs – hosted by BBC. Stone was frank about the BBC’s efforts in this area, easily calling out what has worked and what hasn’t, and proudly sharing that BBC is not too proud to kill off a blog that isn’t doing well. His ability to be frank comes from the fact that a number blogs appear to be doing really, really well! He emphasized that creating good blogs and meaningful social networks is real work that requires real passion on the part of participants. He bristled at the comments of one blogger who, in his own blog, made the whole thing sound like obligatory shift work and a one-way chat with strangers. Bollocks! OK, he didn’t say that. I did. Just now. Must be the bangers and mash I had for breakfast? I just looked up the term, and apparently it's taboo. Really? Anyway . . . . Stone said the whole thing, the whole social networking thing, is not just creating a blog and walking away and hoping for the best. It’s a lot of work and the people who do it well actually care deeply about it. They don’t have to remember to file a blog entry, they are impelled to do so. He listed Technocrati and Bloglines as excellent tools for monitoring your firms in blogspace. I really liked one blog Stone illustrated. Rather than asking simply for a comment on blog entries, the invitation said “complain about this post.” Love it! He also said that if what you are creating is something like a discussion board, just don’t call it a blog.

Anthony Ray, Director, Stingray Research, said it is important to provide information that is extremely specific and has immediate and obvious value to the customer. He echoed the refrain about talking to your market and understanding their underlying motivations and emotions. “We talk to a lot of teachers,” he said. “Teachers want to feel in control. They gain emotional satisfaction when they feel in control. And they like to receive kudos.” His company helps meet those needs. He also felt what you call features is extremely important. “Don’t call it a chat room just because everyone else does,” he said. Or at least that’s what my notes say.

David Foster, president, Business Valuation Resources, LLC, had a lot of good stuff to say. I didn't write down any of it. He likes novels, for example. I was too busy trying to think of what I was going to say, or make my panel partner Jane Wilkinson, marketing director, Euromony Institutional Investor, laugh while David spoke. I glanced down at one point to see that Jane had written a few notes down about my presentation, “Shaking the Cushions for Coin: Finding Revenue in the Content Niches (pronounced “nitches”), but realized she was sitting where I was earlier in the day, and I had left my own speaker’s notes at the presenter’s table. I was admiring my own notes. David, please share with us a few insights here. You have many. And there is no need to mention my name and “animal eroticism” in the same presentation ever again. It was apparently misunderstood by many. When I got back to the Grange Holborn last night, there were three zebra having a smoke in my room saying they wanted a word with me. After a couple bottles of gin they calmed down. We even shared a few laughs. Exchanged email addresses. Promised to write, etc. Zebra are really jerks, by the way. I will no longer feel bad for them in documentaries about lions. Oh, I remember, David also recommended reading Wikinomics. I made a joke about downloading the audiobook, but accidentally purchased Wicca-nomics. Apparently jokes about making money from witchcraft just isn’t funny. Note to self.

PLEASE COMPLAIN ABOUT THIS POST.

Shaking the Cushions for Coin: A Preview of My Upcoming London Presentation

Here is advanced warning on some of what I will be discussing at the London SIPA meeting later this month.



SIPA UK Presentation
Tom Hagy
London June 2007


Title & Summary

Shaking The Cushions for Coin: Finding Revenue in the Content Cracks

• Developing High-Value Niche Content
• Leveraging the Information Lifecycle
• Slicing Content to Create New Products
• Driving Revenue through Repositioning & Improving Delivery

Biography

Tom Hagy is vice president at LexisNexis®, provider of Total Solutions for legal and corporate markets. Tom's role is to test and deliver new content solutions in often narrow market niches in alignment with customer needs and corresponding corporate initiatives. Starting out as a reporter covering legal topics in 1985, Tom moved from covering beats to helping decide what subjects customers needed his team to cover. Tom became managing editor and then publisher at Mealey Publications, which was acquired by LexisNexis®, a division of Reed-Elsevier, in 2000. Content responsibilities expanded beyond legal news to offering content in a variety of media. It is Tom’s role today to identify content solutions and deliver them in whatever media best suits the customer need. Content Tom has developed is delivered via online, email, podcast, RSS feeds, print, Web sites, and PDF, as well as via live events, Web cast and audio programs. He is editor of the SIPA U.S. blog. He served on the SIPA board of directors from 1998 to 2007, leaving his post as vice president to spend more time with his family. Tom lives with his wife and two teenage daughters in a suburb of Philadelphia. He continues to drum and watch way too much boxing. Don’t get him started.


Speaker Notes

Developing High-Value Niche Content

Gary Hoover, found of Hoover’s business information, recently said at the SIPA conference in Washington, DC that all the money is in the niches. He added that attendees should pay attention the word “specialized” in the name of our organization. He also said that everyone is looking but most are looking in all the wrong places. The concept of niche publishing, while not new to SIPA members, is worth revisiting just about every day. As companies grow they can become less satisfied with the revenues that a niche product might generate, or the time it takes to nurture a niche product and reap the rewards. Innovation guru Rosabeth Moss-Kanter said at another SIPA event recently that very few really big ideas started out that way. And yet, large companies tend to want new products that have the following attributes: guaranteed success, little investment, immediate returns, large revenues. There aren’t many great ideas that can meet those kinds of expectations.

Slicing Content to Create New Products

Thanks to technology, and thanks to the return of “content as king,” content creators can create products with little incremental investment. With the low investment can come an increase in the number of products you can offer. And with that, you can have “products,” or cuts of data that make very little revenue on their own, but when coupled with a number of other easy-to-create slices of data, start to add up. There may be a single large investment for you up front so your data are organized in a way that enables slicing into narrow offerings, but the investment will be a wise one if you have sufficient content. Once organized, not only can you offer slices, but you can offer them in a number of ways that satisfy the individual preferences of your readers. And, not only can you satisfy readers, you can use these slices to lure new readers.

What if a prospect comes to you with this statement: “I am generally interested in your subject area, but most of what you write is for a global audience, and my interest is just for what takes place where I live. Also, it’s often more information than I need. And, I don’t have much time during the day to read so I’d like to consume your data on my long train ride to work.”

Are you equipped to satisfy this prospect? Can you offer your data according to geography? What about the age of the reader and where they are in their career? What about their religion or race, or a fear or aspiration they have? What about a problem they are trying to solve or a task they are trying to perform? What about the lifestyle they lead? If you can carve data this way, you can create offerings that may not be big sellers in themselves, but add up in aggregate. Barry Parr of Jupiter Research, also speaking at SIPA’s recent conference, advised publishers to thing of content as data. I couldn’t agree more.


Leveraging the Information Lifecycle

Think of information, or its snooty cousin, knowledge, as something that evolves over time. We may wonder about the consequences of a potential change or event. Then, when that change or event becomes more of a possibility, we start to speculate, then when it looks like that change or event will actually transpire we start to anticipate and plan. Then when it happens we gather and absorb information, and then, as time passes and more context forms, we gain or seek an increasing understanding and clarity of what it means. Eventually the event or change becomes history, and from that we start to wonder what’s next.

Give thought to how you can serve your market along the way as ideas and information evolve and become more (or less) clear. A blog can be a great device for speculating, anticipating and gathering information, where a conference, or newsletter or book can be a great way to share a clearer understanding.

Conclusion

Finding and timing the right approach and vehicle – matched with the urgent and narrow needs of your market – is your challenge in finding coin in the cracks!

Forced Free Trial: Torture?

I am not sure this qualifies as valid customer feedback, but at least one alleged enemy combatant being held at Guantanamo Bay included the forced reading of a newsletter among the instruments of physical and mental torture he is enduring. Other devices included unscented deodorants and shampoos. Odd how I find myself agreeing with this guy.

I used to open subscriber mail and can tell you, this is tame.

Read the news as only Fox can tell it: http://www.foxnews.com/story/0,2933,272492,00.html

There was no mention of cream rinses or bath beads, but then, the enemy combatant isn't me.

New SIPA President Looks for Larger Footprint

Strafford Publications founder and president Richard Osoff has succeeded Oakstone Publications' Nancy McMeekin (at left, obviously) as SIPA president, pledging not only to attract new specialized information enterprises, but to inspire involvement from greater numbers of people working for today's member companies.

Nancy enthusiastically and intelligently managed SIPA through a major transformation, acting as much like a CEO as any of our presidents. "Her leadership and dedication were inspiring," this blogger said to himself with no one there. "Richard will take the next step of securing greater involvement," I added. Evoking the name of the legendary and, some say, mythological mega-ped Sasquatch, Richard wants to see the strength and relevance of SIPA's offerings encourage more participation more deeply in member organizations.

"For those people in our member companies who don't attend a major meeting, about all the contact they have with us is Hotline," Richard wrote after the meeting. "So that means the sense of benefiting from membership is pretty much limited to conference attendees, a small number active in chapters, and some listserv users. I'd like us to have a bit broader base of advocates within member firms . . . or at least a broader base of people whose contact with SIPA is more tangible, in hopes that they will perceive (and hopefully communicate internally) a sense that they benefit from their company's membership."

"Easy to say, hard to do," said Mr. Osoff, who has a full board of talent chomping at the bit to build on recent progress in branding and offerings -- including the highly successful "New Rules" Conference this month.

If you have ideas or want to participate in building a better SIPA, please get engaged! There are many ways. Just ask.

SIPA Clips on YouTube

Andy McLaughlin of PaperClip has a way of cornering you on your way to get your seventh Diet Coke to ask you any question he has on his mind at that moment. This is nothing new. But now he is carrying around recording equipment. If I have done this right, the link below will show you where Andy posted brief interviews with Helen Hoart, Margie Weiner, Bruce Guzowski, Robin Crumby and yours truly in the halls of the Mayflower during SIPA's national meeting this month, sharing what we think, learned, or what we say we think but really learned from someone else but won't say who. Or whom. Robin posted these on the U.K. site. Well, all but mine. This bothers me only because I went out of my way to wear my new Web 2.0 glasses. Unfortunately, I forgot to not shave.

http://www.youtube.com/profile?user=PaperClipComm

You will notice that the introduction to my clip is longer than anything I have to say. Interpret that how you like.

Tom

Google Is Your Friend & Needs Great Content

Here are my edited notes from the session that ended minutes ago during SIPA's "New Rules" Conference held here in DC. Please pardon typos, fragments, etc. Much of this is direct quoting, or as close as I could paraphrase. This is NOT a transcript. Mr. Madden was a forthcoming and articulate speaker. --Tom Hagy

Andrew Madden
Strategic Partnership Development
Google
amadden@google.com


Google is your friend . . . I am here to speak about how to improve your visibility on Google. We want to communicate directly with content partners.

“Our mission is to organize the world’s information and make it universally accessible and useful.” We are increasingly focused on offline content, so we can get access to it; this tends to be a pretty easy job as content owners see they are getting crawled and indexed. At first, we crawled what was available online. Since Google was founded about 10 years ago, we have seen dramatic change in the kinds of content we crawl and index, and kinds of content users are seeking. Users used to be satisfied with whatever was out there on sites, now they want biographies and documentaries. They want local and mapping information. These are the content types we have had to integrate. We are bringing books online to make them discoverable online online. We see the impact of video online is huge. We are unsure of what the next big innovation will be . . . .

The three key components of the Google business model. Users. Content. Advertisers. Users are the most important. “Google is not interested in being a content creator. We want to drive users to content creators. If a content creator wants to work with an advertiser we want to support that as well.” . . . .

The Internet highlighted the untapped potential on both the content and advertising side to reach smaller companies versus the large media companies and advertisers. It’s the “long tail.” “People are searching for everything. And Google helps content owners move down the tail.” Popular searches like "Harry Potter" are huge, but people also are searching "Peruvian Orchids" or "Jersey City." We won’t sell directly to you, but we will send you to Amazon or Borders . . . .

Now I will mention a few of our products "where we actually make money."

Key-word advertising. We are making an educated guess about what you are looking for as a searcher. We also offer ads in a syndicated format, so there are ads positioned on AOL and other sites. With syndicated content ads we load in contextually relevant links based on the content on a given page. See AdSense for Content. It is fully automated and fully self service . . . .

Improving Visibility on Google.com. The Google News Archive Search pulls from archival content. It is introduced as an index you’d find on Google News. Users can now take a deeper dive. They can refine searches by date and publication, or cluster results for similar topics.

If you, as a publisher, have paid content and the user hits the wall to register, our crawlier hits that same wall. Our crawlers are good but can’t get behind this. “With News Archive Search, we want full access to content behind the pay wall, driving more traffic. We kept advertising out of the mix for this relationship.” Good landing pages [e.g. with content] are great, bad pages [e.g. with walls] are death.

“To crawl firewall content some of it has to sit on our servers. We enter an agreement with providers to take the content down at anytime.”

We have dollar signs and amounts in search snippets. We give user the ability to make a decision to purchase. “User experience is important to us. If content is not labeled premium, and it is, they turn away from the bad experience.”

First Click Free. With this service the publisher let’s us in to full access to their content, so a Google searcher can intersect with fee content. “The searcher gets to consume the full text of one article. Once moving beyond that they hit the pay wall. Once in they can consume other content. Good for publishers who want to use teaser content or sell subscriptions. For news providers with a lot of content being posted throughout the day, it is a pretty compelling way to get people to your content.”

Another way is to use Google Web Master Tools. Submit a site map, inventory of site, add it to Google index. We know when you make updates. We can tell you what might be wrong with a page. We can provide detailed data. Help you to diagnose problems. Tell you which queries are most popular. We can do a much better job of accessing your site. It is simple to use. Powerful. Tells you what pages have errors, what pages are not found, which are blocking crawlers, timing out, or not reachable. Stuff publishers tend not to know. You can take down documents. Good self-service way to get Google to know what you are doing. Great for mobile devices. Provides a great way for content partners to push their content to us.

You can create shortcuts to content if you are a provider. iGoogle. For people with Google account. You can build modules around what is of interest to you. Personalized home page content modules. Same for toolbar.

Google Co-op helps users tailor their experience. Same for search. Some like broad general results. If you search Angelina Jolie, you can pick a source to appear first, e.g. People Magazine. I can subscribe to people.com. “When I get a search, having subscribed, those results appear at top of my search results.”

Custom search engine. Tailoring search results at your site, e.g. www.jumpup.com, from Intuit. There you see top business resources. Google custom search engine across a set of sources. Helps build community at site. Offers a better search experience. Highly targeted search engines can be assembled by your editors focusing on the URLs you want to focus on.

“The power of Google is the sources it searches.”


Question from this blogger: What prevents people from moving to the next hot search engine?

Answer: That is the fundamental question that we face at Google. How to keep people coming back. It is through content partnerships. Getting access to content that others can’t get access to. Something like archive searches. We look to hundreds of partners to allow us to use this content. What you can’t get elsewhere, like maps, YouTube . . . What we can add to our corpus of content that we can surface. Add more trusted, more respected, more useful content.