Re: Advertising is Alive and Well, but how are the Marketers??!!

From: Tom Campbell <tom_ada_at_earthlink.net>
Date: Mon 07 May 2001 13:33:31 -0500

FLOYD WILLIAMS <floyd_at_music.com> WROTE:

> Online Advertising is dead, then why are
> there still some sites doing so well? Is it sheer luck
> or just that they have the right business model, the
> right technology and the right niche?

I've been thinking about that myself. It's a life-or-
death issue for my site, eSnipe.com, which is about to
start charging. Executive summary: They're all either
popular but in iffy financial circumstances or they
charge somehow. Think about it:

* AOL charges, and they also run ads. So ads are gravy
to them.
* MSN charges, and it has ads, and it's also supported
by that gigantic software company in Redmond. MSNBC is
popular, but I bet it doesn't pay for itself. Not
even close.
* AltaVista just laid off a bunch of people.
* Ditto with Yahoo.
* eBay is very healthy, but pays for itself through
seller fees, and they have occasional ads (mostly but
not always internal)
* I just read Google has 8,000 computers and 5, soon to
be 4, data centers. I refuse to believe they're turning
a profit.
* Salon is apparently turning to porn--ah, adult
entertainment--as its upsell, or is that a hoax?
* And you of all people know what's happening with
Napster

So I'm not sure I agree with your premise. I think most
of the popular sites are overstaffed, and will not be
able to sustain themselves.

People use my site to win $100 million in auctions on
eBay. (Another $100 million in bids don't win.) I plan
to charge a maximum of 1% of the winning amount (no
charge if they don't win), with a cap of $10. I have
invested huge sums in the site but it's run by 2 people
full time. I am one of those people. I do tech support
myself, with two toddlers in the rec room with me. I am
currently unpaid. I expect to lose 80% of my business
when I start to charge. So instead of $1 million a
year, I expect to see maybe $180,000. (60% of the bids
placed will be under $25 and we won't charge for them.)
I am slowly, slowly learning about selling ads for my
site directly, and am slogging through Marketing 101
myself--sending press releases, posting on
messageboards, etc.

I believe the future is in sites that do what I'm
trying to do:
* Give lots of good content (or in my case, services)
for free
* Have better stuff for a modest price
* Automate everything & keep staff very modest

Tom Campbell



Received on Mon May 07 2001 - 13:33:31 CDT