NONE: Re: A money-making web site (was: Cost/Audience Comparisons)
Re: A money-making web site (was: Cost/Audience Comparisons)
erik kraft (erik_at_ensuing.com)
Mon, 22 Jul 96 13:58:38 -0700
On Mon, 22 Jul 1996, cliff.kurtzman_at_tenagra.com (Cliff Kurtzman) wrote:
>
>erik kraft <erik_at_ensuing.com> writes:
>>
>>I seriously doubt that any, *any* professional site is making money. Almost
>>everyone seems to be trying to capture mindshare for some later event which
>>will let them make money, a lot of money.
>
>It is probably true that it is the exception rather than the rule for sites
>that base their revenues on direct sales, subscription, or web site
>advertising are making a profit, but it is hardly the case that there are
>not any good examples or success stories.
>
>I suppose it depends on how you define "serious." Certainly I have
>connections with a number of web sites that are considered serious revenue
>generators by their owners. Just a few:
>
>Our client Harley-Davidson of Stamford <http://www.hd-stamford.com/>
>consistently tells us that they bring in profits from direct sales that
>exceed the costs of maintaining the web site. See
><http://owi.com/netvalue/v1i2c1.html> for a case study.
>
>Our client RW Lynch <http://www.rwlynch.com> is a services oriented
>business that tells us they generate new clients from their site for a net
>profit.
Both of these are pre-selling. Their web site is a vehicle to attracting new
customers, not for direct sales.
The point I was trying to make was that this type (pre-selling,
self-promotion, or online-brochure) is the only type of web site that seems to
be working. The sites that are trying to make money from advertising dollars
aren't working too well.
>Tennis Warehouse <http://www.tennis-warehouse.com/> advertises their web
>site on one of our web sites, and generates significant revenues from the
>endeavour. See <http://www.inc.com/incmagazine/archives/01960932.html> for
>a case study in Inc. Magazine.
Again, Tennis Warehouse may be making money, but is the company that is
hosting their on-line ad?
I read the article. Basically it states that Tennis Warehouse has realized a
savings using electronic catalogs over printed material. While that is a
good thing, it isn't in the scope of the issue at hand, making money as a
vehicle for advertisement.
>And, as I have mentioned here previously, the Year 2000 web site
><http://www.year2000.com/> (of which we are a co-owner) is a significant
>commercial success based on revenue that is generated solely based on
>advertising on the site. Advertising revenues exceed the costs of content
>generation, site hosting, and site marketing.
Year2000.com is new to me. I will check it out further.
>I'd be surprised if anyone gives you information at this level of detail.
>As you can imagine, this sort of data is highly proprietary. It is enough
>of a risk for them to talk about their successes even in general terms. I
>believe that the PR value of being a success story exceeds the risk of
>imitators trying to grab a portion of their market share, but there is no
>certainty of that fact.
I doubt this. Most of the web and internet companies are either public or
trying to go public. This requires a certain amount of financial disclosure.
It is also common for companies to investigate the financial solidity of
other companies they will be doing business with.
>Another good place to start looking for success stories is at the annual
>Tenagra Awards for Internet Marketing Excellence,
><http://www.tenagra.com/awards.html>. I seem to recall that Donna Hoffman
>has some good pointers in the papers on her site as well.
Tenagra awards are for marketing excellence. Again, the winners are mostly
people running a site that is for their own self-promotion. The sites they
listed are good, but only Yahoo seemed to be in the business of selling ad
space.
---
erik kraft
erik_at_ensuing.com [ NeXTMail and MIME okay ]
