NONE: ONLINE-ADS>> Peter Bull's Wonderfully Interesting Idea
ONLINE-ADS>> Peter Bull's Wonderfully Interesting Idea
Mark Gross (markgross_at_mindspring.com)
Fri, 5 Dec 1997 10:11:05 -0500
This post is in response to Peter Bull's proposal that a local
intermediary can give free interent access to consumers in
exchange of their using its proprietary brower. This
intermediary can then sell local ads and serve them to its user
base regardless of the web site the user is visiting.20
If we ignore the red herring (appologies to the great magazine)
of stripping ads out of sites, this is a great idea, and one that
can be improved on. Most web sites have a huge, unfilled, ad
capacities. Imagine getting an email from a credible source that
said something like this:
"Congratulations! Because one of our subscribers visited your
site, we have credited your account $0.01! One cent? Big deal?
Could be, because everytime one of our subscribers visits your
site, we'll credit you $0.01! What do you have do to do?
Nothing at all, just keep producing a great product and
attracting our customers."
"You see, we offer free web access to customers in our local
trading area. Subscribers use a special browser that serves up
local ads each time they visit a site. This browser does not
interfere with your site, or impact your ability to sell the same
traffic to other advertisers."
"We hope you appreciate the additional revenue stream. Rather
than send you a check for one cent, we'll wait till it reaches
$50. Want to get their faster? Help us sell others users our
service. It's simple--just run our banners for free on your
site. Only a small portion of your traffic comes from our
trading area, but those that do will appreciate the gesture."
"Thanks again, and keep up the good work!"
What a great win-win.
Now, the challenge for Master Bull remain quite daunting:
1. Technology. Quite tricky, though I have to believe that he
thinks he's got it licked, and it will take any erstwhile
competitors a while to catch up. Why do I think so? Because he
promoted the idea in this forum. What better way to establish
credibility for himself, his service, and ultimately, his
technology that he likely would love to sell or license to
others.
2. Economics. Forget about the model above, where I split a $20
cpm with the web publisher. Let's say Mr Bull keeps it all.
Under this model, the operating costs are going to be far greater
than a typical ISP--Mr. Bull has to support a large advertising
sales effort in addition to soliciting and servicing subscribers.
I don't have any exact figures here (help anyone), but lets say
in a large metro (it'd have to be large for this to work), it
costs $5,000,000 a year to run this business. To breakeven, at a
$20 cpm, keeping all the money, Mr Bull needs to serve
250,000,000 ads a year. That's 4,800,000 ads a week. If the
average user looks at 40 pages a week, every week of the year, he
needs 120,000 customers to break even. If he shares revenue, he
could need as much as twice as many.
That's a lot of subscribers in a local market area. I'm director
of new media strategies for Cowles Media Company. We publish the
Minneapolis Star Tribune. Minneapolis-St Paul is a pretty big
metro, with well over a million households. It's possible that a
free ISP service from a credible party (like the newspaper) would
attract that many users, but it'd be a fight. And that's just to
break even.
3. Future issues. Web interfaces are changing rapidly. It's
quite possible that the WebTV, or the _at_home model end up
resembling this idea. To be successful, the intermediary would
have to deal with all sorts of new competition and changes in
technology. The browser itself might be a dead metaphor once it
is fully integrated into Windows anyway. Who knows!
This is an intruiging experiment, and I'm anticipating more
reports on its progress in the future.
Mark Gross
Director, New Media Strategies
Cowles Media Company
markgross_at_mindspring.com
(soon to be president, Imagine Digital--a division of Imagine Media).
----------------------------------------------------------------------
This week's Online Advertising Discussion List sponsors:
Hotmail, Web Ad '98, and Infoseek.
A NO RISK MEDIA OFFER? Buy 100,000 impressions on Hotmail targeted
to your demographic. We'll credit the full cost on your next buy.
Find out more at http://www.hotmail.com/offer.html
----
Find out how to make web ads _work_.
Web Advertising '98: How to Bring the World to Your Web Site.
http://www.thunderlizard.com/webad.html?OLAspnWAT1
----
When it comes to ad performance, not all search engines are equal.
Infoseek gives you solid reporting and highly targeted placement.
(And we return calls, too.) http://info.infoseek.com/doc/sponsors.html
-----------------------------------------------------------------------
Online Advertising Discussion List To Unsubscribe send UNSUBSCRIBE
http://www.o-a.com/ to online-ads-request_at_o-a.com
