NONE: Re: ONLINE-ADS>> The math just doesn't work...Or does it?
Re: ONLINE-ADS>> The math just doesn't work...Or does it?
Benjamin Fitts (benjaminf_at_soccerindex.com)
Sat, 30 May 1998 18:17:30 -0400
Kim Brooks wrote:
>I'm glad to see a frank discussion of the real math at work on the web.
>I've talked to more and more netizens, designers, producers, etc who are
>growing disillusioned with the Net Utopia of "free publishing." Maybe
>through this type of soul-searching, cynicism and discussion, a new model
>will appear? Or maybe the big guys will continue to get bigger, and the
>web will just turn into another AOL?
Dan Cornish wrote:
>It is my opinion that just banners ads will never really cut it for
>small sites.
In 1996 I went to work for a competitor of Physicians' Online.
Our company at the time was using a subscription based model with no
advertising to compete against the free Physicians' Online which was
supported by advertising. Our "ace card" was our original content. We
were able to use the same model as many online marketing magazines, getting
physicians to donate artciles at very little cost in order to gain extra
recognition from their efforts. Unfortunately the subscription model was
by itself not the best model for our site. Our company at the time was
making something like $5,000 a month in subscription fees. My salary and
benefits were worth more than that.
Within a year I was able to help them move to a new revenue model:
licensing our content to other web sites. We found many companies in need
of original content for their web site. One company (I don't remember the
company so don't ask) sold over US $100,000 of advertising before they even
had a web site to place the advertising on. Needless to say they were very
anxious to license our content.
Our subscriptions grew but more importantly our software licenses outpaced
our subscriptions. When I moved on 9 months later, they were making
something like $45,000 a month from licenses, and subscriptions. Needless
to say they had begun to overcome that barrier and actually make a small
profit from their web site. Fortunately for me they thought they could
keep paying me next to nothing so I went out and got a nice big raise to
leave the company. ;)
I think this is a good example of how even utilizing a second revenue
stream can help make a company successful.
About Me: I've been lurking on this list for a few weeks. I'm a technical
webmaster who is in the process of founding a new niche banner
exchange/network. I'll let you know more before we make our official press
release.
Regards,
Benjamin Fitts
benjaminf_at_soccerindex.com
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