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?
Mark Montgomery (markm_at_gwin.net)
Sat, 23 May 1998 10:50:37 +0000
Nearly two years ago a couple of subscribers
to one of our publications approached me about our
shop the web campaign saying that they could
make me famous if I would just give more
expensive stuff away for free. I said be more specific
and we went around and around. Two of these are
"expert consultants" charging "$1000" per day. I've
gotten that much a time or two but trust me it
was far better strategy that what was offered me.
We have many non-paid contributing authors
of the highest caliber, including myself, and
we have very high, no, extremely high demographics.
CEOs from many countries, fortune 500, 100, 50, 5,
professors, entrepreneurs, etc.
We've discussed this issue many times in our
Net_Business forum and we've analyzed it to death.
The problem with the advertising models to date
on the Web is that most are in opposition to the
medium's strengths. Niche means small numbers
but much higher value. There you have it. The
higher value we produce, the more specialized the
content, the fewer readers.
For example, we've published reports every bit
as valuable as any in the world and we know
some have helped shape strategies of the richest
companies in the world and even international
policy.
We've tested subscriptions successfully but the
problem now is the cost of promotion on the
Web. Ironically the low revenue from advertising
for a content provider on one hand is ridiculous,
and from an advertiser's perspective, we pay too
much based on results (in previous tests).
If your really think about it, that's what happened
to free TV in developing content for the masses,
broader markets, less value, more money. The
chief difference is that in free TV, three networks
controlled the supply side and could therefore
negotiate very tough on demand and also deliver
results (for broad brands).
Having people contribute is nice but there is no
short supply of "famous" writers on the Web, nor
is there a short supply of people that have given
there all and paid for the privilege. Frankly any
ad rep that thinks 1,000 views from the world's
chief decision makers with billions in purchasing
power is worth $30 or even $50 is not worth
my time.
We developed a comprehensive model to address
these issues. It took a year and has evolved from
there but we couldn't get funding. Why? Primarily
because those who fund the VCs are competitors,
many of whom are heavily invested in traditional
media. Now we are self funded and planning a
small corporate offering later this year.
The only logical path is a combination of subscriptions
and advertising with other revenue sharing if and when
appropriate. It will also require publishers to work
together in a very similar fashion as the competition,
i.e. networks designed for the user.
Having contributors offer their most valuable intellectual
property for free is the norm, but it's not the answer.
Expecially in situations where it only empowers those
who are best able to afford to pay and often the only
ones in a position to make use of the information.
Mark Montgomery
CEO/Publisher
Global Web Interactive Network LLC
http://gwin.net
http://gwin.net/convergencezone.htm
http://gwin.net/latestnews.htm
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