The members forum of the web advertising service I use for a couple of my sites, BurstMedia has been awash lately with people complaining about declining revenues from ad sales. Over the past few months the number of straight CPM advertising has declined while the cost per click adding has increased and total ad inventory has dropped sharply. For example, on one site I run, there were almost 2,000 page views on Sunday, January 7, but only 480 ads were actually shown.
Talking with some of the less knee jerk people in this situation, however, this is an across-the-board problem rather than being specific to Burst. Given the dot.com shakeout and falling tech stock prices, that shouldn’t be too surprising. In fact, last year I was kind of surprised by how much dot.coms were paying for advertising campaigns that to my mind seemed inept at best.
At one point, for example, the now defunct Pets.Com paid a lot of money to run several thousand banner ads on AnimalRights.Net. About half of the ads were plugging a Pets.Com special on dog and cat food. I took the money but I was very skeptical that anyone wanted to buy pet food online, which turned out to be correct. That ad campaign garnered one or two clickthroughs at most.
So how do you make money as a small content provider on the Internet? Beats me. I have some ideas (i.e., I know what I would pay for), but I haven’t really thought about them systematically.
One thing I’ve noticed is that a lot of people seem to focus on the price of the content rather than the quality. Scott Adams has an interesting edition of his I Can’t Stop Thinking where he notes that it would be better for both consumers and producers of comic books to cut out all of the middle men and sell comic art directly on the Internet, in this case with micropayments.
I think micropayments are really a dead end, especially for the sort of content Adams is producing, comic books. Comic books are a great example, however, of something I think could thrive on a subscription model. Have you visited your local comic book store lately? If you’re a Batman fanatic, for example, you’ve got to buy half a dozen or more comic books just to keep up. And if you want to read that one issue of Batman published in 1952? Forget about it unless you’re willing to spend a significant amount of money.
But the kicker is that Batman’s publisher, DC Comics, makes no money off of that 1952 issue. Why not put every single Batman comic ever published online, set a subscription fee (with different packages to give people options), and couple it with other features, charge a reasonable price, and I’d wager DC would make a killing
I also think Adams’ emphasis on price competition is misplaced. Certainly one way for web content producers to compete with real world producers is to be cutthroat on prices. But another way is to offer consumers an experience that can’t really replicated in the offline world. The reason it is stupid to charge $20 for an e-book version of a Stephen King novel that costs say $25 in hardcover is that the way e-books are set up now, consumers are actually getting far less value for their $20 with the e-book version than they are for the $25 paper version of the novel. In that respect, large content publishers seem to be replicating with e-books what happened with the early days of CD-ROMs where many companies pushed so-called “shovelware” out the door to make a fast buck.