Mar 19 2006
Lesson Learned from the Internet
If you have ever built an online website for your community or business, you know the economics of such ventures are simply not there. First of all, building traffic to a local portal is difficult and discouraging at the same time. While you may have statistically 10% of the town visiting your website, you are still selling thousands of page views which has a market value of maybe $10 per month. And then there is the issue of content updates. The thrill of updating your website daily with the latest and greatest news wears off quickly when your traffic is plateaued.
I learned this lesson all too well in the dot com boom of the late 90’s. My “local portal” was generating millions of page views per month to a very targeted user (broadband users looking for online videos and audio), but we still couldn’t sell our inventory. Trade outs, you bet. Partners paying us cash for visibility, no way.
Then, in early 2000, we started a small publication called the “Channelseek Guide”. It was only about 8″ x 4″ laid flat and 16 pages of full color that was designed as a bill stuffer for broadband providers like Sprint, Comcast, and Road Runner. Our deal with them was simple: we provide the Guides for free, you mail them to your customers with your ad on the back page. For our first issue, we had 100,000 ordered from our partners. With this print real estate, we packaged the print advertising with the online advertising and voila…we had sales!
Our premiere issue generated just over $38,000 in revenue, of which we only paid about $10,000 for printing and production. Remember, the mailing costs were all paid by the partner in exchange for the back cover. This little business model worked, and now our online ads had a value to customers giving them a holistic advertising package of value.
Today, I’ve taken this same idea of bundling online advertising with offline advertising and made the model work again. I’m paying the distribution costs this time, but the economies are still there. A tip for all those local web portal developers out there trying to make a dime with your online ads: develop an offline advertising vehicle that people will pay for and bundle it with your online ads. Local newspapers are afraid of doing this, it diminishes their print advertising revenues (which are their lifeblood).
