By: Steve Outing As online news publishers continue to fret about money and devise new ways to make it, there are a couple of techniques that remain under-utilized by mainstream e-publishers:
1. Monetizing departing Web site users.
2. The "shareware" model for content.
For this column, let's look at these models for raising badly needed additional revenues for news sites.
Goodbye, and thanks for the cash
The adult content industry has realized for some time that there's money to be made even from those people who visit a site and don't find what they want. Many an adult site carries ads for other sex-related sites. Free-content sex sites, in particular, beg their visitors to go to other pornography sites -- and they get paid for the referrals.
Mainstream online publishers haven't embraced this concept. The typical news site operates like a print publication: When the Web user is on the site, she'll see banner, pop-up, and text advertisements while perusing the site's content, just as a newspaper reader sees ads that accompany printed content. When the user is finished with the site, she clicks off somewhere else and vanishes -- most likely not sending a cent the site owner's way (except through generating ad impressions, which translates into a tiny amount of money). Probably 98% of any site's visitors are not "monetized" -- but they could be.
Doesn't it make sense to show departing site visitors other sites or commercial offerings? As they leave your site, you recommend to them something else that they might be interested in -- and you earn some referral money in the process.
Beginnings ...
I recently came across a Swedish company that understands this concept and is building a system to assist Web sites in picking up revenues from departing users. It's called ClusterTraffic, a service of Lemonbox AB.
ClusterTraffic represents the start of a concept that I think can be very powerful. What the company does is set up "clusters" of Web sites on various topics, and each site within the cluster adds a few scripts to its pages in order to participate.
When a user leaves a participating site (by clicking off to some other content not on the site), a new browser window will appear for another related site. For instance, a user who's finished reading content on ESPN.com might upon departing see a new window for another sports content site. (The content the user intended to see by clicking or typing in a new URL would be in a main browser window, underneath the referral site window.)
The idea, according to Lemonbox founder and CEO Jonas Hollander, is to make the referrals intelligent and infrequent enough so that they're not annoying. The user who clicks off a baseball site, for instance, would be referred to other sites that might logically interest him. And the default is for a referral window to appear not more than once every 30 minutes -- so that a Web site user who clicks off a site but then comes back won't keep getting new referral windows.
Hollander says his company is currently putting together clusters on various topics, and sites within those topic areas can participate for a fee. ClusterTraffic gets U.S. $.07 per referral as its fee for hosting the service (with rates going down for higher volumes). Various revenue models can be established. But the core concept is that the sites that refer customers to other sites get paid -- either cash per referral (after the ClusterTraffic fee is taken), or in getting a new customer in return (that is, the referring site gets credit for the referral and other sites in the cluster refer their customers to it).
The company also creates "private clusters," where a group of sites participates and wants a third party to host and manage the service. "We facilitate a trade between related Web sites," says Hollander. "We make it possible and that's what we charge for."
To understand how this can relate to news publishing, consider a private cluster for a Swedish publishing house that publishes two computer gaming magazines. Lemonbox is putting together a cluster that includes the Web sites of those publications plus game producers and online game retailers. The publishers get additional online readers as the game retailers and producers refer new customers to them; the retailers and producers get more potential buyers from the magazine's Web readers.
Hollander is currently seeking publishers who operate in a niche who wish to try out the concept. "We desperately need a good reference case in the U.S.," he says.
Looking ahead
While ClusterTraffic is focused for now on creating clusters, the greater promise is further out -- making the technology work to identify site visitors' interests and then referring them to relevant advertisers and e-commerce sites, not just to other related content sites. Sites that require user registration and know a bit about their visitors, for example, can send departing visitors to appropriate vendors where they might spend money.
For instance, a reader of an opinion piece on The New York Times Web site might be referred to a subscription offer for Harper's magazine. A visitor to the World Series site of a newspaper might be referred to an online sports retailer's World Series memorabilia page. Hollander says that the way that ClusterTraffic is currently configured, that's not possible, but his technology is capable of it -- and that's a future direction of the company.
Where this will take us is increasing sophistication. Future exit-referral systems should be able to identify what a Web site user was reading and analyze her demographic profile, then refer her to a contextually relevant third-party site. For instance, the newspaper Web reader of an article on stocks might upon exiting be referred to an online stock broker's promotional offering. The sophisticated form of this concept would also know that the user was a 45-year-old male and tailor the referral content to him.
Lemonbox isn't the only company tackling Web-exit ads. A U.S. company called Exit Exchange has created an exit-ad network, in which participating Web sites include code on their sites that creates an ad in an additional browser window of those people who view the site. The ads from the Exit Exchange network don't get seen until the user closes the main browser window, since the ad window is created in the background. This technique is less intrusive than pop-up ads or schemes like ClusterTraffic, which bring the ads to the front of a user's screen whether they like it or not.
The ExitExchange revenue model is that for every two unique user exits that your site records, ExitExchange gives you one exposure. The other exposure is sold to advertisers.
Think 'shareware'
The other model that online publishers haven't embraced yet is "shareware." We're all familiar with shareware computer software, where developers offer their programs to the world and request that users of the software send them money. If a computer user wants to take the software and not pay, there's nothing to stop him -- except guilt. Payments are voluntary, but strongly urged.
The same concept can be applied to online content. The content shareware model sits in between giving content away for free and demanding a subscription fee. During this period of online content industry upheaval -- when many content sites are faced with the decision of shutting down or starting to charge for content -- content shareware represents a compromise position.
Many content publishers are scared of starting to charge for content that they have been giving away free. Users likely will rebel, and it's highly likely that only a small percentage of the existing user base will pony up the money for a paid subscription.
The shareware approach eliminates these risks. The idea is that you tell users of your content that you have begun requesting an up-front, voluntary subscription fee. If they balk at paying, they can still get your content -- so there's not the problem of mandatory fees wiping out most of your user base. Your audience numbers can stay high and thus retain appeal to advertisers, but you'll also be bringing in some subscription revenues.
This technique is also preferable to asking for money for content that has been given away free. The "pledge drive" approach to fund-raising generally meets with little success, and can cause a user backlash.
Consider using the shareware approach with e-mail content services. Instead of giving it away, explain to new subscribers that the service costs money -- but it is not mandatory that it be paid.
Before stepping boldly into the unknown of paid mandatory subscriptions for online content, consider this compromise alternative.
(Thanks to Penny Cherubino, who got me thinking about this concept and how it can be applied to online news publishing.)
Fewer Stop The Presses! columns
I'll be cutting back the frequency of this column from now on. Watch for Stop The Presses! to run here on Editor & Publisher Online two to three times per month (instead of weekly, as it has been). If you'd like to be notified whenever one of my columns runs, sign up for e-mail delivery; instructions are at the bottom of this page.
Other recent columns
In case you missed recent Stop The Presses!, here are links to the last few columns:
o What TiVo Teaches Us About the Internet, Wednesday, April 18
o Lessons From the Online Sex Sites, Wednesday, April 11
o Mining Your Site For Multiple Revenue Streams, Wednesday, April 4
o In Island Monopoly Media Market, Net Provides an Alternative, Wednesday, March 28
o Archive of columns
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This column is written by Steve
Outing for Editor & Publisher Online. Tips, letters and feedback
can be sent to Steve at steve@planetarynews.com
Copyright 2001, Editor & Publisher.
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