Paul Lomax - Two Point Oh

My ten guiding principals for a Web 2.0 strategy are now available as a slideshow!

These tactics for success will help ensure your site grows its audience and revenue and maximising profitability by harnessing the power of the Web 2.0 state-of-mind.

As if the classifieds industry needed another nail in it’s coffin, Facebook have launched a new free classifieds service called Facebook Marketplace. It was rumoured to be powered by Oodle, but now it’s thought to be have been developed in-house.

Could Facebook be the new Google? Can they take decent share of any market they chose to dip into, just from having such a large reach? Their photo sharing service is a very popular feature of the site and could cause Flickr to suffer despite it having a fraction of their functionality. If all your friends are on Facebook, why bother with Flickr? The same goes for their event system competing with sites like Upcoming (now part of Yahoo) and Eventful.

Gordon Macmillan from Brand Republic has noted that online newspapers are reporting their advertising revenue is not looking as good as it once was.

“We absolutely see slower growth coming,” says Kip Cassino, vice-president of research at Borrell Associates, a media-research firm. “Generally, newspapers tend to believe things that have been good are going to get better. And that’s not always the case.”

A possible cause is that advertisers are looking to spread their spend across more sites and are also moving away from the traditional players, towards the likes of facebook and myspace. This, coupled with the continued growth of paid search - a sector that only Google, Yahoo and MSN can play in - means bad news for online newspapers, and possibly traditional media online in general.

A friend of mine who works for a big online advertising player recently commented that “advertising revenue should just be the icing on the cake” and that too many publishers are relying solely upon ad revenues in their business plans. Newspapers do have other sources of revenue - unfortunately the Classifieds market is in a much worse state…

One of my favourite talks from the Online Publishers Association London 2007 Forum last week (8th March) was from Peter Horan, CEO of IAC (aka Ask.com) on the subject of what he calls Intent Driven Media. He talked about the impact of search on media, explained how the first five seconds of a user’s visit are crucial, suggested five corner-stones of successful content and finished on some great tips on monitisation.

Here are the notes from Peter’s presentation on Intent Driven Media.

How content was from Gutenberg to 2001

• One to many publishing.
• Reader makes a choice based on brand.
• Publisher controls timing, coverage, audience access to information and vendor access to audience.

Then Search happens

• Impatient readers expect to be in control
• Every page is now a front door

  • You should be getting at least 50% of your traffic from search engines.

• The first five seconds are crucial!
  • A reader comes in from a search engine into an article page.
  • They will decide whether this page is for them within five seconds, before pressing the back button.
• The first sentence sells your article and keeps them on the page.
• Magazine and newspaper writers assume people want to read their article – online you have to assume they don’t – hence no puns, plays on words or in-jokes.
• Users will scroll down to your content, so they probably won’t even see your logo – convey your brand with colours etc.
• You need to sell them the next click, so put related articles near the middle or top of the article. About.com got a 15% CTR when they did this.

Five corner-stones of successful content

1. Relevance - Readers are looking for complete solutions.
2. Resonance - Expertise is relative – they are looking for the like-minded, pro or otherwise.
3. Specificity - The specific always drives off the general.
4. Speed - Readers need the content on demand.
5. Comprehensive - Readers want the full story, so they value input from peers.

So a mix of content is required, from broad to narrow; from small audiences (long-tail) to large audiences (mass) – delivered from a range of sources, from editorial content , blogs, UGC, Forums and ratings, reviews and comments . For example narrow content might be a search for gardeners in my area, whereas broad content might be an article about gardening trends.

Tips for monetisation success

• Metrics drive innovation.
  • You can pretty much test everything on the web.
  • The ability to learn and to iterate is your competitive advantage.
• Web development and design is a process, not an event.
  • The first day after a redesign is the worst.
  • The day you stop tweaking a website is the day it dies.
• Make informed decisions, understand costs and benefits.

Focus on three simple things:

1. The cost of audience acquisition
   • Don’t make a net loss in driving traffic.
   • Consider PPC as a cost-of-sale rather than marketing.
   • Your online audience should be a superset, rather than a subset, of your print audience!
2. The cost of content creation.
3. Your rate of monetisation – ie yields.
   • And it’s not just about ads!

“This is the age of atomised information bound by reader interest.” (as visualised by Digg Swarm).

ScreenDigest have released some research findings into user generated online video (UGOV). Their analysis is that:

Consumer usage exploded in 2006 but revenues will prove slow to develop. The honeymoon period for user generated content is over.

Despite the rather pessimistic headline, their report actually points to video advertising revenues growing from $200m in 2006 to $900m by 2010. However they are predicting that user generated video will contribute just 15% of this despite providing over 50% of the actual video content on the Internet.

They point to five business models currently being used to monitise user’s videos:

• Advertising
• Content Licensing
• D Commerce (digital sales and rental of premium movie and TV content)
• Subscriptions
• Technology Licensing

But senior analyst at ScreenDigest, Arash Amel, suggests that:

No one has found a way to make real money from the huge audiences who participate on these sites.

Greg Yardley writes about the differences between risk in CPM, CPC and CPA in online advertising