Online pornography revenues in the US were $230 million in 2001, according to Jupiter.
Month: October 2002
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Internet use is hurting other media
Gartner confirms that Internet use is diminishing the use of other media. It’s not surprising, but it’s nice to have the number to back it up. The net is clearly affecting communication patterns more than media use:
- more than half of Internet users said they use postal mail less,
- A third placed fewer long-distance telephone calls,
- 20% watch television less,
- 20% read newspapers less,
- 18% go to see fewer movies,
- 15% watch fewer videos, and
- 15% read magazines less often.
It’s hard to believe these numbers are so low. I suspect the effect is higher than the respondents are reporting.
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Paid search is a key to Yahoo's success
Yahoo’s success in the last quarter is at least partly due to success in paid search. I wouldn’t go so far to attribute this success to Overture, as some have. This is really a tribute to consumers’ reliance on Yahoo to find things on the Net. In the long run, Overture needs Yahoo more than the other way around. A lot of folks seem to be getting this backward.
90% of Europeans have not paid for online content, and 40% say they won’t, according to Jupiter.
Also notable, some 16% said they would pay for news and archives, and of the £140m spent on online content this year, nearly half was on pornography.
I don’t have the figures for online advertising in Europe handy, but it has be to significantly, more than an order of magnitude, more than the £70m they’re spending on nonporn content.
I’ve switched browers again — from Mozilla, which I liked a lot, to Chimera, which I love. Thanks to Avi Rappaport of Searchtools.com for the excellent recommendation.
There’s not a lot to say about it, because browsers ought to be simple. It doesn’t do email, newsgroups, HTML composition, chat, addresses, or calendaring. It doesn’t have a sidebar for notifications, RSS feeds, related sites or search results. It can’t be skinned and the interface doesn’t have its own programming language.
It blocks popup ads and it has tabbed browsing, just like Mozilla. But it’s really fast, starts up right away, and it looks like a Mac application. If Netscape had introduced something like this in 1996, instead of Netscape Navigator 4.0, they might still be around.
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Vin Crosbie's 1% solution
Vin Crosbie describes how sites that convert from free to paid revenue models are lucky to convert only 1% of their users to subscribers. That sounds about right. It’s roughly the same response rate as a direct mail solicitation. It’s probably not too surprising, considering that in both cases, you’re sellling to a highly-qualified audience — at least if you choose your lists well.
So, if you think you can get $20 per year from a subscriber, you would need $20 rev/sub/year * .01 subs/user = $.20 rev/user/year to make up the difference. You’d only need twenty cents in advertising revenue per user to make this work. The number might even be lower, because your subscribers are likely to come from your heaviest users, who will generate the most ad revenue.
Of course, this assumes you’re able to sell advertising on your site. The irony is that if you’re pretty sure you can sell your content, you probably also have the kind of audience advertisers will pay for: affluent, focused, engaged and motivated.
According to the Internet Advertising Bureau, Internet advertising was down 18% in the first quarter.
This is still worse than other media. The IAB says, “According to CMR, 2002 first quarter ad spending was down 13.8 percent from the first quarter of 2001 for cable TV, 9.6 percent for magazines and 8.5 percent for national newspapers. In contrast, Spot Radio and Network TV both reported strong results for the first quarter of 2002, up 9.5 percent and 6.6 percent respectively.”
It’s not clear how much of the decline is due to the improved booking and accounting practices.
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Don't expect miracles from customization
Jupiter says, “Fewer than 20 percent of most sites’ audience will customize, and only five percent will increase usage frequency because of it.” There’s not a lot more information available without buying the report.
This isn’t surprising, but it’s certainly reason for caution and parsimony when implementing customization.
Another researcher is investigating consumers’ simultaneous use of multiple media. As I said earlier, this multi-tasking almost certainly favors the Net.
Try it and see. I think you’ll find that if you’re really reading and thinking, you won’t have any idea what’s happening in your local soundscape. Certainly not well enough to follow a narrative or ad message.
According to the WSJ, Yahoo’s revenue is up 50% to $248.8 million from $166.1 million a year earlier, and “marketing-services revenue climbed 22% to $147.4 million, which the company attributed to the company’s sponsored search services and inside sales organization.”
So, although services revenue continues to rise, marketing revenue accounted for more than a third the increase in revenue ($32 million out of $83 million), and may well be an even bigger share of Yahoo’s profit boost.
MSNBC saw Yahoo’s success as a reason for optimism about the online ad market, even before it became clear that Yahoo was well ahead of analyst’s estimates.