Category: Analysis

AOL wants to make Internet advertising more like TV advertising. Sounds like the TW dog is wagging the AOL tail these days.
This brings to mind an issue I want to examine in greater depth on MediaSavvy: If each medium has its own nature (which seems obvious), and both content and advertising should reflect that nature (which is hard to deny), shouldn’t Internet content and advertising become more alike, instead of less alike?

Yahoo has 1.5 million paying subscribers for its various services. That’s 1.6% of their registered users. It’s another confirmation of Vin Crosbie’s 1% solution.

AOL is rediscovering its members, according to this AP story on CNN. I remember at the beginning of the merger, when AOL/TW was touted as a merger of subscription powerhouses, from online, to cable, to HBO, to magazines.
What they’re also rediscovering is that when people pay for something, they expect a certain degree of service and don’t expect to be whored out to advertisers, who are only paying a fraction of what subscribers are putting up.

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.

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.

I’ve been engaged in an interesting discussion on the Online News mailing list about the power of text advertising. A couple of participants say their experience shows that text ads outdraw graphics. I’m not surprised. No one goes online to read GIF’s.
Text advertising is desirable because it’s reader-friendly, cheap to produce, and more effective.
But, general advertisers and their agencies don’t understand text advertising for business and cultural reasons. They don’t make any money on production. The best-paid and most prestigious people at the agency are doing TV work. And everything is geared toward creating and maintaining “brands”, not selling stuff.
This is consistent with research that shows that “traditional” advertisers are embracing “rich media advertising”.
Then that leaves direct marketers, whom I have always seen as the natural market for online advertising. My sense is that they’re obsessed with direct email right now. Direct email is problematic because good lists are hard to find and expensive, and spam has increased consumer resistance and honed email filtering.
The next steps are becoming clear:
1. Develop standardized text-ad formats
2. Improve the marketing of Web advertising, particularly text, to direct marketers and their agencies.
3. Invent ways to make general news and information pages attractive to direct marketers without violating readers’ privacy or even appearing to do so.

Clay Shirky says, “A lot of people in the weblog world are asking “How can we make money doing this?” The answer is that most of us can’t. ”
This essay is definitely worth reading. When blogging is its own reward, supply will exceed demand — by a lot.

I’m not sure what to make of this interesting collection of information about paid content on eMarketer.
I don’t understand why Forrester’s index is based on the percentage of broadband and wireless users who’ll pay for a type of content, or why they think online tenure (which doesn’t seem to vary much) matters.
One thing is clear, news and general information is not on the list, so it must have a “Propensity to Pay Index” of less than 1.00. Video, consumer information, telephone calls, and music are at leasts 1.23.
Emarketer’s list of subscription sites is very interesting. Genealogy, connections between people (cards, classmates, and dating), and entertaiment dominate the list. The non-entertainment content organizations in the top 25 are Consumers Union, Wall St. Journal, Get Abstract, Sporting News, The Economist, TheStreet.com, Rivals.com, and Hoovers.

On a Saturday the New York Times technology news page and Yahoo’s technology news page are very similar in content, but could not be more different in design. The differences are telling.
The New York Times tech news page is dominated by wire stories from AP, Reuters, and Bloomberg, with a sprinkling of NYT-generated content. Yahoo’s tech news is, of course, exclusively wire content. Both, as far as I know, are edited by human beings. Each page has about half-a-dozen stories above the fold, in the first screenful of information. The two pages seem to have a lot of the same stories on them.
Why do I like the NYT page so much better?
The NYT page is better-designed. It uses Times (naturally), and Yahoo uses Arial, Microsoft’s ugly, cheapskate Helvetica knockoff.
The Times gives you more information about its top stories. The Times has summaries of the top stories and has headlines-only stories below the fold, but Yahoo has only one summary above the fold, followed headlines, and then most of its summaries below the fold.
The NYT page is denser. I love white space and the Web gives us the chance to create lots of it, but news pages want to be information-rich. Also, Yahoo’s white space seems to be the random space between automatically-generated text fields. Navigation bars should be easy to find, but the least-prominent thing on the page. NYT’s navigation bar is much tighter than Yahoo’s, using condensed roman sans serif (Arial, alas). Yahoo’s nav bar text is wide and bold.
Yahoo has a much more prominent ad on its tech page, but I don’t see that as an issue. The problem is what Yahoo does with the space it has.
It’s hard to tell how much of Yahoo News’s design problems stem from Yahoo’s trademark design. My guess is that they don’t have much control over fonts.
But I would like to higher information density on Yahoo’s news pages, more summaries above the fold, a narrower nav bar. Google’s tech news solves a lot of these problems, but the automated story selection is not nearly as effective as Yahoo’s human editors.

URL’s are a usability detail only geeks can care about. Geeks like me. Insist on a CMS that creates readable URL’s. [thanks to Adrian Holovaty for the pointer]