The 'ad funded' model has taken a bit of a beating this year. The big question is whether it can continue in a recession-hit media world.
Last month Blyk (the ad-funded mobile operator) withdrew their consumer offer and just this week Joost (the online video company) announced that market conditions meant that it too was moving away from a consumer focussed ad-funded model. These were both businesses heralded as at the frontier of the new media world and examples of how an ad-funded business model could be used to deliver new services to consumers on new platforms.
But that model is under severe threat.
Recessionary-driven declines in media spends have driven massive losses and cuts at ITV and focussed attention on the long-term viability of Channel 4. Newpapers too are suffering. And, to put this into a digital context, the first quarter of this year saw a 5% drop decline in online advertising.
So a new model has to be found as only the largest traffic sites can continue a purely ad-funded approach.
Surely it's got to focus on subscriptions. However, the print media industry let the genie out of the bottle with free content - and I think it's hard to see consumers willingness to pay for something that they have considered free for some time - unless there is an industry-wide approach. But who will blink first?
There are some interesting models out there. Spotify the online music service uses a blend of ad-based revenues and a subscription model. However, many people have asked how Spotify can actually make a profit and there is a good interview with Daniel Ek (the Spotify CEO) on TechRadar - although Ek does not directly answer the question as to how its business model really works. The core question for Spotify and others is what % of users will pay the subscription model when the free model is pretty good. The ads aren't really intrusive enough to make me switch to a premium version.
An alternative option is using micropayments for content. Here users buy premium content in return for just a couple of pence. However will users really want to make that 'purchase decision' every time they want to access/read a piece of content? And how will that work practically? The user would already have had to buy-in to the site producing that content and lodged some form of payment (in the same way that works for iTunes). The micropayment model has been mooted for over a decade - but is still not gained much traction. Perhaps the media downturn will see it dusted it off and reconsidered.
Showing posts with label recession. Show all posts
Showing posts with label recession. Show all posts
Friday, 3 July 2009
Tuesday, 13 January 2009
Every sale counts
You can't open a newspaper or turn on the TV at the moment without hearing more implications of the global recession and 'credit crunch'.
One of the key strategies for surviving an economic downturn is ensuring that every customer touchpoint is working as efficiently as possible. For a great many B2B marketeers often fail to maximise the impact of their web presence. But there are a number of techniques that businesses can employ in order to evolve their online presence away from simply brochureware to make their site support the sales process and demand generation.
Jakob Nielsen, one of the pioneers of website usability, outlines the three major goals relevant for almost all B2B sites:
1. Survive the screening process
In the consumer market around 67% of consumers use the internet to research products before buying (source: InternetRetailing Feb 2008). Again this habit has translated into the workplace with more and more employees using the internet to shortlist vendors in an initial research phase. This is where search engine visibility, homepage usability, website accessibility and content usability are essential. Additionally, ensuring that site content explains exactly what a company does (rather than the often impenetrable language of marketing-speak missions, visions and propositions) and signposting users to key elements of content is critical. Remember, first impressions count - and the website is the most influential first impression that B2B marketers can control. Even if potential clients are visiting simply to find contact information, make it easy for them to make contact in the way that suits them – email, instant messaging, telephone etc. (How many websites make it difficult to find the company’s telephone number!)
2. Build a reputation
This is where the internet excels and where companies can provide excellent post-sales support online at a fraction of the cost of other methods. However, this is the area in which many companies fail. A recent report by Transversal (March 2008) showed the dire performance of many UK firms when responding to customers’ emails. Less than half (46%) answered those questions “adequately” and the average time they took to respond was almost two days (46 hours).
3. Support your advocates
Nielsen recommends the creation of Advocacy Kits to make it easy for potential clients to access materials and information that helps them support the argument for a particular vendor. This may include links to external PR coverage, webinars, downloadable video and product tables together with PowerPoint slides (that clients can use in their own presentations) and downloadable White papers (using this as a potential value exchange to obtain some data about potential customers).
As with the B2C world, content is king. Building content distribution deals and gaining associations with the right industry bodies/brands takes the marketing message to a wider audience – hitting those business buyers who may be actively trawling the internet within their own buying cycle - and in an tougher economic client every sale counts.
One of the key strategies for surviving an economic downturn is ensuring that every customer touchpoint is working as efficiently as possible. For a great many B2B marketeers often fail to maximise the impact of their web presence. But there are a number of techniques that businesses can employ in order to evolve their online presence away from simply brochureware to make their site support the sales process and demand generation.
Jakob Nielsen, one of the pioneers of website usability, outlines the three major goals relevant for almost all B2B sites:
1. Survive the screening process
In the consumer market around 67% of consumers use the internet to research products before buying (source: InternetRetailing Feb 2008). Again this habit has translated into the workplace with more and more employees using the internet to shortlist vendors in an initial research phase. This is where search engine visibility, homepage usability, website accessibility and content usability are essential. Additionally, ensuring that site content explains exactly what a company does (rather than the often impenetrable language of marketing-speak missions, visions and propositions) and signposting users to key elements of content is critical. Remember, first impressions count - and the website is the most influential first impression that B2B marketers can control. Even if potential clients are visiting simply to find contact information, make it easy for them to make contact in the way that suits them – email, instant messaging, telephone etc. (How many websites make it difficult to find the company’s telephone number!)
2. Build a reputation
This is where the internet excels and where companies can provide excellent post-sales support online at a fraction of the cost of other methods. However, this is the area in which many companies fail. A recent report by Transversal (March 2008) showed the dire performance of many UK firms when responding to customers’ emails. Less than half (46%) answered those questions “adequately” and the average time they took to respond was almost two days (46 hours).
3. Support your advocates
Nielsen recommends the creation of Advocacy Kits to make it easy for potential clients to access materials and information that helps them support the argument for a particular vendor. This may include links to external PR coverage, webinars, downloadable video and product tables together with PowerPoint slides (that clients can use in their own presentations) and downloadable White papers (using this as a potential value exchange to obtain some data about potential customers).
As with the B2C world, content is king. Building content distribution deals and gaining associations with the right industry bodies/brands takes the marketing message to a wider audience – hitting those business buyers who may be actively trawling the internet within their own buying cycle - and in an tougher economic client every sale counts.
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