Did giving online ads away for free undermine future revenue?

Replies to This Discussion

Permalink Reply by Paul Black on April 16, 2009 at 12:44pm

Just sell it as a package deal and distribute billing weighted between all components of the marketing "package". This way each element has a perceived value > 0.

▶ Reply to This

Permalink Reply by Martin I. Hooks on April 28, 2009 at 6:26pm

I agree that packaging print and online is the best way to go at this point, but in the beginning there was no way to demonstrate value perceived or otherwise. It's difficult to associate value to a free item without showing the audience and the measurements of that audience's activity. Free online is not free...it has been costly to publishers in the long run.

▶ Reply to This

Permalink Reply by Mitch Rouda on April 28, 2009 at 1:33pm

Many new products in many industries have been introduced with ridiculously low offers, if not as free merchandising to other services.

While that is never a great approach, and probably did "set us back" in explaining the value of our online offerings, it is silly to think that that is preventing us from reaching proper values today.

Every marketer (well most every) knows by now that 1) the internet has an extremely large share of time spent compared with other media outlets (especially print), and 2) properly composed and targeted advertising messages online generate great response rates.

The problem isn't with that core value equation. If you are the only game in town you could explain this and raise rates with impunity. The problem is how many other methods of online reach besides media outlets are available, from direct marketing to Twitter. It is not a demand problem it is a supply problem. If we engage an audience better than anyone else, we can sell the value of what we have done. And if we don't . . . .

▶ Reply to This

Permalink Reply by Bradford Stauffer on April 29, 2009 at 12:42pm

Quote: "If we engage an audience better than anyone else, we can sell the value of what we have done."

Absolutely! I agree with other comments that we have set ourselves up for a difficult climb by giving away banners in the past. But no matter the history, we now know it's all about engaging our community (across all mediums/products) enough to create high value for the advertiser/sponsor. It's time to CHANGE the way we sell, across the board. We must stop touting individual print ads, banners, sponsorships, etc., and sell "packages" 100% of the time. A big change for some indeed, but frankly we're out of time to rethink it.

▶ Reply to This

Permalink Reply by Guy LeCharles Gonzalez on April 28, 2009 at 2:38pm

Giving away anything for free -- ads, content, time -- devalues it to some degree unless it's tied to a larger cause. (ie: Pro-bono = good; "value add" = bad) In the case of online ads, doing so definitely set publishers up for the current problem of oversupply, low CPMs and pure-play competitors doing a better job of delivering targeted audiences at reasonable rates. Impressions mean nothing, though, without engagement and "traditional" online advertising is arguably the least engaging (and sometimes off-putting) form of advertising there is.

Until publishers put an appropriate value on their content, and make that content truly valuable to their readers, their rapid decline will continue apace.

▶ Reply to This

Permalink Reply by Wayne Davis on April 28, 2009 at 4:33pm

I have been giving away New Product release space for decades ... does that make it worthless. NO ! ! ! It enables us to engage current and prospective clients. Since when did "priming the pump" become a worthless exercise?

▶ Reply to This

Permalink Reply by Chris Foster on April 29, 2009 at 8:37am

Thats an excellent question. The not so excellent response is that clients (advertisers) didnt see the value initially. There were few metrics by which to measure lift of on-line advertising dollars. So there simply was not a budget for on-line seperate from a lump sum 'print marketing' line item. Publishers knew it was going to be a significant part of our businesses in the future and pushed to develop the online programs for industry suppliers (priming the pump as it were). Over time we were able to prove it had value, and started charging for the services.

The negative impact is that people (consumers) think information is free. They dont pay for magazines anymore, they read things on-line for nothing! While advertising pages have been the primary model for supporting print and delivery costs in publishing for many years, CPM rates charged for on-line has not yet grown to the point of replacing the diminishing print page dollars. Our resources to create information didnt stay the same with the Internet. They did in fact go up (hopefully only slightly, but up none the less). And of course it is very difficult to get most readers to pay for reading the information. Its on the net, thus it is free (right?).

So we are between a rock and a hard place right now with rising web dollars not rising fast enough, print pages declining too fast, and a poor economy that stop consumers from spending - let alone spend on information (all that stuff's free anyway, right?). I have a bunch of editor's who create that information. They really like to get paid for what they do. They are a quirky bunch.

Paul Black and the others are right in that packaging web, print, conference, etc... is the way to go if you can't directly assign dollars to a web sale. That does keep value in the package for the web side of the equation.

Mitch mentioned a good point as well in that it is not a demand issue as much as an excess supply issue. Lots of ways to reach people and everyone thinks their idea is the best. What we need to do is actually have the best ideas - and convince the industry we serve to buy into them. Measure with metrics and prove value. But it has to be priced to begin with.

▶ Reply to This

Permalink Reply by Keith Gregory on May 4, 2009 at 11:42pm

no one has mentioned that the challenge for publishers is that many can't increase rates since there are new competitive threats.

Before Google, marketers had no such thing as PPC.

▶ Reply to This

Permalink Reply by Josh Gordon on May 9, 2009 at 12:27pm

You have to start where you start. If you have to sell cheap to get started, sell cheap. The point at which you sell out your online inventory, and have more advertiers wanting in, is the point where you can rasie your rates. There is no bettter way to get rate card than to have to put an advertier on a wait list for a bit.

▶ Reply to This