New Media companies should emphasize “media” over “new” June 29, 2009Posted by jeremyliew in advertising, business models, media, startup, startups.
AdAge has a good article today about how AOL has been attacking web publishing where it notes:
In the heady days of early 2000, the megamerger of AOL and Time Warner heralded the web-based future of publishing. It would create a digital platform for Time Inc., the biggest, most-prestigious magazine group in the world.
Needless to say, that didn’t pan out, and here’s where it gets ironic. Just as Time Warner is unwinding that mistake, AOL is figuring out the future of magazine publishing on the web. And it’s doing so without Time Warner’s content assets.
The model goes something like this: Find a vertical with an audience attractive to advertisers, brand it (Daily Finance, Asylum, Lemondrop, Politics Daily), hire five to seven people to run it and plug in AOL’s traffic fire hose. Repeat.
This reminded me a little bit of the continual tension in media companies caused by serving two constituents – readers and advertisers. AOL has clearly discovered one path to repeatable success, which is to start with the needs of advertisers. This is emphasizing the “media” part of new media.
The new media companies that are doing the best in this recession have taken a similar approach. Companies like CafeMom, Flixster (a Lightspeed portfolio company) and Glam have focused on creating highly valuable inventory for endemic advertisers, and on building excellence in sales execution.
In contrast, some other startups have focused on the “new” part of new media. They have often created incredible compelling experiences for users, and have generated impressive traffic. But their monetization ability has lagged; sometimes due to creating inventory that is hard to sell, sometimes because the startu’ps culture is not inimical to ad sales.
Here in Silicon Value there can be a tendency to overemphasize product and technology and underemphasize ad sales. Advertising revenue often scales with ad sales people. Yet I have seen some startups that have been disappointed with their revenue growth but have >10% of their employees focused on revenue.
Like AOL, new media companies should remember that they are also media companies, and organize themselves appropriately. This can include doing things like:
– Building traffic with a consideration for your ability to package and sell it to advertisers
– Placing significant company and senior management attention on revenue. This can mean up to 30-50% of employees working on revenue generating activities
– Adding advertising sales expertise and contacts to the management team
– Being flexible about tradeoffs between advertiser needs and user needs
Many new media companies based outside of Silicon Valley (especially those in New York) grasp this innately.
For more in this vein read two prior posts; on the preeminent importance for sales excellence in ad networks, and on the three ways to build an online media business to $50m in revenue.
Focusing on copy can dramatically improve user response June 18, 2009Posted by jeremyliew in copy, product management, UI, usability.
A couple of years ago I posted about how improving copy is an easy way to increase user interaction. Bokardo recently posted on a similar topic, about how microcopy can improve your user interface:
Microcopy is extremely contextual…that’s why it’s so valuable. It answers a very specific question people have and speaks to their concerns right on the spot. And because its so contextual, microcopy isn’t always obvious. Sometimes you have to hunt to find the right words. (or create an error notification service like I did) How to discover these hurdles? Talk to people! Why aren’t they adopting your software? What concerns do they have? What are they worried about? Successful salesmen know the power of these small turns of phrase. They have an arsenal of them for every situation.
Here are some other examples:
- When signing up for a newsletter, say “this low-volume newsletter”
- When people add their emails, say “we hate spam as much as you do”
- When subscribing for something free, say “you can always unsubscribe at any time”
- When selling an paid-for web application, be sure to let people know if you have a free trial.
- When storing customer’s information, say “You can export your information at any time”
- If offering optional account creation, say “If you create an account, you’ll be able to track your package”
All of these microcopy examples have one thing in common: they help to alleviate concerns of would-be customers. They help to reduce commitment by speaking directly to the thoughts in people’s heads. That’s why this copy can be so short yet so powerful.
Don’t be deceived by the size of microcopy. It can make or break an interface.
Writing good copy may not feel as heroic as implementing a huge new code base, but it can often by just as effective in increasing user interaction.
10% of ecommerce sites convert at better than 8% June 17, 2009Posted by jeremyliew in Ecommerce.
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Internet Retailer shares a bunch of interesting ecommerce stats from the E-tailing group. Notable for me is the conversion rate for retailers in 2009:
Conversion Rate: % of retailers
9% >20%: 1%
Don’t know: 6%
Who buys extended warranties? Poor people. June 16, 2009Posted by jeremyliew in Uncategorized.
Tags: extended warranties
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NY Times has a really interesting article about who buys extended warranties:
The study reported that consumers are far likelier to buy warranties for products they consider enjoyable (like iPods) than for dull products (like landline phones), simply because, dollar for dollar, they value the fun products more. Therefore, they would be more upset at the prospect of losing them.
The study also found that people with lower incomes are more likely to buy such warranties, because they know they cannot afford to replace the products.
It also notes that many consumer advocacy groups consider extended warranties to be a bad deal. Interesting research.