As Ads Get Interactive, Selling Information Will Become a High Touch Industry

Sep 19th
posted in

Newspapers Going Free

The NYT just went free and likely the WSJ will follow. Once something goes free it is hard to start charging for it again - just ask Prince.

Getting Real Information From Google

A few years ago some Google human review documents were leaked stating things they considered spammy at that time. Google usually gives webmasters misinfomation about organic search results, but their advice on AdWords ads is typically clearer in how they want to shape the web. The Inside AdWords blog just classified ebook sites as being similar to other types of sites that are likely to get hit by quality score issues.

Google will push selling ebooks that are published by a publisher they have a deal with, but if you are selling information outside of a large Google partner and Google is not hosting your content (and getting a cut of the action) they don't want you to be selling ebooks on their web. To be fair, for every satisfied ebook purchaser there are likely many people who paid to buy an ad formatted and sold as information, as marketers have abused the ebook format.

General Web Publishing Trends

  • each day the web collectively improves how page elements are used (example: using tabs better)
  • relevancy algorithms and ad networks make the most useful or most profitable business models easier to find while less sophisticated or lower value formats / models / businesses die
  • a near endless sea of information becomes freely available, as information gets commodified by open competitors
  • technology decreases the cost of creating interactive experiences (you can embed Google presentations in your web pages and hold live real-time chats)

Profitable Longterm Sales Growth

Given those trends I think the 4 big things we will see in selling information are

  • demise of one time sales based business models - they are nowhere near as profitable as subscription based models, and they expose the merchant to lower end customers that are less likely to invest enough to succeed or invest in recurring charge based models
  • the rise free and ad supported - if information is generic in nature and not time sensitive then it is going to get harder and harder to charge for it, especially if little value is shared before the sales pitch and Google is trying to clean these types of sites out of the advertisement slots as well
  • people paying to distribute valuable information for free - I recently saw an AdWords ad for OpenCourseWare from the Sloan Business School. They are not only giving their courses away, but now they are paying to give it away. This means that if you go to MIT you are paying for the interaction, format, certificate, and atmosphere. You are not paying for learning or information. In a couple years, in many industries, better free information will exist than what you currently pay to access.
  • subscription for interactive stuff with various formats - Google just launched their Gadget ads. As ads get richer and can show more I think the keys to selling will be to use a variety of formats to convey your messages, give people more than they want and let them consume the parts that are most interesting to them, and come up with formats that feel personalized and interactive. Publishing will become less about investing in a variety of projects until you find a hit and more about the art of investing in relationships.
Published: September 19, 2007

Comments

September 19, 2007 - 11:56am

Thanks for this post. Much appreciated.

September 19, 2007 - 7:30pm

Thanks, Aaron, for clarifying the trend toward subscription versus one-off pricing. As owner of a web firm, our focus is developing and providing services that foster residual income. Trusting this trend will continue.

September 20, 2007 - 3:36am

Would like to comment on: "As ads get richer and can show more I think the keys to selling will be to use a variety of formats to convey your messages."
I would change that to TEST a variety of formats as I have found that the richer ads can sometimes bring in more people but the ROI can be less.
A lot depends on what business you are in and who the target customer is.
Another barrier is the cost of producing rich ad formats for small and midsize businesses.

September 20, 2007 - 2:05pm

Hi Ron
I am not just talking about creating ads when I talk about content richness. I am talking about those who want to keep selling content in the years to come. Those people will need to abandon a text only format that was sufficient a few years ago.

September 22, 2007 - 3:44am

Great Post Aaron! Keep up the good work.

September 30, 2007 - 2:27am

Aaron,

I'd like to clarify a couple of points regarding the "people paying to distribute valuable inforation for free" trend.

MIT OpenCourseWare was awarded a Google Grant for their AdWords campaign, and they're not paying for their ads. Non-profits can apply for a Google Grant and receive up to $10,000 a month in ad spend, at up to a dollar a click http://www.google.com/grants/policies.html (and according to the MIT website, they're also receiving in-kind contributions from an SEM company). There are certainly costs associated with putting the material online, but in this instance PPC isn't one of those costs.

The material that is available to the general public via OpenCourseWare is often not complete due to copyright and other restrictions. In most cases, you are not getting all of the information that a student attending the school would receive. The Wikipedia entry for MIT OpenCourseWare provides more background about the MIT project in particular, and a search for "Open Educational Resources" will show many examples of this movement as a whole.

I would have responded sooner, but I was away at a conference discussing some of these very issues this past week. :)

September 30, 2007 - 12:05pm

Hi Morgret
Thanks for the insightful comment and I hope your conference went well.

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