Digital Media conference highlights multiple streams of revenue.

"Website information publishers should learn from those who have previously created incredibly successful print publishing empires," said Don Nicholas, Digital Media Advisors managing director, at the recent "Secrets of Successful Online Publishing" conference in Brewster, Mass.

Produced by DMA, publishers of Internet Media Review newsletter, the conference brought together publishers from around the country interested in, as one California participant put it, "more money--more is always better!"

Although subscription website publishing revenue is growing faster than revenue from print publications, the conference showed how most online publishers are "leaving money on the table" by not profiting from more than one or two revenue streams.

Bill Ziff's three launch questions

The conference began by reviewing the three questions William B. Ziff Jr. used to ask when evaluating publishing opportunities, described in a 1990 Magazine Week interview:

* Journalistic question: "Is there a real need for people to read your publication, continue to read it, have loyalty to it, and identify with it?"

* Marketing question: "Will advertisers or vendors want to reach these people?"

* Economic question: "Are the first two questions an economic proposition?"

The first two questions introduced two themes that ran through the entire conference: "Where's the money coming from?" and "Why not simultaneously cultivate multiple revenue streams, instead of focusing on one or two?"

Numerous case studies were used to analyze the five major revenue streams: user subscriptions, advertising, listing fees, transaction fees, and direct sales of products and services. The role of design, navigation, and copy in maximizing the potential of each revenue source provided users with an opportunity to view "good" and "bad" examples of each approach, as well as analyze their own websites.

Roxanne O'Connell, research director at Digital Media Advisors, conducted a walk-through of several information-based sites, highlighting examples of intuitive navigation versus "trial and error navigation."

We also examined subscription conversion strategies--what are the best ways to boost subscription sales by encouraging visitors to enroll in trial subscriptions, and what to do if they don't want to subscribe? Nicholas then displayed the power of simplicity when obtaining visitor e-mail addresses.

What color are your buttons?

A great deal of discussion followed the concept of "buttons." Cleaners and tailors used to encourage clients to bring them the extra buttons packed with suits, so they would be available for any needed repairs. Of course, once a customer brought their extra buttons to their cleaner or tailor, they were virtually "locked in" to continue to use the cleaner or tailor. Going back and asking for the buttons back would simply be too much hassle.

The point, of course, was: What are the "buttons" you're using to lock your clients and customers in to your online service? What kind of barriers to departure have you created to retain your clients' loyalty and keep them from scurrying to the cheapest competitor of the day? Or, put another way, what kind of buttons can you add to your website offerings in order to lock-in your subscribers and visitors?

For example, instead of selling an e-book containing an Excel spreadsheet template, which simply generates one-time revenue, perhaps a better choice might be to place the spreadsheet online, where it would be available only to current subscribers. Departure would mean loss of spreadsheet functionality and, perhaps, loss of access to accumulated information.

Why online publishing will continue to grow

On the last day of the conference, the attractiveness of online publishing was compared to printing and mail distribution. Whereas printing and distribution costs are increasing between 5 and 10 percent annually, the cost of bandwidth and storage are decreasing 30 to 50 percent a year, providing dramatic proof of the effectiveness of online publishing.

The goal, of course, as participants agreed, is to build bridges between print and online distribution. Neither option by itself, is ideal. But because of management's frequent unwillingness to commit to a site profitablity plan, relatively few online sites are structured in a way that encourages planning and investing for online revenue growth.

"If those in charge of online services are not provided with incentives and authority to build such bridges, publishers will continue to be handicapped by Balkanized informatioin delivery systems that compete with, rather than complement, each other," Don Nicholas concluded.

The next Digital Media Advisor conference is scheduled for June 2005 in Washington, D.C.

Digital Media Advisors, 121 Boston Post Road, Sudbury, MA 01776, 978-440-8037, fax [phone], www.digitalmediaadvisors.com and www.internetmediareview.com

Roger C. Parker, P.O. Box 697, Dover, NH 03820, 603-742-9673, fax [phone], [e-mail]