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Like the trade publications which are the site's chief competition, the primary revenue source is advertising. The collection of features, says VP Brian Boltz, "provides lots of ways for the audience to view advertisers' information." Today, advertising accounts for over 90% of the site's revenue. A standard advertising package costs $6,500 per year.
There are other, smaller components of the revenue model that that Boltz expects will generate a larger share of revenue in the future:
The organization has its eyes open for potential additional sources of revenue: possible future services include facilitating transactions; new insurance products that could be sold and delivered electronically; and secure electronic document delivery.
Today, the PropertyandCasualty.com web site is targeted at three main
sub-audiences:
To grow the business, the organization plans to expand its content to appeal to additional layers of the insurance industry. The site plans to cover other areas of the property and casualty market, for example the so-called "captive market" or "alternative risk market" - insurance companies set up by a particular corporation to insure its own risk - operating offshore and at arms length from Bermuda, the British Virgin Islands, Barbados, or the Caymans. The site also intends to expand into other areas of insurance. A section on worker's compensation is currently under development. Other potential practice areas include medical malpractice, life insurance, and health insurance.
PropertyandCasualty.com provides a database of insurance providers and products. The organization sees this database as an opportunity to provide richer content. Building this database is challenging, since there are complex product lines in many specialized industry segments. One of the sources of complexity is regulatory: in the U.S., insurance is regulated by the state. Agent-brokers must be licensed in every state in which they practice. Every state has unique insurance regulations; there are even product variations within states - for example, some insurance companies will not write home-owners policies in coastal Dade and Broward Counties, Florida.
The insurance industry's fractal complexity provides PropertyandCasualty.com with many opportunities to deepen and broaden its coverage over time.
Recently, the site started tracking site and ad usage data, employing Accipiter's ad management system. Boltz comments that "the Accipiter system is pretty expensive for us to support, but that is the kind of information that our advertisers are going to insist on." Accurate data about visitors, page views, click-throughs, and leads are critical to attracting advertisers to a niche site like PropertyandCasualty.com. "For example," says Boltz, "we should be an appealing target for computer ads." In general, Boltz believes that as the measurement of online advertising gets more accurate and more common, targeted sites will draw a higher share of online advertising dollars. Today, the vast majority of advertising spending accrues to mass market portal sites like Yahoo and AOL.
The main user of the Accipiter reports is the site's editor. He is planning to use the Accipiter data to evaluate user interest in articles. He will use the feedback to select material that is most interesting to the audience and that drives the most ad click-throughs. PropertyandCasualty.com also plans to use the Accipiter system to analyze the path toward lead generation. When a user completes a transaction on the site, the system will show what steps the user took before he or she made the purchase. Boltz anticipates that using the Accipiter system will be straightforward, because of the system's ease of use.
VerticalNet has recently implemented an innovative system to share usage reports with its advertiser clients. Using the system, called Virtual Office, the client can see the traffic that its section of the site is drawing, including page views and unique visitors, information request leads and software downloads.
The PropertyandCasualty.com site has taken a few "baby steps" toward personalizing content. The site employs WiseWire's collaborative filtering technology to suggest articles that match a user's self-described interest profile. The site also uses cookies to keep track of user identity, so that once users have registered they don't have to enter their name again.
The next step toward personalization will be targeted e-mail newsletters, containing personalized news and ads. (Today, the site offers readers a non-customized e-mail newsletter.) With this "permission marketing" approach, says Boltz, "we'll be able to target well to people who are interested in specific content and the advertised products."
Personalizing the website's content is further down on the priority list. Ultimately, Lord and Boltz believe that personalization will become increasingly important, because advertisers will want to reach specific sub-audiences within a fragmented industry. For example, says Boltz, an advertiser might want to reach risk managers or insurance buyers, but would have no interest in reaching other insurance carriers. Ultimately, PropertyandCasualty.com would like to be able to offer users real-time promotions on-line. Those plans, however, are further in the future.
A critical audience-building initiative is VerticalNet's recent deal with Excite. According to the agreement, Excite will build co-branded areas on the Excite site to target VerticalNet's industries. These areas, which will be displayed when Excite users search for industry-related terms, contain news headlines and database searches drawing from VerticalNet content. Content links and banner ads in these areas will take users directly into the VerticalNet sites. "The Excite deal is pivotal for us," Brian Boltz told us. "It is one of the main advantages of being a VerticalNet Site - if we were only PropertyandCasualty.com, I doubt if we would get into Excite."
PropertyandCasualty.com is also employing traditional editorial, public relations, and promotional techniques to build user awareness. The site has several co-promotional programs in development with insurance industry trade associations such as the IIAA and the PIA, and with other trade publishers such as Andrews Publications and Rough Notes Magazine. The site's editor and sales representatives regularly attend industry trade shows. The organization intends to develop lively, even controversial content that will get the site quoted and remembered.
In 1997, VerticalNet invested in the fledgling business and built the PropertyandCasualty.com site according to the VerticalNet template. VerticalNet provides venture funding, technology, and administrative infrastructure. Perhaps most important, the VerticalNet affiliation provides leverage in forging deals with major online industry players, such as the recent deals with Excite and Onsale.com.
The company sees its role in facilitating the human side of e-commerce. The company's CEO Mark Walsh noted, in a recent interview with emarketer, "business-to-business use of the internet is not about transactions, per se, it's about the acceleration and facilitation of buyers and sellers finding each other." The company believes that the company's early presence will give it an edge over competitors, since the cost of entry in the community business will escalate over time - "if you want to play head to head with us," says Brian Boltz of PropertyandCasualty.com "you'll need to bring your wallet."
VerticalNet recently received a $16 million mezzanine round of financing, from investors including Koch Ventures, Internet Capital Group, Wheatley Partners, and Enertech Capital Partners.
The PropertyandCasualty.com site has been live since February, 1998. The site had about 20,000 unique visitors in July, and traffic has been more or less doubling every month. The site averages five pages viewed per visitor.
Another challenge is communicating with advertising buyers. "Very few people understand how to purchase online advertising in the B to B marketspace," says Boltz. "Buyers shouldn't be asking about hits." Other measurements, such as unique visitors, pages viewed per visitor, and actual business leads, offer a better idea of the size of the audience, and the depth of engagement that visitors have with the site. "Shortly," says Boltz, " we will be offering documented evidence of business, generated by the advertiser's presence in its virtual business center on PropertyandCasualty.com"
Balance personalization with other goals. Unlike some sites whose strategic goal is personalized content, PropertyandCasualty.com is taking a more tactical approach to personalization. The company's personalization plans are one part of a balanced approach, which also includes context (shared content, shaped by an editorial vision), and community (discussion forums and selected content for sub-audiences). Personalization is a powerful tool that is most productive in the service of specific business goals, and balanced with other communication approaches.
Connect content to commerce. PropertyandCasualty.com is in the first stages of using measurement technology to draw explicit connections between content, advertising, lead-generation, and transactions. The ability to explicitly draw these connections will be increasingly important to web business success. We suspect that PropertyandCasualty.com - like many other web businesses - is underestimating the effort it will take to measure and maximize the effectiveness of its advertising, lead generation, and audience retention strategies over time.
Share data with partners. The site has recently instituted an innovative program to share data with advertisers about ad and site performance. This type of data-sharing will become increasingly important - in advertising business models such as PropertyandCasualty.com, as well as channel distribution models such as Bay Networks. Successful web businesses will leverage their data collection and measurement capabilities to tighten partnerships with advertisers and distributors.