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Fastwater Rapids vol. 1.15, 01Mar99
Building out a Web site with high-quality content that attracts visitors and retains customers is an expensive proposition. Costs include developing original or licensing syndicated content, staff and management resources, systems and/or services to get it up on the site, and integrating it with processes that support the business, such as advertising, commerce, and service. With the high level of investment that's required to keep a site rife with quality content, Web business managers need to know that the content is producing expected returns. They need to know that content works, which means that they need to be able to measure its effectiveness.
At the Seybold Seminars conference in Boston this week, we will take
a closer look at ROI for content in a session entitled "Measuring Performance:
How to Know that Content Works." In preparing for the session, we
talked with several companies on both the buy and sell sides of the syndication
relationship about the metrics and methodologies that they're using to
measure the effectiveness of content. The conversations indicate
that many content subscribers are still working their way through some
of the fundamental business and technical issues associated with finding,
licensing, integrating, and publishing syndicated content -- activities
that are upstream of measurement. In this article, the first of two
in a series, we take a look at some of these challenges and at how providers
and subscribers are dealing with them. A second piece to be published
in a few weeks will explore our Seybold topics -- how are companies measuring
the effectiveness of the content that they license, and how are they using
the results to improve and enhance their Web businesses?
What's not always easy is finding the right content -- content that appeals to the target audience, supports the business model, and furthers the site's strategy -- at a price that's affordable. MetalSite, the online specialty metals marketplace, is wrestling with both of these issues. MetalSite is one of the growing number of vertically-focused Web businesses that are expected to have major impact on the development of Web commerce. A report by investment bank Volpe Brown Whelan & Co. estimates that the 150 or so vertical marketplaces currently in varying stages of development generated revenues of $290 million in 1998, a figure that's projected to jump to $20 billion by 2002.
According to Maggie Bray, MetalSite's director of communications, the needs of the vertical-market portals are not being met by current syndication offers. "The content owners need to look at vertical portals differently from a pricing perspective," comments Bray. "Sites like ours don't have the kind of financial resources that the big portals have. ROI becomes a real issue for us." Her colleague Mark Hamilton, MetalSite's content manager, points out another syndication issue for niche sites -- finding content that targets a very specific audience profile. MetalSite went live in August 1998 with news from Cahner industry publications like American Metal Market and Metal Center News. Now the company wants to include coverage of broader business news that affects the metals industry, but is having difficulty finding the content that targets its very specific audience profile. As a case in point, consider the weather reports that MetalSite wants to provide -- not so that users know to take an umbrella to work, but to track a major factor in logistics planning. Turning a general weather feed into a vertical-industry management tool will require development effort on MetalSite's part.
Finding the right content is also challenging for sites that serve a large audience of customers with diverse profiles and whose needs evolve over time. These issues -- and a fiercely competitive environment -- brought online investor SureTrade into partnership with iSyndicate. The race for customers in online investing is one of the tightest on the Web. There are now more than 100 online brokerage firms operating on the Interent, up from a handful just a few years ago. These firms will compete for the 14 million online accounts that will be opened over the next few years. Low-priced commissions, the original impetus behind the growth of online trading, have become commodities, so competitive advantage has to be created along other dimensions. One of which is content.
SureTrade and its rivals are crafting syndication relationships at a brisk pace in order to provide news and research that will attract and keep traders. Established brokers like Merrill Lynch, whose original research is one of the company's crown jewels, capitulated to market forces and made their reports available to registered users on a trial basis starting in November. The experiment has netted the company 90,000 registered users, 2,000 of whom have become Merrill brokerage clients. As reported in a recent Wall Street Journal article, Merrill will probably continue to offer a limited selection of free research to these users. Merrill VP John Steffans is quoted as saying, "We'd like to try to keep those connections."
For SureTrade, aggregators like iSyndicate help to cost-effectively address the content needs of a diverse audience. SureTrade VP Rich Hagen says, "Our customers range from day traders with hyperactive information consumption to moms and dads who want to pick one or two long-term investments for their kids' college funds. We need a great deal of breadth and flexibility in our syndication relationships." SureTrade listens to its customers and provides the content, products and services that they want and need throughout the lifecycle of the relationship. "We have customers who come to us as novice traders," comments Hagen. "Their information needs evolve as their level of knowledge and sophistication increases over time. We try to engage in an ongoing conversation with them so that we can adapt as necessary." That's one of the primary benefits of working with an aggregator like iSyndicate -- subscribers can swap out content that doesn't work or is no longer effective because they aren't captive to a direct deal with a particular content provider.
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