Businessweek.com (MHP) was charging $25 CPMs in 2006, and selling out 79% of its inventory. This year, its CPMs are down to less than $20, and even then it’s selling only a very weak 38% of its inventory. With CPMs down by a quarter and the sell-through rate down by a half, what has happened to total revenues? Astonishingly, they’re up by about 4.5% over the period in question, and are now running at more than $20 million a year.
The NYT sees the glass as half empty: “Though BusinessWeek.com attracts a lot of page views, 45 percent of those are from slide shows, which Web publishers consider a gimmicky way to increase hits,” writes Stephanie Clifford. “Only 16 percent of page views came from original articles for the six months ended in April.”
On the other hand, there’s another way to view these figures: BusinessWeek.com has remained profitable while capitulating to the first rule of making money from ads: that quantity matters much more than quality. The number of sites which can sell “prestige” ads or site sponsorships is tiny: while the dream of the internet circa 2003 was that you could launch narrowly-targeted sites with high-value readers and then sell them at a premium, almost nobody has successfully done that.
My dream is that we’re now entering the beginning of an era in which inventive partnerships between web publishers and advertisers will create new, high-value inventory, as advertisers realize they can’t get the exposure they need just by taking out full-page four-color ads any more.
But if and when that happens, it’s going to be natural web properties which reap most of the rewards. Slow-moving ofshoot websites of print magazines, like BusinessWeek.com, are unlikely ever to be nimble and creative enough to grasp that market, and might indeed be better off trying to monetize listicles. After all, their bright ideas for online are likely to do little more than eat insane amounts of money:
Hoping to find new revenue, BusinessWeek started a social-networking site, Business Exchange, and sank $16 million into it in 2007 and 2008. Almost two years after its introduction, the site drew just 1.5 million page views in the United States in July, according to the measurement firm comScore. That is about the same as Wikinvest.com, a start-up offering investment tips.
Last year, Business Exchange had expenses of $7.6 million, and brought in only about $600,000 in revenue.