Web Sites Start To Pay Their Way

Folio: The Magazine for Magazine Management, July 15, 1998 by Dzintars Dzilna

With Web auditing data from New York City-based BPA International, Erhardt adds that he can show clients exactly how their ad dollars are being spent. "We can show you literally where every ad agency and marketing firm exec goes and how many page views there are by company. That is a huge selling tool." AdAge.com had 653,858 page views in March 1998. The cost of an audit from BPA is on a sliding scale: $1,200 for up to a half-million page views; $1,900 for 3 million page views.

Ad Age's Web site serves the company's print publication group, which includes Advertising Age, Advertising Age International, Business Marketing and Creativity. Financially, it is treated as a separate property (Erhardt looks at its P&L separately). But the company has still not made adjustments in its financial reporting methods that reflect transactions between its magazines and the Web site. In other words, the print titles do not compensate the Web site for the benefits it delivers, such as new subscriptions gathered on the site (Erhardt says the site generates $200,000 in new subscription revenue each year), customer service tasks or the savings generated when customers renew subscriptions online. And the online service does not pay for editorial that is provided by the magazine staffers.

To further drive traffic, Ad Age's Web site hosts other services for readers, as well as opportunities for advertisers: There's a Job Bank; Dataplace (industry research report postings); and a partnership with theglobe.com, an independent Web host, to provide chat rooms, surveys, e-mail and a place to build a personal Web page.

Altogether, Erhardt agrees that the site's main strategy is to drive traffic to sell advertising. "We've proven with the amount of advertising revenue we have that an open site provides for the best return."