Apples, Oranges And Journalism Revenue Print And Online

from the picking-it-apart dept

BullJustin points us to a Columbia Journalism Review article that tries to do some back of the envelope calculations on the difference in per user revenue both print and online. The end result, not at all surprisingly, is that a print reader is "worth" a lot more than an online reader. But, that's totally meaningless. It's a classic innovator's dilemma mistake. Concentrating on the small group of people who will pay me $1,000 and ignoring the massive group who will pay me $5 isn't very smart... especially when the first group is rapidly shrinking and the latter is growing (and that the "value" of each moves in the same direction as the user growth rate). Not to mention the fact that the cost of acquiring a user in both scenarios is entirely different.

But the bigger point is that it's not the users who are paying here, it's the advertisers. Breaking out the revenue on a per user basis is meaningless, because it's not the actual marginal value of the user. Getting one more print subscriber doesn't increase the ad revenue by the amount discussed unless they can actually sell more advertising.

Rather than looking at revenue per user, the real goal should be looking at maximizing revenue, period. And to do that you look at the overall trends of where revenue is growing and where it's shrinking -- not on the average revenue per user. Focusing on ARPU simply makes you ripe for disintermediation from someone who focuses on where the market is heading, rather than how to squeeze the most out of each user.

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Why Won't Local Governments Just Increase The Length Of Yellow Lights?

from the start-a-campaign dept

We've seen that, thanks to the economy, states like Maryland and New York are ramping up programs for speed and red light cameras. However, that's not true of all places. Mississippi recently went the other direction and banned such traffic cameras, following a similar backlash in Arizona. A recent Wall Street Journal article takes a look at all of this (including the fact that some of the bigger traffic camera companies are based in Arizona) and raises the key question: why won't local governments just increase the length of yellow lights on traffic signals. That, alone, would save numerous accidents (and lives). Yet, many governments have been doing the exact opposite: putting lives at risk, just to bring in more revenue (often to pay off those private companies that installed the cameras). On top of that, there are still plenty of locations that don't leave any pause between switching lights between cross traffic. Here in California, for example, it's quite rare for there to be any pause between a light turning red in one direction, and the perpendicular traffic light turning green. Studies have shown that a slight pause -- where all directions are red -- decreases the number of accidents as well. And yet... governments focus on using traffic cameras solely to increase revenue.

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Maryland Ramps Up Traffic Cameras... But For Safety Or Revenue?

from the gotta-be-the-revenue dept

While other states are banning traffic cameras after realizing that they're entirely about revenue, and tend to be less efficient as a way of improving safety, it looks like Maryland is going in the other direction. Tim DiPaula points out that Maryland is planning to increase the use of both speed and traffic light cameras, using the overall "better safety!" claim to get it approved. Of course, the fact that some towns in Maryland that already have such cameras brought in more money from them than the entire town budget seems to also be an important factor.

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What Happens Once MySpace's Deal With Google Ends?

from the then-what? dept

You may recall, that a few years ago, MySpace (or, rather, News Corp.) signed a $900 million advertising deal with Google. The deal guaranteed at least that much in revenue from Google, even if the ads didn't really earn that much. Basically, Google felt the need to do the deal to keep competitors off of MySpace. However, as people have finally started realizing that advertising on MySpace (or other social networks) isn't working out, it's worth noting that the clock is ticking on the deal. There's still a bit more than a year left on the deal, but Google has been shying away from similar deals, and there's growing evidence that ads on social networking sites just don't pay. The Google deal may have helped keep MySpace afloat for the past few years, but without a replacement things may get trickier.

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'Blogging Won't Make You Money,' Says The Man Who Made Lots Of Money By Blogging

from the yet-another-mainstream-media-attack-on-blogs dept

It wouldn't be too much of an exaggeration to say technology journalist Dan Lyons has a Schizophrenic relationship with blogging. In 2005, he penned Forbes' laughable cover story called "The Attack of the Blogs," but a couple of years later, he was uncovered as the author of the hilarious Fake Steve Jobs blog. Alas, it seems his love-affair with the medium has faltered. In his most recent column for Newsweek, Lyons has a real surprise for everyone hoping to retire on their Google AdSense income: "while blogs can do many wonderful things, generating huge amounts of money isn't one of them." Taking a look at some recent blogging layoffs and his own paltry advertising income as the anonymous impersonator of Apple's CEO, Lyons concludes that growing rich from blogging is a "fairy tale."

What's missing from Lyons' piece, of course, is the great success he experienced as a direct result of blogging. Not only did he receive a big book deal using the same Fake Steve Jobs character he created for the blog, Lyons has been invited to speak and write widely on the topic. Further, it's doubtful that his high-profile switch from Forbes to Newsweek was anything but augmented by his blogging success. While relying on traditional advertising may not be the most promising business plan - especially given today's market - blogging can and does serve as an integral part of the success Lyons and many others seek.

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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Happy Birthday Facebook, Now Show Us The Revenues

from the maybe-they-got-some-birthday-money-they-can-use dept

Facebook celebrated its fifth birthday this week, and amid all the navel-gazing about what that means for the internet, one big question still hangs over the site: how will it monetize its popularity? This is an issue that continues to dog the social-networking space, as Om Malik points out that MySpace is struggling to generate revenues as well. These sites' massive amount of traffic and visitors, and the huge amount of time spent there, have traditionally not automatically equated to big advertising revenue, and there's nothing to suggest that's going to change soon, particularly given the slowdown in ad spending. If these sites are depending on advertising for revenues, they've got to come up with something more compelling than simple banner ads, which aren't delivering decent CPM or clickthroughs. While sites like Facebook and MySpace have plenty of life left in them, at some point, they're going to have to deliver an effective way to generate significant revenues.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Hulu 'To Catch YouTube' -- Great, But So What?

from the rising-tide-etc-etc dept

The FT's got a story saying "YouTube is in danger of being upstaged commercially" by Hulu, the online video site owned NBC and News Corp. It's based on a report saying Hulu will make as much in advertising revenues as YouTube next year, about $180 million, despite having far fewer active users. Two points: first, is this really surprising given the strengths of Hulu's parents at selling advertising around content; second, when did this become a zero-sum game? The article sets up some sort of adversarial relationship between Hulu and YouTube, or between professional and user-submitted content. While perhaps there's some competition for advertising dollars -- as there is between any two parties selling ad space -- the two sites don't have to succeed solely at the other's expense. Despite what the likes of Andrew Keen would have us believe, there's room enough on the web for both professional TV shows and amateur fat cat videos, and the success of one doesn't intrinsically mean the failure of the other.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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SEC Sues Former AOL Execs For Ad Scam

from the the-case-that-keeps-on-giving dept

It's somewhat amazing that this case is still going on, but AOL's sneaky ad deals to boost its own revenue are still the target of lawsuits. Back in 2006, we noted that federal prosecutors had decided that it wasn't worth prosecuting the executives involved. However, it appears that the SEC feels differently. It's now sued eight former AOL execs for taking part in the scam -- though, four of them have already settled. If you don't recall, AOL had this nice little trick where it would "swap" ads with other sites, where no money changed hands, but both sides would record revenue. That let them boost revenue (up to a billion dollars for AOL) without any actual revenue coming in. It's a nice little trick... and it's also illegal. Though, it all took place in the 2000/2001 timeframe, so it's not clear why it took the SEC seven years to do something about it.

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Cities Caught Illegally Tampering With Traffic Lights To Increase Revenue Of Red Light Cameras

from the this-again? dept

Just last month there was the latest in a rather long line of reports noting that red light cameras tend to increase the number of accidents because people slam on their brakes to stop in time, leading to rear-ending accidents. Time and time again studies have shown that if cities really wanted to make traffic crossings safer there's a very simple way to do so: increase the length of the yellow light and make sure there's a pause before the cross traffic light turns green (this is done in some places, but not in many others). Tragically, it looks like some cities are doing the opposite! Jeff Nolan points out that six US cities have been caught decreasing the length of the yellow light below the legal limits in an effort to catch more drivers running red lights and increasing revenue. This is especially disgusting. These cities are actively putting more people in danger of serious injury or death solely for the sake of raising revenue -- while claiming all along that it's for safety purposes. Is it any surprise that one of the six cities is Dallas? Remember, just last month Dallas decided it wasn't going to install any more red light cameras because fewer tickets had hurt city revenue.

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