Mar 01, 2001
SUMMARY: Can you create a profitable free-content site for a niche demographic, even in an advertising downturn? This Case Study reveals how one site uses a healthy variety of revenue streams to profit. Especially useful for print magazine publishers considering variations on their own Web plays. || |
Christianity Today International, an organization founded by Billy Graham in 1956 that publishes magazines, books, church resources and CD-ROMs, launched its first interactive site in 1994. The site was first solely part of AOL, and then it migrated to the Web, changing names a few times on the way to finally become ChristianityToday.com.
Like many other publisher's sites at the time, this one was basically shovelware (supplemented with some community features.) On a regular basis the Webmaster would add fresh articles taken directly from the print magazines and that was about that. However, unlike many other sites, this one was mildly profitable within about 12 months of launch and remained so thereon.
By May 1999, the in-house online team at Christianity Today International badly wanted to redesign and upgrade whole site. They had two challenges:
1) They needed to please and meet the needs of their already loyal visitors and advertisers.
2) The changes needed to add up to increased revenues almost immediately in order to cover any increased costs. While Christianity Today International is a non-profit, they didn't want to lose money - especially with something already making a profit!
The team decided to take their time and get it right. Online Promotion Manager Mike Herman says, "It was a 15 month process. We redesigned the redesign a number of times! There were times we just tore it all down on our end. Our live site wasn't getting a lot of upgrades, but we did have to keep that going at the same time. So, we put a lot of energy into this."
The team, led by John LaRue VP of Internet Research & Development, researched current visitor preferences by sending out surveys to the site's 150,000 opt-in email newsletter subscribers. They also "scoured" site usage reports to learn exactly which types of content were consistently popular. Herman says, "This helped us develop content by felt need so people could find what they were looking for, instead of having our content organized by issue date." The redesigned site organized content by channels such as "Teens", "Parenting" and "Your Spiritual Life." Fresh content, repurposed content from print, online chat, online advertising opportunities and ecommerce offers were all integrated into each channel by topic.
At the same time, the team redesigned the back-end systems including consistent style sheets and templates so the site would be more efficient to maintain and update. Rather than investing heavily in ecommerce infrastructure, LaRue decided to continue outsourcing the site's store by using a $300 per month private-labeled store from Yahoo.
To generate more traffic and grow opt-in email lists, LaRue formed a partnership with DaySpring.com, a subsidiary of Hallmark. DaySpring.com created and powers a special "Encouragement Cards" site area where visitors can email virtual postcards to their friends. LaRue says, "When people send a card, they can opt-in to getting the newsletter. Then when their friends come to the site to pick up cards, it's branded with our left-hand navigation so people can visit the site from there."
Next, LaRue added pop-up boxes to the site's home page and major channels offering free email newsletter subscriptions. Each box places a cookie with a 15 day expire on visitors' PCs so folks aren't annoyed with pop-ups on a daily basis. Here's the clever part -- when folks subscribe for free newsletters, the next page that pops up to thank them also contains a free trial offer for a paid subscription to one of the site's sister print magazines!
Now that the site and its accompanying email newsletters were organized into topical channels, LaRue was able to place house-ads for specific Christianity Today products in context. For example, an ad for a women's Bible runs in the women's section. He also created a new media kit so the ad sales team could offer outside advertisers more targeted sponsorship packages. Plus, after noticing that educational institutions were among the site's most loyal advertisers, LaRue added an ad-based online directory to Christian Colleges and seminaries. Schools pay a flat rate of $2000 to be listed for one year.
Last but not least, two months after the redesigned site launched LaRue decided to kick product sales up another notch, by sending opt-in subscribers a monthly broadcast email focusing on a single special offer for a particular Christianity Today product available at site's store.
The completely redesigned site, launched October 2nd, was almost instantly more popular and profitable.
Traffic shot up from 2.5 million pageviews in September to 3.5 million in October and 4.1 million in January. The site's ecommerce sales also immediately rose, from $13,000 in September to $18,500 in November and $28,000 in January. About 15% of visitors who used the pop-up to subscribe to email newsletters, then also signed up for a free trial to a print magazine on the thank-you page -- so print magazine sales will grow too.
The eCards are steadily growing more popular. They generated about 100,000 pageviews in October and are projected to generate more than 300,000 pageviews for February 2001.
Ad sales held steady at about 25% inventory sell-through (a respectable amount for a consumer site) despite the greatly increased inventory. The school directory listings program has been particularly successful. LaRue says, "Now we have 60 schools sold and we anticipate that growing to 100 this year. It's still an experiment, but it seems to be a success."
LaRue tracks the site's profitability by a variety of metrics. He's found the site makes approximately .50-.60 cents per year in ad and product sales per opt-in email subscriber. He's also discovered each site user session is currently worth about 10 cents in ad and product sales.
LaRue's advice for other free content Web sites? "The overall key to success is to know your niche and develop a revenue model that works for it. The key to our free content success is to be able to generate income from multiple revenue streams, which include advertising, magazine subscription sales and our own product sales."