Lou Tosto, General Manager, Explains the Differences Between SmartMoney.com and Its Print Sibling

Q: How is SmartMoney.com's content different than that of its print parent, Smart Money magazine?

Tosto: VERY different! Unlike other online properties in relation to their print siblings, only 2% of the magazine's content is used for SmartMoney.com. We have over 100 writers and staff who work for SmartMoney.com, managing about 54,000 pages off of the homepage.

But rather than just be editorial (and we are proud to admit to the standards and heritage of Dow Jones and Hearst) SmartMoney.com has always wanted to be much more active with its users, allowing them the opportunity to do calculations for particular investments, portfolios, and the like.

This means much more than just posting an online calculator, which most financial information sites have. Our site has 100+ Java-based tools and worksheets that allow any user to calculate and determine scenarios for a position with respect to any financial product or investment out there. And we are constantly developing and optimizing these tools and worksheets to increase the functionality available to the user. I feel the only site with better online tools is Quicken.

Q: How many people visit the site as compared to the reach of SmartMoney Magazine?

Tosto: We get approximately 60 million page views per month. About 1 million are unique visitors. About 12 pages are viewed with each visit, and an extremely high average of 22 minutes are spent on the site each month per visitor. SmartMoney magazine has a circulation of about 800,000 per month, with about 90,000 of that sold on the newsstand.

Q: How do you drive that kind of traffic consistently without spending enormous amounts on advertising?

Tosto: Again, since we have existing, strong brand equity, we do not feel the need to engage a global advertising agency to get the word out, and spend massive amounts of money on campaigns that will not yield us traffic that we could otherwise build slowly, all the while offering better and better quality content.

We did buy email lists in September 2000 and started an email campaign effort, with our Retirement Newsletter. It worked extremely well, as we broke the 1 million unique visitor mark. We were surprised with the success, and may continue with such a strategy in the near future.

We did merchandising campaigns. On Tax Day last year, we handed out 10,000 SmartMoney.com calculators. They cost about $1 apiece, and I am unsure if we'll do it this year. We also handed out about 10,000 flip-flop beach sandals on the Hampton Jitneys over the July 4 weekend. They cost about $1.50 apiece.

We also engaged a company called Personify to do clickstream analysis, so that we know how each campaign is working out. Partnerships may increase; we signed on with Yahoo! Finance last year and it is going well.

Q: How much cross-promotion do you do with the magazine?

Tosto: We do not always think that the relation to the magazine will get us more users, but in November 2000 we did try cover-wrapping subscriptions to the magazine with a heavy cardboard, touting SmartMoney.com. We had a good immediate spike of about 10% in site traffic. I do not want to rely on the magazine to bring us users, but we will try this strategy again in the future.

Conversely, the magazine has used SmartMoney.com to sell subscriptions. They get about 6,500 new subscriptions per quarter off the site.

Q: Is your revenue stream from advertising only?

Tosto: No, hardly the case. Curiously enough, SmartMoney.com made more money in 2000 from licensing technology than from advertising.

Most are unaware of this, but SmartMoney.com has developed a proprietary analysis technology that we sell as an ASP to other companies. And not just to other financial services players --- we even licensed the technology to the Smithsonian in Washington, DC. We feel that this can be our differentiating factor, and even our tool for survival, as pure-advertising financial content sites will either shut down or be acquired in the near future. SmartMoney.com has the revenue model to survive in a marketplace that hasn't been particularly rewarding or forgiving to advertising-only companies.

Contact Tosto at ltosto@hearst.com