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Nov 21, 2002
Case Study

How iVillage is Positioning Itself to Profit (As Soon as the Economy Gets a Little Better)

SUMMARY: Ok, iVillage is decidedly not profitable, nor will they be any time soon. Why did we do a Case Study on them?

Despite the bottom line, they are using four clever tactics to sell more ads, get more traffic, and prep for the day when the economy improves. These are tactics that we think other online publishers could use to good effect right now.

It has been a long hard recession for the women's magazine category. Mademoiselle shut down after 66 years in Oct 2001, the re-launched McCalls (aka Rosie) is ceasing publication in Dec 2002, and both Ladies Home Journal's Publisher and Editor in Chief have been replaced in recent months.

iVillage faces the same tough marketplace of advertisers with tighter budgets, plus the site has the added challenge of having to convince traditional print advertisers that online is viable. (You would think that battle would have been won a year or two ago, not quite yet.)

Throughout it all Nancy Evans, iVillage Co-Founder and Editor-in-Chief, has remained strongly optimistic. "Everything is cyclical," she says. The economy will come back, and someday online will be a favored ad vehicle by advertisers smart enough to know where their targets spend time.

In the meantime, Evans and the iVillage team have to prep, on leaner budgets, to be the property that dominates its marketplace when the wheel of fortune favors the Net again.


"I can't emphasize how different this is from a magazine, it's so important," says Evans. From the point of view of both editorial and advertising, iVillage has positioned itself to be something both completely different from traditional media and utterly necessary.

From the launch in 1995, Evans felt just plopping banners around articles was not the way to go. Women, intent on completing the task that brought them online, did not appreciate unrelated banners or clicking off to a separate site. They also did not necessarily want yet more articles. Instead they wanted advice from their peers and useful interactive tools to accomplish their objectives.

Evan's team focused on building a community-based site (lots and lots of message boards surrounded by content and tools inspired by and complimenting them).

Are message boards not the kiss of death?

"You really have to know how to do it," Evans explains. "Some people thought you could just put the functionality and you're done. We have 3,000 community volunteers, we have a paid group of community managers, and our boards are incredibly well organized."

iVillage's team focus on four specific tactics to create a viable business from this content:

-> Tactic #1: Formal data analysis

Evans and her team carefully examine daily memos, plus weekly wrap-ups on the following four data sources:

a. Message board topics ranked by number of posts and fervor of discussion, plus analysis of specific words and terms used frequently.

b. Specific wording of any message that gets an unusually high or low number of clicks. "What makes a woman click? What's the common denominator for links that have been clicked on? That kind of granularity just makes anyone in direct response want to jump up and down," says Evans.

c. Quantitative data and actual comments from the week's "feedback" mail from buttons throughout the site and in email newsletters.

d. Classic site and email metrics such as unique users, pageviews, open rates, overall click rates, click paths, etc.

-> Tactic #2: Offering unique marketing solutions to sponsors

This data, plus the site's interactivity, makes it possible for iVillage to position itself as a uniquely useful marketing solution compared to other sites and media.

Which is smart. Anytime you can drive the sales discussion away from straight apples-to-apples CPM comparisons you have got a huge edge.

Several of the solutions iVillage offers sponsors are:

a. Understanding the marketplace in general

In a very real sense, the data iVillage gathers every day turns it into a combination qualitative focus group plus quantitative marketplace study. The team are closer their visitors' shifting trends and attitudes than any product marketer could be.

Instead of just offering a consultative sales pitch for ad space, iVillage's team function as a top-flight marketing consultancy on how to understand and appeal to women in general. Traditional marketers can take this knowledge and apply it across multiple media.

Evans offers an example, "Way before 9/11, it was a clear leitmotif going through all our conversation boards that women were developing a wonderful sense of humor about not being superwomen. They had just come to this collective decision that this won't be a good goal and they should begin to simplify their lifestyle, to make more macaroni and cheese."

"That idea of the need for comfort, for home, we brought to marketers who want to reach women. We told them the tired superwoman imagery wouldn't play as well now as it had earlier."

b. Brand positioning research

"Traditional advertisers can use us to reposition themselves. It could be a repositioned tagline. It could be their advertising messaging," says Evans.

Example, Kashi cereals is using iVillage's boards (and soon other parts of the site), asking visitors to sample different ways to eat their cereal and what they do and do not like about it. Then they are using the feedback to refine their brand positioning and messages before investing in larger campaigns.

c. Copywriting research

As direct response marketers know, sometimes a tiny change in wording can make a big difference in response rates. iVillage helps advertisers test specific wording, again to help them create a more effective campaign before it is rolled out in a huge way in multiple media.

d. Brand interaction without the pain

Although consumer packaged good brand marketers know sales will go up if they can get customers to interact with the brand itself, they are often not equipped to handle direct consumer responses.

"My direct customers are distributors, I'm not set up to handle it if thousands of consumers started emailing us," one explained to us recently.

Evans says, "You can often get more customer engagement with the product and that kind of participatory-ness faster through a place like iVillage than if you reached out one-to-one yourself."

Example, Pepperidge Farm's Milano Cookie campaign on iVillage asked visitors to submit notes describing what a 'Milano Moment' was for them.

"It was put in a number of places, in banners, in text links, and we created a mini-site for them that lived on iVillage. Within a couple of weeks about 40,000 women wrote the most wonderful little essays," says Evans.

e. Contextual commerce

Evans feels strongly that the church and state relationship between ads and editorial that is important in print is far less so on iVillage, which makes contextual commerce possible as long as ads are not misleading.

"Women feel that the marketers are there as part of the community. So if you are in the baby area and there are baby products, she perceives it as a solution. It's not as if you're hawking diet products. It's not in her way."

Evans continues, "As long as you tell women what's going on, they are really quite cool about it."

-> Tactic #3: Keeping traffic high

Just as the iVillage team uses the data to help advertisers get better results, they also use the data to create content that's more compelling to visitors and email newsletters that are less likely to be deleted.

Example, when iVillage launches a new site section, they play with the exact wording of the name of the section to see what will be more compelling. Evans gives a hypothetical sample, "It could be the word 'disorganized' isn't as effective as 'cluttered' to get participation in our get-my-life-together challenge."

Also, the site has learned that annual events (such as that annual challenge) begin to "have legs" to drive more traffic.

The team has tested lengths and formats for the email newsletters the site offers since 1995 to learn what will get the most opens and clicks. Plus they continue to tweak and test the various newsletter sign-up forms on the site to see if changes convert more visitors to sign-ups.

-> Tactic #4: Diversifying revenue streams

Evans recommends the "three legged stool model" to all online publishers. "If one thing is not working, then you've got another two to fall back on. Winning at revenue is getting the mix right."

iVillage has tested and/or is in the process of testing the following non-traditional revenue streams:
- Short subscription products such as several-week courses
- Paid links listings through Sprinks' service
- Printed books of collected "women's wisdom" from the boards
- A line of vitamins
- Paid single content offers such as personal astrology reports
- A branded ISP
- A satellite TV network The Newborn Channel viewed in 1,100 hospitals


iVillage added 40 new advertisers in the last quarter, including many traditional offline brands that may be cemented into more profitable relationships when the recession is over, including Century 21, IKEA and LEGO.

Site traffic continues to soar, with 19% more pageviews during the last quarter than during the same quarter in 2001. As of September, iVillage was ranked as the 13th most visited destination on the Web with more than 20 million unique monthly visitors according to comScore Media Metrix.

Evans has learned that shorter newsletters containing graphics that look "like a page of iVillage sent out to you," are currently the best way to get high open rates. In fact iVillage's newsletters for particular health conditions routinely get astonishingly high 80% open rates.

However, she cautions that what works in newsletters is just like what works with Web content, "You've got to constantly stay on top of it. You don't get a silver bullet and then you can sit back."

Although the Company has slowed its rate of loss considerably this past year, iVillage is not profitable, nor will it be in the near future.

Evans is philosophical about this, "There will always be quarters that go down. I've been in business long enough to know it would be foolhardy to think otherwise. One of the most important things to teach employees is there will be bad times."

However she adds, "You cannot have this many women, 20 million, you cannot be the 13th largest Web site on the planet and then on top of that have the love and trust women feel for us like they feel for Google and Yahoo, and not have a business!"

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