Make Your Own Category

I have, on occasion, been wrong.

For example, in the late ’90s, I couldn’t possibly imagine the market would support another search engine, no matter how much more “relevant” the results. I figured we had all the search we needed, and Google would come and go like Boo.com (which, evidently is now some sort of travel site).

I’ve been wrong about a few other things as well. For instance, I thought ad-supported free content online would create problems. I figured two kinds of content would emerge: premium content people would pay for, and a content ghetto for everything else. The ghetto would be of lower quality, with less demand or at a lower frame rate or something. That, therefore, would make the content less desirable and, consequently, the advertising less desirable. We’d have a bunch of low-quality content jam-packed with piles of $0.30 CPM (define) ads. What a mess.

But that’s not what happened. Certainly there are opportunities to pay your way out of ads on some sites, but the content is exactly the same. There aren’t two classes of content but simply the chance to pay to get away from ads. And with a site like Salon, I don’t know why you’d bother. The ads are well produced and nonintrusive, and the content is identical. Salon has had its problems as a company, but it has endured by matching content and ad mix with its audience’s expectations.

But the site that really has me rethinking my position about ad-supported content is GameTap. The Turner-owned site announced a major push to capture the casual gamer market with free games supported by advertising. These aren’t crummy games, but actual, valuable games, though not top sellers.

The target is mainstream gamers, people who just can’t see paying either $50-plus in the store or a low monthly subscription fee. That certainly seems to be the secret in ferreting out the right mix of free premium content and advertising: being able to match your audience’s content expectations with an appropriate amount and type of advertising.

If people pay full price for a game or article, they expect few or no ads. Game ads work best as part of content, like the tire manufacturer whose product is used in a Nascar game. The person who buys that game is a gamer, through and through.

GameTap’s mainstream gamers are everyday people who would likely never walk into a store and buy a game. This isn’t to say they wouldn’t enjoy playing a game if given an opportunity.

The simple, clever thing GameTap has done is pick the right kind of content, audience, and advertising. If all goes correctly in this model, it will have created a brand-new category of consumers and a new category of ads. The move to mainstream may even give it a chance to reach out to new categories of advertisers.

I was wrong about the split between paid and nonpaid content. Once again, the drive toward the details reveals the pathway to a business model. The notion of monolithic content consumed by one kind of audience is gone. The long-tail notion, where digital technology allows publishers to cost-effectively make niche content available to small audiences, is clearly the new content king.

Publishers who draw arbitrary lines around content (this article is free, this one isn’t) won’t be successful. But those who sort out the right mix of audience, content, and advertiser, have a great opportunity to wiggle into that strange space online where everything seems like it should be free but clearly can’t be.

Join us for the ClickZ Specifics: Advertising in Social Media seminar on May 21 in New York.