Registration Greed Isn’t Good

I recently wrote an article about information greed — this is when e-commerce sites hold necessary info hostage until they’ve got your credit card number. The feedback I got showed that I really struck a chord. But why pick on only e-commerce sites?

On content sites, information greed manifests itself as registration greed. I’m going to play devil’s advocate to get us all to stop and think about our current businesses. So here’s my question: What is the point of having folks register to access our content?

Do We Want to Build Our Databases?

If we want people to register on our sites to build our databases, is it working? From what I’ve heard from acquaintances and the relatively low click rate on general email (5.4 percent, according to Geoff Ramsey at eMarketer), getting email from a site they registered for and never revisited is not something users look forward to.

When sites ask users to register, they typically ask for a few pieces of demographic information and often for a few preference-type items. The point is, of course, to build a marketable database. This started out as a good idea, but I haven’t seen it work too often. The targeted marketing done by holders of large databases seems to be of less and less value these days. A source at asked me rhetorically the other day, “Why do the work to do targeting when you can market to a generic list for much cheaper and get almost the same response?”

The bloom may finally be off the Internet rose; companies can no longer command large valuations based simply on the quantity of bits in their databases. If you can’t do anything good for your users, you might as well save money on storage and put your database on an Etch A Sketch tablet.

Now, you’re reading this article for free, but you didn’t have to register for it. My point is, if you’re going to give it away, give it away. Don’t force folks to register for it unless you can really serve them better when they’re in your database.

Do We Want to Make Money?

Much of the problem with making money from registrations is contained in the paragraph above, but it still deserves some thought. Ad rates are beginning to drop to the point of making an extra user a very small marginal drop in the revenue bucket. Perhaps rather than asking for registration, sites should ask for payment. Granted, not many sites could get away with it, but if you have the feeling that your site is worth something, this would be an interesting test. (The Wall Street Journal is the classic example of a nonadult site that can pull this off. It has high-quality, unique, necessary content and a strong offline presence that operates on the same business model as its online presence — subscriptions.)

I have a suspicion that everything online can’t be free forever; someone will have to either devise a workable business model or start charging. I have seen data that both agrees and disagrees with my suspicions.

A sensible mix would seem to be logical. Online research firms (Jupiter and firms of that ilk) offer some limited free info, but to get more, you must pay either a subscription fee or a fee for each report. The important thing is that registration at one of these firms is giving it money and is not a futile exercise for the user or the company. You give some stuff away for free, but offer a paying registration for the rest.

Again, you must have important, unique content to support this. Perhaps that may mean that the sites with unimportant, generic content will eventually fall away and the others will go on to be successful. There is hope. I just read that CBS’s online properties are slated to be profitable by the end of 2001.

I’ve always maintained that the Internet is all about the free trade of information. But that is not to say that it’s about the trade of free information. Where else but online would we expect to be able to walk into a store, fill our carts, and walk out without paying? (I believe government sites, though, should be free and registrationless. We pay enough in taxes for that small favor.)

However, until the day that info producers get compensated online, think about whether your registration requirements are getting you somewhere. If not, it’s like putting a short wall in front of the store entrance. It does you precious little good and just frustrates users on their way in.

Related reading