The Week’s Agenda: Elmer Season

After the dot-boom and the dot-bomb came the dot-calm. We’re all looking for a way out of it. It’s vewwy, vewwy quiet.

It’s not just those in Internet advertising who are looking for a way out. A recent eMarketer report indicates that the take-up of broadband service seems to be slowing. Even those people who want the service have complaints.

That’s important, because broadband buyers are more likely to buy other things online, according to a recent report from Centris. They’re also more likely to buy extra computers and home networks, EarthLink spokesman Arley Baker told me last week.

The problems are obvious. Most broadband content is illegal, or so many Napster users have concluded. Corporations and universities have cracked down on the use of the resource with “acceptable use” policies and long disclaimers on emails. Libraries and schools can offer only a censored view of the Net, based on the latest U.S. law.

In response to the advertising slump, more and more Web sites are pulling their content behind firewalls and cash registers. In the short term, the likely result will be another leg down for the whole market as many users reject sites’ demand for cash and just go offline.

At the point of “no sale,” many Web sites will fail. They’ll decide that advertising didn’t work, that no one wants what they were selling, and just quit.

That would be their mistake and their loss.

What we’re seeing this summer, in fact, is just the first stage of a grand negotiation. Buyers and sellers of Internet services and content have placed themselves on opposite sides of the table. The buyers want everything for nothing, the sellers want to let it go only at their price.

The key to victory is flexibility. This will not be a one-price market.

Sellers should start by acknowledging that price tiers already exist. You get one price for run-of-network ads, another price for targeted ads.

Once you induce users to register (make them “members” of your site), a cookie is all you’ll need to give advertisers two sets of rates. One rate is for reaching whoever comes by. The second rate is for reaching the advertisers’ target market, one with a reach and size that can be verified and even audited.

Since you already have two tiers, how about two more? When you try to sell your content, how about offering one price for members and a second, higher price for nonmembers?

Now you have four groups of users, each of which you can target and negotiate with separately. What new products can you offer your paying members that will sustain their interest? What new services can you offer that will encourage membership? Get the dialogue going.

Create new offers for your paid tier, advertise them, then test the advertisements. Create lots of offers and lots of prices, then test them all.

What you’re looking for is homegrown market research that will tell you what people are willing to pay, how many people are willing to be identified with you, how much of the market you really reach, and how much market potential you really have.

Just remember that this is a process. It starts with registration and an upsell, but it doesn’t end there. You aren’t offering content, you’re building a product.

You can argue all you want about whether this is rabbit season or duck season. Or you can take this opportunity to begin the work of negotiating with your market. You can find your members and buyers, you can take a census of your Elmers, and you can make this your selling season.

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