BUSINESS PRESS: Does online publishing pay?

Consumer interest in the Net is rising, but ways of converting fashionable play into profit are few.

Consumer interest in the Net is rising, but ways of converting

fashionable play into profit are few.

Alasdair Reid takes a look at what publishers have done to turn online

magazines into a fertile ground for advertisers

‘Last year we were really a research and development department,’ John

Barnes, the publisher in charge of VNU’s dedicated online unit, admits.

‘This year we have a business plan. We introduced a ratecard in


Welcome to the learning curve. VNU may be a relative novice when it

comes to publishing on the Internet, but it’s in good company. As with

many of its rivals in the UK business magazine market, VNU’s specialist

online department is less than a year old and the company is only

beginning to get to grips with the realities of turning a fashionable

gimmick into a worthwhile business proposition. And this is genuinely

uncharted territory - the US market is maybe only six months ahead of

the UK, so there are no huge short-cuts to be imported.

So far, the main lessons that everyone has taken on board concern

editorial format and content. Matthew Doull, the associate publisher of

Wired UK, probably has more experience than most in this area - not only

is Wired at the leading edge, but he was previously involved in setting

up the Electronic Telegraph. He says that the main thing to avoid is

‘shovelware.’ He explains: ‘Shovelware is where you take traditional

magazine content and shovel it unchanged on to the Internet. To succeed

in online publishing you have to view it as a complementary medium to

the magazine.’

All of the main business magazine companies - Emap Business

Communications, Reed Business Press, Miller Freeman, VNU - say that they

realise the importance of creating complementary editorial material.

But, perhaps significantly, few feel that additional editorial staff are

necessary - extra work is to be absorbed by existing teams.

For the time being, publishers are putting most of their resource into

centralised development teams. Currently, the biggest is probably the

one at Emap. It is headed by Carol Dukes, the company’s head of online

media. ‘We have seven in the technical team and we also use a network of

freelancers,’ she says. ‘Site design is very important but we also

invest heavily in the skills that provide structural functionality - the

things that make a site interesting to use.

‘Our job is to make sites easy for individual magazines to manage

themselves because we believe that those closest to the market should

run the site.’

One of the key ingredients is interactivity, whether that means a full-

blown virtual conference or a quicker take on the letters-page format.

And where content is concerned, most business publishers have a two-

pronged approach - regularly updated snippets of news at entry level,

backed up with vast libraries of data and archive material. This is

especially true of the technical magazines - mainly electronics and

computing journals - which have been keen adopters of the new


David Craver, the UK managing director of Ziff-Davis, which specialises

in personal computer magazines, says that online publishing out-performs

print in two major ways. ‘It can give constant updates of news as it

happens,’ he points out. ‘But probably more importantly from our point

of view is the fact that it can offer extra in-depth information - in

our case, the large amounts of product testing information that we

generate but could never hope to carry in print.’

Most of the bigger companies have begun to sort out their editorial

strategies. But can online publishing ever really pay its way?

Publishers tend to be less sure about this. Few in the business magazine

sector believe that the simplest revenue route - charging users for the

privilege of accessing a site - can really work; but this year, they

have started to believe that advertising has real potential.

There are three potential ad revenue sources: sponsorship, ‘banner’

advertising and recruitment. Banners are, or will become, the bread and

butter of this sector. Advertisers pay for a strip along the top of a

page and this gives them a presence alongside editorial matter plus an

extra dimension - users are encouraged to click on the banner, which

takes them to the advertiser’s own site.

John Whittaker, the projects manager for Miller Freeman Technical, looks

after online publishing for the company’s electronics titles. He agrees

that where revenue is concerned, the industry is still feeling its way:

‘Online publishing probably isn’t making money yet. But we are learning

to provide more options on the ratecard for advertisers and sponsors and

we also believe that there is real potential for recruitment

advertising. The advantage of online recruitment is that you can use our

search engine to filter out the jobs you’re not interested in.’

But recruitment, for most magazines, will be a long haul. As Dukes puts

it: ‘While the Internet remains a minority pastime in the UK, it will be

of central interest only for technically-related jobs such as


That, of course, brings us to the greatest imponderable of them all.

Just how much of a minority interest will the Internet be? In the US,

which has many times more Net users than the UK, approximately dollars

20 million-worth of advertising revenue was shared last year by all

publishers on the Internet. That’s a tiny market in any context.

But consumer interest in online publishing is increasing. Many UK

publishers report growing hit rates on their sites - VNU’s, for

instance, is now 400,000 a month, up fourfold since last June - and the

business publishers are currently working to produce research on hit

rates and audience demographics. But until the main players come up with

numbers that are both credible and impressive, advertisers will reserve

judgment on the potential of online publishing.