The Profitable Web Site

A few years ago, DLG Media Holdings, publisher of regional titles Philadelphia Style and DC Style approached the Web like many publishers—as simply a billboard for the print magazine, with a “subscribe” button and content updated every two months. It was a lackadaisical approach that prompted little response from readers and advertisers—despite costing a mere $4,500 to build, PhiladelphiaStyle.com hadn’t turned a consistent profit in five years.

COO Dana Spain-Smith knew redesigns were needed. Her first two attempts with marketing design and technology firms went bust. “The first company didn’t have the foresight as to what was the next big thing,” Spain-Smith says. “The second was better but they produce the same template over and over. We wanted somebody to say ‘Podcasting is great but the next big thing is…streaming video.’”

DLG tapped 03 World LLC, a Philadelphia-based design company with the goal of re-launching Web sites that could be standalone entities, beginning with DCStyle.com. “I wanted something where you didn’t need to know what DC Style magazine was to log onto DCStyle.com and have a full user experience,” says Spain-Smith.

Developing a content management system that permitted the magazine staff to update content on the fly was the priority, while newly launched ACconfidential.com offers podcasts and video. “People want information now—if they have to send an e-mail to us and we can’t get to the site right away, it could take a half day or full day to put it up,” says Spain-Smith. “If you’re going to have stagnant content, no one’s coming.”

Most importantly for the publisher is database building. For DLG, that meant revamping its listing section. “Originally, we thought we’d give advertisers added exposure through the listings but people weren’t looking at them because it was fairly cumbersome,” says Spain-Smith. “Now it’s starting to look like magazine content. We did away with that when launching AC because that’s not what the Web is for. It’s not for people sitting for hours in front of the computer. It’s snippety, digestible info.”

DLG invested $28,000 in the redesign of DCStyle.com, with another $4,000 to $5,000 for certain functionalities. ACconfidential.com was built from scratch for about $15,000. The difference between the two was that DCStyle.com involved a lot of trial and error, according to Keith Scandone, partner at 03 World LLC. “We started with a template then had to build the back-end,” he says. “We did so much tinkering that it got pricey. A good Web site shouldn’t cost more than $25,000 to $30,000.”

Traffic for DCStyle.com grew to about 15,000 unique visitors per month and 200,000 page views per month. The site is close to being profitable, while ACconfidential.com will be profitable by the end of the year, according to Spain-Smith, because DLG has finally figured out what to offer advertisers. “It’s not all about clickthroughs and page views—we were so caught up in the Internet lingo that we didn’t really understand,” she says. “It’s about reaching the right audience with sponsored newsletters and targeted promotion of the advertiser’s messages.That’s what really counts.”

The Tao of Being

Second-to-Market

Enthusiast publisher Harris Publishing found itself in a similar predicament as DLG. “Traditionally, at Harris, the Web sites have been derivative of the magazines,” says Web director Jason Brightman. “Like every other magazine publisher, they thought it would hurt magazine sales. Slowly they came to the realization that the Web and print don’t contradict each other, the two talk about different things.”

In March, Harris redesigned the site for XXL, a 370,000-circulation hip hop magazine. While the Web site previously featured teaser copy for the latest issue, the rise of several prominent hip hop Web sites forced Harris’ hand. “We were seeing dollars moving from print to these online sites and we knew we’d have to do more in this space,” says Brightman. “Those online dollars should be ours.”

Today, XXL.com has constant content updates, including music. “It’s all streaming but it’s contextualized,” says Brightman. “We’re not just putting up the latest 50 Cent song. Everything is very editorial.”

Previously the XXL site was getting around a quarter million unique users and two to three million page views per month. In May, the site drew over eight million page views and more than half a million unique visitors. “It’s starting to become a real number for advertisers,” says Brightman. Now Harris has a dedicated staff selling directly to brands such as Nike and Reebok. “The new site supports more standard ad sizes,” Brightman adds. “We’re doing more custom things. It’s all about programs now. The old site would give away ads as value added. Now we don’t give away anything on the Web site.” Advertising clickthroughs have increased by more than 100 percent since the redesign.

The architecture of the site now includes Macromedia Dreamweaver from Adobe. “There are no tables, which makes it a lighter site and faster loading,” says Brightman.

Only one new editorial person was added while existing Web staff did the design and maintenance. Without counting the additional editorial person, the redesign was done without any new costs. “We didn’t add any hardware for launch but now that we’ve been up for 12 weeks we’ve gone from one server to five,” says Brightman. “It’s a good problem to have.”

The new XXL site was profitable in April but since the company had to expand the number of servers in May, it was a little in the red, according to Brightman. By June, the site should be profitable again. Before the redesign, XXL.com was probably only doing $5,000 or $6,000 in revenue per month, he says. Now that’s gone up “several hundred percent” and Brightman says that conservatively the site should generate $250,000 in revenue for the year.

Brightman cautions publishers that are trying to jumpstart their Web program to not invest heavily into something that will not be a one-time expense. “I see a lot of publishers investing too much in technology, particularly now with the popularity of mobile channels,” he says. “It’s not unlike the Web five or 10 years ago. If you invest a lot in technology, a couple years down the road it will be outdated. Look to open source, proven systems that offer flexibility. Companies try to do too much all at once or they try to have every available feature. When you come down to it, it’s just like the print world. It’s good to have bells and whistles but they won’t build an audience. Having relevant, compelling content will.”

Don’t worry about being first-to-market. “Harris is very happy to be second-to-market and let other people spend money on figuring things out,” Brightman adds. “For the whole dotcom boom-and-bust, Harris didn’t lose any money. The stuff they’re doing now would have cost hundreds of thousands of dollars five years ago and now it costs us virtually nothing. They’ve always taken a very slow approach until it can be done profitably. Harris is not Conde Nast, we don’t have a five-year plan to build profitability. If the first issue of a Harris magazine does not make money, there is no second issue. It’s a similar approach with the Web.”

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