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Section Six: Projecting ROI



Rory J. Thompson By Rory J. Thompson
07/01/2008

One of the great advantages of Internet media is the vastly superior ability to measure. You can measure everything: Traffic, visits, uniques, impressions, and more. You can track ad performance, stories read, visits from Russia, if you like. You can develop circulation, register attendees to events, capture names for marketing, capture leads for advertisers. And in a sense, it’s much easier to measure the return on your investment with a variety of benchmarks, whether traffic or revenue.

Magazine publishers appear to have realistic expectations for achieving profitability. According to the FOLIO: study, nearly half of the respondents (49 percent) said it took them at least a year to become profitable. Of this amount, 17 percent said they did not see profits for two years or more after launching the site.

Colleen Daly, publisher of Computer Shopper and ComputerShopper.com, appreciates the value of careful measurement. “With advertisers, they measure ROI in various ways depending on their goal. We have campaigns to measure brand exposure, such as the time spent on site and the quality of the value to the user,” she says.

Her parent company, SX2 Media Labs, knows that ad buyers are focused on strong returns for their investments. “Different advertisers set different goals; they build campaigns around those goals and measure them to optimize them,” she says. “The advantage of online is that you can make adjustments quickly with measurable results.”

That hasn’t been a problem for the folks at ESPNtheMag.com, according to Gary Hoenig, general manager and editorial director of ESPN publishing. Hoenig was able to leverage the value of the ESPN brand along with ESPN the Magazine when his company launched its Web site this past February, and his numbers have been strong from the start.

He sees that success continuing. “The money is out there; other publishers who’ve yet to make this commitment envy the multiplatform strategy. There is such a stampede to digital because advertisers see it offers a tremendous service,” he says.

Josh London, General Manager of Online for SX2 Media Labs, also saw the value of measurement when ComputerShopper.com launched. “How we evaluated it was, did it produce enough revenue in a profitable, cost-effective way in a short amount of time? It’s an origin issue; there is no physical cost, no postage, no ink.”

The effort apparently paid off quickly. “It only took one quarter” to be profitable online, London says. “We’ve been tremendously fortunate because of the type of publication and the type of audience we attract; there’s a huge audience of both readers and advertisers.”

Still, even with that success, London acknowledges he might have made one adjustment if he had it to do over. “In evolving our print-centric effort to a Web-centric one, I’m not sure how much faster we could have gone. But if we could have, we would have sped up that evolution,” he says.

London is pragmatic about his success. “Adding a million more page views is incrementally an expense smaller than adding a million more readers to print; it adds so much profit, it’s really a no-brainer,” he says. And that, in a nutshell, sums up the benefit of establishing a strong digital presence in the face of dwindling print readers and ad-page buyers.

Or, as London succinctly characterizes it: “We’re not particularly sexy; just smart.”

Introduction
Section One: Setting Objectives
Section Two: Projecting the Revenue Opportunity
Section Three: Evaluating the Applications, Features and Software You Need
Section Four: Evaluating Staffing Needs and Whether to Hire Within or Outsource
Section Five: Setting a Budget

Rory J. Thompson By Rory J. Thompson
07/01/2008







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