How to fix About.com and diversify its online revenues
About.com's recent revenue challenges are a great lesson to the rest of us: Relying on one revenue stream is a recipe for disruption and decline. The New York Times' reported decision to sell About to Answers.com for $270 million ($140 million less than they paid for it) is evidence of how far the site has fallen.
The good news for About.com (and the rest of us) is that there are more options now than ever before to help foster revenue diversification.
1. Kick the
heroin AdSense CPC advertising addiction
According to The NYT's 2011 annual report, 95% of About.com's revenues were from advertising, and 56% of advertising revenues came from cost-per-click (CPC) advertising. Since selling Sprinks (an AdSense competitor in the early 2000s) to Google, About.com has been an AdSense junkie.
Every move at About.com is viewed through the prism of its impact on traffic and CPC revenue. Display ad sales execs complain privately that Google is more important than their clients, even though their clients are willing to pay a premium.
Google's CPC advertising is facing several competitive forces that are creating a downward trend. Social media and mobile are both creating massive amounts of new inventory, pushing CPCs lower and lower. The only way to combat lower CPCs is to grow traffic, but About.com's Guide model (one person owns a topic on their network) faces an uphill battle against the content farm approach, which can scale content creation on a subject to hundreds of writers.
The upside? Rumor has it that About.com's contract with Google is up this fall, making it a perfect time to buy and renegotiate terms.
2. Embrace audience data as a revenue stream
About.com has 60 million unique users in the U.S. and 108 million worldwide, according to The NYT 2011 annual report. While advertisers may have concerns about the quality of content and lack of brand impact from advertising on About.com, they certainly would see value in the data that About.com collects about its visitors.
Because so much of the network's traffic comes from SEO, users primarily come to the site when looking for something specific. The cookie of the user who came to an About.com page via a search for "best sports cars 2012" should be worth more than someone perusing Forbes and reading a story on Tesla.
About.com could benefit significantly from launching a private data exchange. If their traffic is so good at generating clicks for CPC advertising, their data should be equally good at generating clicks on display advertising. It exponentially increases the scale of their business and overcomes the challenges related to advertisers' discomfort with About.com as a branding environment.
3. Wake up and smell the social media
It is amazing to me that a company that gets search so well is completely lost about social media. With article pages designed circa 2003, there is no way for the audience to like or share content. You cannot follow an About.com site without searching for it on a social network.
While it is true that social media widgets can slow down page loads (decreasing search traffic), if you weigh that against the value of an ongoing relationship with an audience member, plus the influence that relationship brings to the advertising conversation, you still want to encourage social media consumption.
4. Recognize that About.com is an SEO asset but a brand liability
There is no doubt that the About.com domain has tremendous SEO juice. However, the downside is that all of its Guides (writers) are lumped together, creating the perception that About.com is not a high-quality content player. Having been an About.com editor (1999-2000), I can tell you that there are plenty of amazing Guides with tremendous credentials, experience and passion. They include:
- Urban Legends: If you ever heard someone tell you that a friend of theirs saw something and you don't believe them, David Emery can help you out. His urban legend debunking is organized by topic and timeframe so that you can prove your friends wrong on the spot.
- Pregnancy: Robin Weiss has more letters after her name than anyone I know. She had the largest pregnancy site on the Web for many years and continues to produce quality content.
- US Government Info: Robert Longley has been at the helm of this About.com site since 1997. His well-organized grants and assistance page is a great example of service journalism.
- New York City for Visitors: This is one of my go-to resources when friends or family are visiting New York. [Full disclosure: Heather Cross was an Editor for About at the same time as I was.]
These sites would benefit from "graduating" from the About.com network to become independent About.com brands. It would help the network position itself more like Federated Media, SAY Media or Glam Media. As high-traffic, high-quality sites, they could have a different content and sales model, providing a rich environment for premium ad dollars.
5. Develop a commerce business
Women account for 58% of About.com's audience, and 94% of them shop online, according to their media kit. Allowing women to shop within About.com's network would seem like a natural extension of the brand to its audience. About.com has dipped its toe into commerce, partnering with F+W Media on NetPlaces.com to sell F+W's books. However, that is still outside of the About.com domain itself.
Former About.com exec John Kaplan seems to think this model would work, as he launched OpenSky.com, a site whose content model borrows substantially from About.com, but whose revenue model is focused on commerce. Brandon Holley, editor-in-chief of Lucky Magazine, has enhanced the brand's relationship with its readers by integrating e-commerce into its digital offerings. (see video below)
In the late '90s and early 2000s, About.com was an innovator. It launched Sprinks before Google launched AdSense. It had an ad network in 2000 called Luna. It tried to put a stake in the ground as a platform buy, similar to what Twitter and Facebook are doing. But, after selling Sprinks, About.com stopped innovating because the margins were good and helped offset challenges in the print area of their business. Under digitally focused owners, I expect to see the company find its mojo and innovate once more.