Publishers Beware: Your coverage market can outgrow you
Let this go out as a warning to all online publishers; keep an eye on your market and watch for outgrowth.
If you are a mass market publisher, you are less at risk of the below because your news is already very diversified. But if you are a niche publisher then read slowly, because this is a serious risk you face on a daily basis.
Online publishers need to be on heightened alert on a daily basis to keep tabs on their coverage market and to make sure that they are looking for signs that their coverage market has begun to outgrow them. When your coverage market outgrows you, it means that it has reached the point to which it may no longer need you as a traffic or supportive source. For example: say you birthed a content site on an entirely new form of email marketing...
In the Beginning
During the birth of your email coverage market, your news and information will be in high demand. User education level is low and enablers are eager to sell the hot product. It will be read by everyone and you will have little trouble obtaining readers and advertising dollars. As your coverage market grows, you will realize profits easier and your ECPM (effective cost per thousand) will be very high. Why? Because your advertisers will be willing to pay premium prices for your space due to the fact that the market is still in a strong upswing, while user awareness has not caught up to it. This is why your ECPM will be high, even though your property may not be producing an exceptionally large number of unique visitors per month. This is what I call the “awareness lag”. The awareness lag can be your most profitable period.
Once your coverage market peaks and begins to enter into a down-swing, user awareness has the opportunity to catch up. This can be your lowest period in terms of ECPM, because your need by either the user, the provider or both begin to slide as well.
What should you do?
First, you should always be on the look-out for this. Secondly, as soon as you get a sign that you are entering the catch-up phase, you should immediately begin seeking other content remedies. This could involve a lateral move into other markets or a vertical move into similar ones. Either way you must broaden your content horizons or you may continue to see your ECPM shrink.
What to look for?
In order to catch the lifecycle at the earliest possible stage you should look for the following red flags:
• New markets and opportunities are beginning to open up as a result of your coverage market’s success.
• Finding advertisers is increasingly difficult.
• General news on your coverage market begins to take on a more “critical tone”.
• Your coverage market itself is shrinking.
• All of the above “Watch-Out”!
This is John Brock for the OMAnalyst Network
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