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Free is a Great Word, But It Doesn't Pay The Bills...
By : Terry Dean
One of the most recognized and endorsed types of online
businesses has always been the "Free Content" web site.
A "Free Content" web site is a site which basically gives
away information or free tools to generate a large audience
or a large community of users.
If you were to listen to some web experts, you would think
that all you should do at your site is give away free stuff.
These "experts" have the idea that if you give away enough
stuff for free, then you can build a site with loads of
traffic. You can then sell advertising for millions of
dollars.
There is only one problem with this idea.
If all of the traffic at your site is only there to pick up
free stuff, then they won't buy anything from the
advertisers.
The advertisers lose money. Eventually the advertising money
dries up and you don't have a profit model for your site
anymore.
Only the top 100 or so web sites on the net are able to
currently make a decent profit selling advertising space to
their audience.
The rest of the millions of sites out there following this
model are quickly finding out that just having free content
is not enough to build a successful Internet business.
Yahoo.com is an example of a successful site with free
content following this model. They have a directory,
articles, news, weather, chat, forums, and everything else
you could possibly imagine for a free content site.
Yahoo is the King of Content sites. They have been around
since the early days of the Internet and are one of the few
major corporations who actually earns a profit online.
Yet, even they are considering changing to a Paid Membership
Model For Some of their Content:
Am I suggesting that you should never give away freebies?
Not at all...I still use quite a few freebies of my own
including this article you are reading now.
What I am suggesting is that you shouldn't be giving away
freebie after freebie hoping to just build traffic at your
site.
Every freebie you offer should have a specific goal in mind.
In other words, you should be thinking about how this
freebie will generate more customers for products and
services you are selling.
Below are two ways to turn web content into profit...
Model #1: Joint Venture Endorsements
Instead of just selling banner ad space or text ads on your
site, use that same space to make deals with companies you
feel good about recommending to your customers.
Then, do personal recommendations of these companies
products or services. You will find that the response rates
they will receive from a personal endorsement from you will
be three to five times what they would have received just
buying ad space from you.
This will turn your dead ad space into a cash generator. In
most cases you will also be receiving a lot more money
through doing these joint venture deals than you could have
ever received selling out the ad space.
You may have sold ad space at a price of $20 per 1,000
impressions...if someone was willing to pay that. By
signing up with an affiliate program and personally
endorsing them, you will be able to make much more than this
without worrying about having to sell out your ad space.
For example: If you signed up with an affiliate program
paying 30% on a $100 sale, you would get $30 per sale. If
the endorsement you gave only gave them a 5% click through
rate (very low for an endorsement) and a 5% sales rate, you
would be having 2.5 customers per thousand impressions for a
total of $75 for the same ad space.
This would have been done without ever having to worry about
dealing with advertisers, credit cards, or anything else.
The affiliate owner would have taken care of the worries for
you.
If you have a high traffic site or some type of other
leverage, you can also make special partnership deals with
your endorsements.
Instead of just signing up for an affiliate program, contact
a merchant who has a product you know your customers will
love and make a special deal for them.
Get the merchant to offer a discounted price, an extra
special bonus, or some other type of offer to your customers
only. Then your response rates will be much higher at your
site than just the regular affiliate program link.
Model #2: Paid Membership Sites
This is the next eventual step for online content. General
information such as news, weather, etc. will always be free.
Specific and highly specialized content has started moving
over to a paid membership model.
Instead of giving away their hard to find content for free,
membership sites now charge either a yearly or a monthly fee
for access.
Most of them charge anywhere from $39 to $4000 per year or
$9.95 to $150 per month just to see their cutting edge
content. The more specialized and valuable the content, the
higher of a price you can expect to pay.
For example, if you planned to join a "Day Trading"
membership site, you can expect to be paying near the upper
limits of the scale at $150 a month or more.
If you joined a "Brittany Spears Fan Club" you could expect
that to be at the lower end of the price range.
Either way, you can expect that more and more sites are
going to follow in the paid membership path.
Some people don't believe paid memberships will last, but
they also originally didn't believe people would pay for
cable TV.
TV Networks were originally free. Then cable stations came
out and the major networks of ABC, NBC, and CBS thought it
was an absolute joke. They didn't think anyone would be
willing to pay for something which was originally free!
How many US customers aren't paying for some type of cable
or satellite service now?
Information on the Internet is going to go in the same
direction. General information will always be free, but
highly specialized up to date information is going to cost
you.
If you can become the producer of this type of information,
then a paid membership site will be the best way for you to
profit online.
Terry Dean is the webmaster of
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