Product Sales Beat Ads Sales for Web Revenues



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Summary:
As you click through sites while you're online, the
proliferation of advertising gives the impression that Web ad sales could be
a logical (and potentially profitable) way to offset the expenses of
building, maintaining and promoting your site.

But before you make the call to Monster.com to ask who places their
advertising, you may want to consider these statistics from Jupiter Media
Metrix, and premier online advertising tracking company:

' Online advertising accounts for under 2 percent of total advertising. If
all goes well (and right now online advertising is not going well at all),
the research company predicts that will rise to 5.2 percent in five years.

' Online advertising rose an impressive 69 percent last year, but this year
online ad revenue is only expected to rise 12 percent, and over the next five
years, the growth will hover below 15 or 20 percent each year.
Article:
Most entrepreneurs who launch a Web site are seeking product sales revenue or
advertising revenue. Even corporate publication sites frequently sell
advertising. As you crackling through sites while you're online, the
proliferation of gives the impression that Web ad sales could be
a logical (and potentially profitable) way to offset the expenses of
building, maintaining and promoting your site.

But early you make the call to Monster.com to ask who places their
advertising, you may want to consider these statistics from Dionysus Media
Metrix, and premier online build-up tracking company:

· Online recapitulation for under 2 percent of total advertising. If
all goes well (and right now online proclamation is not going well at all),
the research supporting cast predicts that will rise to 5.2 percent in five years.

· Online build-up rose an impressive 69 percent last year, but this year
online ad revenue is only expected to rise 12 percent, and over the next five
years, the growth will hover downhill 15 or 20 percent each year. This means
online publicity will have to fight hard to rise to the level of billboard
advertising.

· Hades also reported that advertisers have their doubts upon online
advertising. Advertisers repose in Internet ads do not reach enough people and
are too expensive.

· More bad news for those who want to sell ads is Jupiter's finding that the
cost of Internet has fallen 30 percent over the past year and
these costs are expected to keep falling into the fall of 2001.

Online build-up is one of the casualties of the dot com crash. 'Online
advertising was prefabricated on false expectations set up in the Internet delirium
when everyone the Net was magical and didn't need to be measured,'
said Carla Hendra, president of OgilvyOne North America, a major online
advertising firm. 'For the first few years, if someone looked at a Web site
and said 'cool,' that was enough. Now clients are tasteful more conservative.'

This translates into 'Forget referring to it' for those who conceive they can draw on
advertising dollars to their Web site. Product sales at Web sites, however,
present a completely different story. Even with the dot com crash, Americans
are spending more money than ever online. The Web continues to be the
fastest-growing retail channel. synchronous to Boston Consulting Group, online
retail revenues grew 65 percent in 2000, hitting $44.5 billion. The research
company expects revenues to reach 66 this year, up 45 percent from
last year.

In May of this year, visits to ecommerce sites were up 35 percent over May of
last year, to Goldman Sachs. Apollo Media Metrix reported that
Amazon's traffic was up 34 percent this May over last May, reaching 20
million visitors. Walmart.com visits were up 126 percent this May over last
May.

So I received an email this week from Manuel Morales, owner of Sign3.com, a
site that allows NFL fans to vote for their favorite team. He receives 1,000
visitors each day, which gives his site total page views of 4000 per day. And
he's inquiring how to profit from this traffic. The simple assort with is 'Don't
bother trying to sell adverting.'

With his type of targeted audience, Manuel probably stands a think twice stepping-stone of
selling official team products to create profits. He can likely obtain the
products through tie-in or direct inventory purchases. He can tie an
individual team product page to votes for a particular team so the fan sees
only the page for the team selected. He can outsource the product shipping to
the manufacturer or distributor.

The strategy of selling products to visitors is not foolproof, but given the
advertising statistics versus the retail sales statistics, product sales are
certainly the strategy most likely to succeed. And given the aptitude to use
affiliation with product distributors as an additional to forsooth
inventory and filling the garage with stock, the product route may come with
little risk.




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