RE: UKNM: Communities: Fact or Fiction!

[Lee Bryant]

Hello Charles,


You have raised a very interesting question, which I feel hinges on the

following paragraph:


"His response which was that there are no good examples of community

sites which make money and that as far as he was concerned, building

Website for corporate clients was where its at and where it will be at

for the foreseeable future. "


Somebody who has been "making Websites for blue chip clients for 4�5 years"

will often tend to see the future being dominated by more of the same; but

many people would disagree strongly with what seems to be a narrow-minded

attitude. Anyway, what do they mean when they talk about sites which makes

money. Even for "blue chip clients", immediate ROI in monetary terms is not

usually their only aim. It is about quality of interaction, loyalty, trust

and (for many more years at least) about market positioning. When your

contact talks about making money, I presume (s)he means making money for

themselves by producing Web sites rather than helping the client achieve

sustainable long-term financial and other goals through delivering a quality

service.


My company is currently staking its reputation and resources on the idea

that online community building will prove to be a highly effective tool in

both commercial and non-commercial sectors. For three years now, we have

been building highly successful non- and semi-commercial online communities,

such as www.crisisweb.org (NMA finalist, 1m page views per month on conflict

prevention and resolution), www.brixton.co.uk (quoted in government policy

papers as an excellent use of IT in a social context), www.bosnia.org.uk and

others. More recently, we have also been deploying this experience to

commercial ends, and we are soon to be launching two highly innovative

projects which we are confident will make money.


Agency.com talk about relationship management being at the heart of their

offering, and this thinking is changing the face of customer-vendor

relations. Online communities will play a key role in this process, whether

they are centred around a brand, an idea, shared interests or (most

interesting in our view) "real existing" cultural/ geographic/ ideological

communities. I have no doubt that this type of thinking, which many may

still regard as inherently non-commercial, is also being picked up by "blue

chip" companies and major corporates.


Of course, what all successful online communities need are a distinctive

focus, a wide range of offerings and excellent integration of relevant

aggregated content and online communication tools. This is the best way to

meet the needs of internet market niches, who will otherwise not care about

'branded content' when that's understood as "All Saints interview brought to

you by Cellnet" (real example), or "the bland leading the brand". We also

take the view that an element of just-enough, just-in-time education

/learning / training is also a potentially powerful element in the community

mix, which can be attractive to brand owners in the right context as a means

of developing future markets.


Anyway, before I give our game away, I shall attempt to answer the questions

you set:


1. Can people think of any commercially viable community based sites?


Offhand, Xoom, Geocities, plus some consumer goods portals (e.g.

baby-related stuff)


2. Do they agree that a community site which is not just an online

version of an existing brand can form a viable basis for a commercially

successful site?


Yes. In many ways it is much easier (do you REALLY want to join Persil

online?)


3. Are there any commercially viable sites in their own right at all?


Well, Xoom, Geocities and Friend Factory seem to be doing OK (though they

follow an older notion of online community which is quite specific)


4. The million dollar question � Is there any published info on how

Websites make money with real�life�example income streams?


Revenue streams? These are the main ones, and they are common to all

successful communities and portals:


margin on online sales (selling your own stuff)

commission on online sales (selling someone else's stuff)

advertising revenue (targeting of vendor offerings to community members)

commercial sponsorship (different form of advertising, as above)

membership fees (only for some types of community)


However, a further stream is gathering pace, and that's the telcos revenue

sharing derived from the free ISP model. The freeserve model demonstrates

that businesses are now putting a value on each loyal user (or not-so-loyal

in freeserve's case). Freeserve's valuation began at �1500 pp, which

reflects its pioneer status, but this will fall. I know of one Web site (not

ISP) with a loyal user base which has reportedly received offers to buy at

$1500 per registered user.


I hope this gives you some food for thought. Just because the online

community 'meme' is more than a year old doesn't mean it is out of date.

Inventing the bicycle is not the same as learning how to ride it well.


If you want more, feel free to mail me off-list.


All the Best,


Lee Bryant

TMG Hypermedia

----------------------------------

http://www.tmg.co.uk

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Tel: +44 (171) 207 2050




-----Original Message-----

From:

ownerchinwag [dot] com

 [

ownerchinwag [dot] com]On">mailto:ownerchinwag [dot] com]On

 Behalf Of Charles

Linn

Sent: 26 July 1999 15:00

To:

uk-netmarketingmail [dot] chinwag [dot] com

Subject: UKNM: Communities: Fact or Fiction!



Last week I was speaking to an industry friend of mine (who has been

making websites for blue chip clients for 4�5 years), and I was talking

to him about 'communities'.


My original definition of a 'community' was a group of like minded

people who have an interest in common rather than a geographical

location.  My contention was that if you can create a place on the

internet to facilitate people talking about and exploring their shared

interest, then providing the design is good (technical, graphical and

informational), and the marketing is strong, then this can be used for

the basis of an internet only business, with great opportunities for

advertising, sponsorship and commerce.


His response which was that there are no good examples of community

sites which make money and that as far as he was concerned, building

website for corporate clients was where its at and where it will be at

for the foreseeable future.


This was a bit of a surprise to me.  I had always assumed that aiming to

create online communities was a sensible aim for building traffic, and

that therefore it would be a sensible part of any business model.  This

is fine for me working at Friends of the Earth as I don't actually need

the site to make money (although it would be nice) and repeat viewing

and building aloyal audience is an end in it's own right, as we want as

many people as possible to hear about our campaigns and then get

involved in them.


My questions for the list are:

1. Can people think of any commercially viable community based sites?

2. Do they agree that a community site which is not just an online

version of an existing brand can form a viable basis for a commercially

successful site?

3. Are there any commercially viable sites in their own right at all?

4. The million dollar question � Is there any published info on how

websites make money with real�life�example income streams?


I have some good ideas but I am having great difficulty filling in the

gaps and therefore difficulty in 'going for it'.


All responses most welcome


Cheers


Chas Linn

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