How to Launch a Successful Membership Website

Transcription

Mequoda Method Guidebooks
How to Launch a
Successful
Membership
Website
By Don Nicholas
Mequoda Group
1 2 1 B o s t o n Po s t Ro a d
S u d b u r y, M A 0 1 7 7 6
phone: 800.901.3556
fax: 401.633.6057
customercare@mequoda.com
w w w. M e q u o d a . c o m
2
Copyright © 2005 by the Mequoda Group LLC
Terms of Use:
All rights reserved. No part of this report may be reproduced or transmitted in any form or
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All trademarks and brands referred to herein are the property of their respective owners.
All references to Mequoda™ and the seven Mequoda Website Publishing Models™ are
trademarks of the Mequoda Group, LLC.
Contact Information
Mequoda Group, LLC
Customer Service
(800) 901-3556
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Sudbury, MA 01776 USA
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Mequoda Group
HELPING PUBLISHERS BUILD BETTER WEBSITES
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© 2005 Mequoda Group
http://www.mequoda.com
Mequoda Library
Research Team
Mequoda Library
Advisory Board
DON NICHOLAS
Editor
SHAWN BURKE PECAR
IDG-PCWorld-MacWorld
PETER SCHAIBLE
Editor-At-Large
HEATHER FARLEY
PBI Media
KIM MATEUS
Managing Editor
ED COBURN
Harvard Health Publications
ALLISYN DEYO
Webmaster
STUART HOCHWERT
Ampere Media
CONTRIBUTING EDITORS
STUART JORDAN
University Health Publishing
LAURA PITTMAN
General Manager
JOHN ALEXANDER
ROBERT W. BLY
ALEXANDRIA K. BROWN
JOHN CLAUSEN
TERRI EDMONSTON
PETER J. FOGEL
FRED GLEECK
LARRY KERSTEIN
STEVE LALIBERTE
ROBIN NOBLES
ROXANNE O'CONNELL
ROGER C. PARKER
JANE ZAREM
Mequoda Group
3
GREGORY S. JONES
Granite Bay Media
PETER LONGO
Zinio Systems
HARRISON MAGUN
Eon Media
KEVIN MCPHERSON
Bitpipe
ELMER MEIDER
Highlights for Children
ROBERT MICHEL
Grace Intelligence Group
DONN RAPPAPORT
American List Council
STEVE SACHS
Time Inc.
BILL TANCER
Hitwise
BRYAN WELCH
Ogden Publications
DAWN ZIER
Reader's Digest Association
Table of Contents
4
Introduction
5
Step 2: Profile Information Needs of Target Customer
9
Step 4: Select Your Competitive Position
12
Step 1: Focus Your Website Product Idea
Step 3: Prepare an In-depth Competitive Market Analysis
8
10
Step 5: Quantify the Economics of Your Idea
13
Step 7: Determine the Pre-launch Startup Budget
16
Step 6: Grade the Concept—Pass or Fail?
15
Step 8: Raise Test Capital
18
Step 10: Perform a Keyword Intercept Market Study
21
Step 9: Identify Key Personnel, Partners and Vendors
19
Step 11: Create a Functional Product Specification
22
Step 13: Create & Test a Non-Working Website Prototype
25
Step 15: Prepare the Final Business Plan
29
Step 12: Prepare a Detailed Content Plan
Step 14: Conduct a Search Engine Marketing Test
23
26
Step 16: Raise Launch Capital
30
References and Resources
33
Step 17: Execute Your Business Plan and Let it Go
About the Author
Mequoda Group
31
34
5
Introduction
“
"What should
you consider when
starting a
membership
website?" The
answers are not
always
obvious, even to a
seasoned print or
electronic
publisher.
"What should you consider when starting a membership website?"
The answers are not always obvious, even to a seasoned print or
electronic publisher. Starting a new website is very different from
running an existing property. Over the past 11 years, my partners
and I have worked on over 100 successful website startups, as
well as several that were not successful. Our understanding of
website publishing is rooted in the world of print, which has given
us insight into the similarities and differences between the two
types of launches. This report will document the best practices
we’ve seen, and been part of, over the past decade. The examples
and costs we use to illustrate the best practices we've identified are
geared toward a website that will generate $2 to $5-million per
year in total revenues after three to five years.
Website publishing is different from print publishing in several
ways. While all the traditional revenue streams apply (subscriptions, advertising, classified listings and product sales), website
publishers also rely on affiliate marketing programs. These pro-
grams are revenue streams unique to the Web. The mix of revenue
can also be quite different from print publishing, with advertising
being less dominant than in magazine or newspaper publishing.
The sources used to generate website subscriptions are very different from those used to generate print subs. While print publishers
rely on direct mail and inserts cards, online publishers use search
engine marketing, affiliate marketing and co-registration marketing to build a subscriber base. Successful online publishers also
give away 10 to 20 percent of their content for free—via email
newsletters and article summaries as a key strategy.
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While this
report will not
attempt to cover
all there is to
know about
successful online
marketing and
publishing (see
Browse Topics for
the Mequoda
Library's
comprehensive list
of reports on the
topic), we will
share the 17 steps
recommended for
a successful
launch of a new
membership
website.
6
The economics of online publishing are also different than print. A
very successful B2B subscription website (like the one referenced
in Figure 1) may have 75,000 basic subscribers who get limited
content, and only 5,000 to 10,000 paid subscribers who have
access to full content. The basic subscribers are valuable, because
some percentage will become paid subscribers and they do generate some revenue from advertising, affiliate or product marketing
programs.
While this report will not attempt to cover all there is to know
about successful online marketing and publishing (see Browse
Topics for the Mequoda Library's comprehensive list of reports on
the topic), we will share the 17 steps recommended for a successful launch of a new membership website. In the process, we’ll
cover the concepts required to publish a successful website at a
basic level. For example, while there are dozens of ways to market
a website, this report will focus on the use of search engine marketing, or pay-per-click marketing. We use this method in the
launch phase for two reasons. Not only is it a major source for
marketing your website, it is actually possible to plan, execute and
analyze a search engine marketing campaign for a website that
does not yet exist. This process is often called "dry testing,"
because it allows a publisher to test a publishing concept without
actually launching the website.
To prepare this report, we are relying on our experience of launching and re-launching more than 100 subscription websites. When
comparing B2B and B2C launches, we have found them similar. A
B2B launch can be somewhat easier, since the subscriber and
Mequoda Group
“
The 17 steps
have been revised
and modified over
time, and we can
now safely say the
list is
comprehensive, if
not exhaustive.
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advertiser audiences are usually easy to define and quantify. B2B
websites also tend to have smaller circulations and fewer subscription sources. Nonetheless, the steps required for launching a B2B
website and a B2C website remain similar. The 17 steps have been
revised and modified over time, and we can now safely say the list
is comprehensive, if not exhaustive. We hope these steps make
your journey into website publishing more successful, enjoyable
and profitable.
8
1. Focus Your Website Product Idea
“
First and
foremost, you are
an information
provider—
marketing is
secondary.
Without a strong product concept, you have nothing. As a website
publisher, you are running an information business. First and foremost, you are an information provider—marketing is secondary.
So what will you provide your readers? And why are they going to
want it? Get the concept down in a simple position statement of
one to three sentences. If you can’t do it in 25 words or less, you
probably don't have a good idea. A tightly focused subject—for
instance, "restoring 1960s Mustangs" instead of "restoring Ford
cars"—is particularly important for membership websites. Your
website should be targeted to a specific group of readers who
share very specific information needs, and are willing to pay a
premium price for that information. You must also identify your
editorial competitors, both print and online. For print competitors,
you should gather at least six months of back issues. Study what
they're doing and figure out how your concept will position
against theirs. Remember, a great website offers its readers news
and reference information, making it part periodical and part encyclopedia. It can also offer a software application that is Web-based
and provide interaction between your data and personal data sup-
plied by each user. The stock portfolio managers offered by many
investor websites are just one example of a "sticky" interactive
website application.
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2. Profile the Information Needs of Your Target
Customer
“
Who - precisely - is going to
take time out of
their life for your
website? Why will
they need or want
your website?
Who—precisely—is going to take time out of their life for your
website? Why will they need or want your website? You must be
able to provide a simple and logical explanation of who wants
your services. Your goal is to locate a target market focused on
people who (1) have an established interest in what you'll be writing about, (2) are proven website users and subscribers, (3) are
part of either a growing or very stable audience and (4) are not
adequately served by existing publications and other websites. The
biggest mistake website publishers make is overestimating the
number of people who will subscribe to their website—most print
newsletters, for instance, never reach more than 10 percent of their
potential audience and many run quite profitably with only one or
two percent of the market. Niche websites are no different. In fact,
a willingness to pay for print newsletters is one great indicator of
demand for a membership website. At the same time, the interac-
tive nature of the Web has created many very successful subscription websites that have no newsletter counterparts. Dating websites like Match.com and eHarmony.com generated some $450
million in 2003 and are competing with print personals and physical dating services. Many successful websites don’t compete with
traditional print publishing. Still, there is always an offline com-
petitor that must be identified to properly understand your online
opportunity.
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3. Prepare an In-Depth Competitive Market Analysis
“
Start with a
Google search for
the keywords your
prospective
customer might
use to look for the
information and
services you plan
to provide.
Start with a Google search for the keywords your prospective customer might use to look for the information and services you plan
to provide. Note carefully the paid and the free (organic) listings.
If you find many paid listings on the top, right side of the search
results page, it may mean that customers who want this information are willing to pay for it. It could also mean that there are
online retailers, direct marketers or other non-website publishers
who will be competing for your customer’s attention. You’ll want
to create a comprehensive, competitive analysis to understand the
marketplace you’re going to enter. Start by finding all the websites
that show up on the first three pages of search results for the top
10 to 100 keywords that are associated with your topic. Explore
each website and categorize their business models (see the
Mequoda Library's Generating Website Revenue) using a comput-
er spreadsheet. In addition to website publishers, pay close attention to vendors who give away free information and services to
the customers you will jointly target.
Many of the websites you find will be run by print publishers who
are also competing for your prospect’s time and money. You’ll
need to understand their online and offline strategy. To discover
the size of their print audience, audit reports (postal, ABC, BPA),
the Statement of Ownership, Standard Rates & Data and media
kits should all be scoured for circulation clues. You are looking for
information on frequency, rate base, sources, sales levels, premium use, price, discounting, renewals and seasonal fluctuations.
Pay particular attention to the relationship between their print
magazine or newsletter and the companion website. Magazine
website publishers, in particular, are just beginning to either
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“
Once you
know who your
competition is,
comb their
websites, request
sample copies or
purchase copies of
appropriate
publications.
11
charge for access for a solo subscription (as ConsumerReports.org
has done for years) or make the website and print periodical benefits of subscribing, like Businessweek.com and SI.com.
Later, these print and online media will provide the free (and paid)
marketing access you’ll need to sell subscriptions to your website.
All the data we reference above is available online through their
own subscription-driven websites. If you’re on a tight budget, the
public library will have both the Oxbridge and SRDS directories.
Your search will begin with directories that list the media we’ve
mentioned, and then move on to collecting sample copies and
other information the publishers can supply. New York-based
Oxbridge Communications publishes annual directories of
newsletters, magazines, catalogs and mailing lists. Chicago-based
Standard Rate and Data Services publish monthly directories of
magazines and mailing lists. On the book-publishing front, your
library will have a current copy of Books in Print.
Once you know who your competition is, comb their websites,
request sample copies or purchase copies of appropriate publica-
tions. In the case of magazines, request media kits in hard copy or
access them online. You may very well be a future advertiser, so it
will become important to understand each magazine’s advertising
pricing. You’ll also find that many media kits include a wealth of
data about your publication’s market—including estimates of size
and purchasing power, plus readership demographics.
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4. Select Your Competitive Position
“
Use a SWOT
analysis to
evaluate the
websites, print
periodicals, books
and service
providers that will
be your closest
competitors.
Now it's decision time. You're looking for an opening in a market
that is robust. Use a SWOT (Strengths, Weaknesses, Opportunities
and Threats) analysis to evaluate the websites, print periodicals,
books and service providers that will be your closest competitors.
How will you be different and how sustainable is that difference?
Perhaps the best competitive position is that of the niche player.
Find a small, healthy market where larger organizations won't venture. As a rule of thumb, any business that will generate less than
$5 million in annual sales is of no interest to a corporate publisher.
Business units that small will not support the weight of corporate
overhead imposed by larger companies. This places you on a level
playing field with other entrepreneurial organizations where your
star power, enthusiasm and great execution can be enough to create a profitable Web-based information business.
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5. Quantify the Economics of Your Idea
“
This analysis
should be done
with numbers that
represent your
website in a
mature, developed
state—perhaps
three to five years
old.
We are not looking for details here, but big-picture data:
• How many paid and free members will you have?
• How much will you charge for an annual subscription?
• What other revenue sources can you depend on?
• How will you generate members and how much will they
cost?
• How long will they stay members?
• How will you host your website and what will that cost?
• How many staffers and freelancers will you need to
execute your vision?
This analysis should be done with numbers that represent your
website in a mature, developed state—perhaps three to five years
old. We'll worry about getting there later.
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Mequoda Website Publishing Model 2.0
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6. Grade the Concept—Pass or Fail?
“
You know
what's out there,
so how does your
concept stack up?
You know what's out there, so how does your concept stack up? Is
someone already doing 50 percent of your editorial idea? Or 75
percent or 80 percent? If most of your ideas already exist, you
probably need to rethink everything and return to Step 1. You can
use the model detailed in Step 5 to figure out approximately how
much revenue competitors are bringing in. Will your concept go
after that same revenue pie, displacing competitors? Will it expand
the pie, bringing in additional readers? Or will it make a new pie,
targeting a different group of readers and partners? Make your
decision to move on to the next stage: does your concept pass or
fail?
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16
7. Determine the Pre-Launch Startup Budget
“
Start with the
test phase (the
next step) and
determine how
much money and
time it will
require.
You are looking to develop a website prototype and a full, profes-
sionally prepared business plan. You'll use these to prove and finetune your concept before incurring the expense of building the
working website and developing the real content you'll need to fill
it. You'll also use your prototype and business plan to raise funds
for the launch phase.
Start with the test phase (the next step) and determine how much
money and time it will require. A complete business plan usually
requires you to perform a market test, to line up key personnel,
and to prepare and test a non-working website prototype with
potential customers. This is all in addition to preparing the financial projections and writing the business plan itself.
Adding it all together, a small niche could be tested for as little as
$100,000, with $500,000 being the average. The budget shown
makes lots of assumptions about which tasks you'll perform yourself and which you'll outsource. Keep in mind that the intense
time required might also cost you money (in lost income) if you
have to leave or curtail your current employment. While 12 to 18
months is the average timeline for a website launch, we have seen
successful ventures get up and running in six months. Anything
less would be extremely rare and would require shortcutting many
of the steps we're recommending. For very small markets with a
clear need and little or no competition, this may be the best
approach.
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17
Website Prelaunch Startup Budget
Hard
Time
Costs
Step 1: Focus Your Product Idea
Step 2: Profile Your Target Customer
Step 3: Prepare an In-depth Competitive Market
(Weeks)
3
$15,000
Analysis
1
2
Step 4: Select Your Competitive Position
1
Step 6: Grade Your Concept Pass or Fail
1
Step 5: Quantify the Economics of Your Idea
1
Step 7: Determine Prelaunch Startup Budget
1
Step 8: Raise Test Capital
3
Step 9: Identify Key Personnel Partners and Vendors
Step 10: Perform a Keyword Intercept Market Study
$25,000
Step 12: Prepare a Detailed Content Plan
$15,000
Step 11: Create a Functional Product Specification
$15,000
Step 13: Create and Test a Non-Working Website
$180,000
Step 14: Conduct a Keyword Marketing Test
$167,125
Prototype
Step 15: Prepare Your Prelaunch Business Plan
$15,000
Step 16: Raise First Round Launch Capital
Step 17: Execute Your Business Plan
Total
$432,125
2
2
1
2
6
2
2
6
8
44
Website Prelaunch Startup Budget
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8. Raise Test Capital
“
Most mid-size
subscriptiondriven websites
require modest
investments when
compared to
magazines or
other periodicals.
If you are an entrepreneur, financial support for detailed research
and market testing usually comes from three sources: your savings, your friends' savings or your families' savings.
If you can internally fund from an existing business, there are two
prime possibilities: your company's cash flow or a secured bank-
loan. For big ideas, you may find angel investors who are willing
to fund your development. The dot-com bomb has come full circle
and many companies and investors are looking for reasonable
business plans that will give them online access. Keep in mind
that outside investors experienced in direct marketing who are
available to support your launch will look for control and big
returns.
Most mid-size subscription-driven websites require modest investments when compared to magazines or other periodicals. All but
the largest can be launched for $500,000 to $2,000,000. They
quickly become self-funding because of their modest, fixed over-
head and subscription-driven economics. While most banks won't
loan money for the initial development, they will loan money for
operating capital once a track record has been established. Meet
with your accountant and lawyer to discuss possible tax savings
the test phase may offer individuals or companies.
Mequoda Group
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9. Identify Key Personnel, Partners and Vendors
“
The trick: to
identify the right
opportunities and
find the people
who can make
those
opportunities
happen—
particularly for
subscriptiondriven websites,
whose only assets
are its personnel
and its subscriber
base.
The trick: to identify the right opportunities and find the people
who can make those opportunities happen—particularly for sub-
scription-driven websites, whose only assets are its personnel and
its subscriber base. If you are externally funded, your investors
will pay more attention to your staff lineup than to your idea or
your business plan. Look for people with a track record of doing
exactly what it is you are asking them to do. An added bonus is a
key management team member who wants to invest in the project.
The key functions include: editorial (the product), marketing management (the revenues), information technology (the distribution)
and finance (the bottom line). Your managers must be willing to
live and breathe the website during its first year or so. Their dedication and enthusiasm must be complete, but they should also be
experienced in startups. And if you see a weak link, find a consultant experienced in your market.
It's also never too early to start the search for strategic partners
who can supply content, give you access to the market and build
and host your website. Most website publishers, at a minimum,
will outsource the market testing, website creation, website host-
ing and search engine optimization for their venture. More so than
any other business, subscription-driven websites can operate with
a very small staff and outsource specialized functions to a variety
of partners and vendors.
On the marketing front, many of what may at first appear to be
competitors will end up being your partners. Website publishers
who serve the same market need each other to gain cost-effective
Mequoda Group
“
As the
newcomer, its up
to you to get the
ball rolling by
promoting their
website, products
and/or events.
Mequoda Group
20
access to new subscribers. Many of these relationships will be
reciprocal revenue-sharing deals where you recommend and sell
the other publishers products and subscriptions. Make a point of
getting off on the right foot with these folks as early as possible.
Don't be annoyed if some don't welcome you warmly right away.
While some may welcome you based on reputation alone, others
will wait for you to prove your commitment to the market and
establish your subscriber base before they're willing to promote
your products. As the newcomer, its up to you to get the ball
rolling by promoting their website, products and/or events.
21
10. Perform a Keyword Intercept Market Study
“
A Keyword
Intercept Market
Study is used to
catch users who
have searched
using a keyword
that indicates
interest in your
website idea.
While qualitative, anecdotal data is useful, you may also want to
get in the heads of your prospective customers where you'll meet
them in the future—on the pages of Google and Yahoo! search
results. Both paid (pay-per-click) and free (organic) search are the
backbone of every subscription-driven website's new member
acquisition program.
A Keyword Intercept Market Study is used to catch users who
have searched using a keyword that indicates interest in your website idea. Using pay-per-click ad words, you'll offer the searcher
the chance to voice their opinions and earn a small incentive for
their trouble. The survey should take less than 15 minutes and can
include 50 to 60 easy-to-answer questions. Use the survey to discover who they are, what other websites and media they use and
to explore the unmet needs your venture will attempt to serve. The
results can be valuable in defining the website's functionality and
content. A clever survey can also gauge reaction to certain lan-
guage and copy that will guide the subscription acquisition wizards in the creation of your marketing landing pages and order
flows. Good survey designers, like good copywriters, are few and
far between. Select a firm with experience in online survey
research and subscription-driven website development.
Mequoda Group
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11. Create a Functional Product Specification & Paper
Prototype
“
A good
functional
specification and
well-tested paper
prototype will help
you produce a
website that is
customerfriendly—a rare
thing in 2005.
A membership website offers its design team the challenge of creating an entity that includes all the functionality of an encyclopedia, newsletter and desktop software application—rolled into one
easy-to-use website. Based on hours of website usability testing,
we can tell you that most websites are very difficult to use. A good
functional specification and well-tested paper prototype will help
you produce a website that is customer-friendly—a rare thing in
2005. It can, for the time being, be a powerful source of competitive differentiation and advantage while the rest of the world
catches up.
The functional specification describes in words what the user can
do on each page of your website. A wire frame is used to track
where each click takes the user, or simply put, how your website
pages connect. A paper prototype (see the Mequoda Library's
review of Paper Prototyping by Carolyn Snyder) and usability
testing are used to fine-tune your functional spec and your wire
frame before you begin spending time and money to build HTML
webpages or the programs that will run them.
Mequoda Group
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12. Prepare a Detailed Content Plan
“
Outline your
editorial content
for your website
and email
newsletters in as
much detail as
possible.
Outline your editorial content for your website and email newsletters in as much detail as possible. Provide descriptions of article
types and special editorial sections. Provide a brief description of
enough editorial material to cover three to five months of website
updates and weekly email newsletters. Make sure you have
enough material to publish at your chosen frequency—weekly for
most websites, daily if you have the content plan to support con-
tacting your customers that frequently. Take your best material and
prepare a non-working prototype.
Also, make it clear who will be creating the content for the web-
site and email newsletters: how much via staff and how much via
freelance. Make a few exploratory calls to well-known writers and
experts. Consider adopting a board of advisors. This lends credibility to your efforts and its members may provide some very
valuable advice.
Editorial content may be the blood and guts of your website, but
its name and design are the skin that gives your backers and subscribers their first impression of your effort. Your name should
portray exactly what you want, naturally drawing readers to your
website. If the domain URL for the nameplate you want is taken,
but not used, don't hesitate to go after it. Domain squatters will
often sell you the name for a few hundred, or a few thousand, dollars.
The design of your website must do three things. First, it must be
easy to use and navigate. (See the Mequoda Library's Consumer
Magazine Website Design or Regional Newspaper Website Design
Mequoda Group
“
As much as
possible, exploit
your audience's
prior knowledge
and the mental
models that apply
your topic.
24
for best practices for creating a usable website.) In some market
niches, the usability of your site may be your strongest competi-
tive advantage. People are willing to put with inconvenience when
it's the only place they can go for the information they are seeking.
When all else is equal, the easiest, most intuitive site wins.
Next, it must match up to, and speak the language of, the demo-
graphics you are trying to reach. Labels, headlines, snippet copy,
and links must be in user-centric language. A surprising number of
websites seem to have multiple "owners" and it's reflected in the
way they organize their content. The organization of the areas of
the website must be in support of user goals.
And finally, it must also set your website apart from your competitors. Navigation, typeface, layout and color are all at your disposal. However, in your effort to stand apart, be careful to not move
away from standard web conventions that actually enhance your
site's usability. As much as possible, exploit your audience's prior
knowledge and the mental models that apply your topic.
Mequoda Group
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13. Create and Test a Non-Working Website Prototype
“
Now its time
to take everything
you've learned and
make it real, or at
least as real as the
facades in a
Hollywood movie.
Now its time to take everything you've learned and make it real, or
at least as real as the facades in a Hollywood movie. Using your
final mockup and functional spec, it's time to build Web pages that
link. Use your best content to populate the pages directly. During
this stage you'll explore the paths a user might take to do all the
things they can do at your website. These paths are often called
use-cases, or task scenarios, and are captured in sequence as storyboards, another term borrowed from movie-making.
Once your non-working prototype is ready, it's time for another
round of usability testing. You'll isolate three to five tasks and let
someone who fits your target customer model try to complete
them without help. If significant problems are found, you may
continue to iterate the process until the average user can navigate
your simple website tasks with ease. Be on the lookout for confusing language and functionality that the user expects and does not
find. Usability testing can make or break the success of your website.
While it is possible to do your own usability testing, it's difficult
to achieve the level of impartiality required to get honest, helpful
feedback from your test users. Planning, executing and facilitating
a usability study is as time consuming and difficult as conducting
a full-scale marketing research study that entails surveys and focus
groups. In addition, accurately interpreting results requires a good
deal of background knowledge in website best practices. This is
one area where time and money spent up front saves development
and, more importantly, redevelopment dollars down the road.
Mequoda Group
26
14. Conduct a Search Engine Marketing Test
“
Online
subscription
marketing requires
you to focus on
either email
marketing for
publishers with
access to the
appropriate opt-in
email list, or payper-click (PPC)
search engine
marketing.
Online subscription marketing requires you to focus on either
email marketing for publishers with access to the appropriate optin email list, or pay-per-click (PPC) search engine marketing.
While you'll use other sources to acquire subscribers for your
website, email and PPC marketing are best for new product testing
because, as we mentioned earlier, they can be planned and executed as a campaign before your website exists. We'll assume you
don't have access to an appropriate email list for the purpose of
this report.
PPC testing for a startup is quite a bit different than testing for an
ongoing website. A startup just doesn't have the capital available
for a huge multi-panel test. Experience must be your best guide to
setting up a startup matrix. For a mid-size website that will ulti-
mately attract thousands of subscribers, a test that generates 500 to
1,000 gross credit card orders would be about right. Ideally, this
would be made up of 10 keywords broken evenly into five panels.
Four panels might explore three price levels and two trial periods,
while the fifth panel should test a different creative format.
Each of these tests will give you information that will help make
the decision to launch and move you to profitability faster when
regular publication begins. Allow two to four months lead time to
plan and execute your test. It can be done faster—but haste often
leads to mistakes. We've seen plenty of tests that were rendered
unreadable by poor execution. Choose vendors that are website
marketing professionals. Again, you'll choose between managing
the test in-house and outsourcing. Cost constraints and experience
must be your guides. If the results vary dramatically, compare the
Mequoda Group
“
If the costper-order is too
high for all
keyword and
creative
combinations, it
could be time to
forget the idea and
move on.
Mequoda Group
27
cost-per-order or your best combination with your economic
needs. If the cost-per-order is too high for all keyword and cre-
ative combinations, it could be time to forget the idea and move
on.
28
Keyword Marketing Test
Full Matrix Campaign Budget
Mequoda Group
29
15. Prepare the Final Business Plan
“
Once you
have a detailed
financial model,
check your
estimates from
Step 5 with your
new "real"
projections. Any
major
discrepancies
should be fully
investigated.
This is the last step of the testing phase, where all findings from
the previous steps are put together in a professional, compact format, projecting the first five years of operation. It should docu-
ment and expand your preliminary research, detail how your test
will be interpreted to create an on-going program with multiple
sources, lineup key personnel, and finalize your website prototype.
In addition, the plan should spell out revenue strategies for selling
other products and services to your subscribers. How will you
leverage your brand and content to create books, reports and
events? If you plan to take display or directory advertising, or generate revenue as an affiliate for other websites, detail the revenue
model and potential participants. Don't forget to explain how you
will staff and manage these ancillary programs.
Once you have a detailed financial model, check your estimates
from Step 5 with your new "real" projections. Any major discrepancies should be fully investigated. Keep in mind that the intense
time required might also cost you money in lost income if you
have to reassign current personnel. Again, a competent professional can be retained to prepare the business plan for you.
Mequoda Group
30
16. Raise Launch Capital
“
As far as
you’re concerned,
this product does
exist. You just have
to get it to its
subscribers.
You are now entering the actual launch phase. Your tests point to a
valuable product. Now you just need to convince those with the
big bucks to back you for the first three to five years. To make this
kind of sale, you have to be a publisher. As far as you’re con-
cerned, this product does exist. You just have to get it to its subscribers.
Remember, a supportive attitude and solid experience in your
investors is the thing that lets you sleep at night. While sources of
earlier testing money may also be sources of launch capital, you
will undoubtedly have to add others. Formal investors, such as
general venture capitalists, usually aren’t the best source. In fact,
they pointedly stay away from direct marketing; most don’t know
anything about the peculiarities of the industry, and the incredible
array of cost and revenue streams boggles their minds.
Other media companies are usually the best place to start. In fact,
they may have been interested in a product similar to yours, but
hadn’t found that perfect person with your energy and dedication.
If your idea is a good one, they would be silly to "steal" it. People
are the key to this business, not ideas.
Mequoda Group
31
17. Execute Your Business Plan and Let it Go
“
Both your
business plan and
website should be
allowed to evolve
as you and your
team gather data
and experience.
Remember, nothing is written in stone. Both your business plan
and website should be allowed to evolve as you and your team
gather data and experience. Be constantly on the lookout for better
ways to run your business and new ways to sell subscriptions and
ancillary product opportunities. As the market changes, make sure
your editorial and functionality changes with it, or in front of it.
Your editor should implement an ongoing research program that
includes one-on-one reader contact and statistical research. Your
website, like any successful business, should be allowed to take on
a life of its own.
A feeling of excitement and enthusiasm has undoubtedly been
building since the early part of the test phase. Don’t let the details
or problems of the launch decrease that level of enthusiasm, both
outside and inside your office. Unless you have deep pockets,
gaining outside media attention usually requires imagination to get
the most for your limited promotion dollars. Your goal is to simply
and clearly get the message out about who you are and what benefits subscribers will gain from your website. You want to create a
sense of community with your subscribers, partners, staff and
investors. A final word about your staff: remember that they are
just people. Not only must their dedication and talent be tops, but
their attitudes must be unerringly positive. Laughter and camaraderie, as any military veteran will tell you, is as important to
winning a battle as strategy and tactics.
Don’t try to control every single aspect of your website—especially the content. For a startup, what makes a website special and
good and true for its readers is that there is an editor who is
Mequoda Group
“
Let the
product be what
its subscribers
want it to be.
Mequoda Group
32
focused solely on those readers and isn’t worried about other business considerations. The Internet also offers unprecedented opportunities for the subscribers to contribute content, which is the ulti-
mate form of reader involvement. Let the product be what its subscribers want it to be.
33
References and Resources
• BusinessWeek.com
• ConsumerReports.org
• Google
• Morningstar.com
• Mequoda Library Reports
• Generating Website Revenue
• Consumer Magazine Website Design
• Regional Newspaper Website Design
• QuickMBA.com
• SI.com
• Snyder, Carolyn. Paper Prototyping
Mequoda Group
34
About the Author
Don Nicholas
Editor, Mequoda Library
Managing Director, Mequoda Group
Don Nicholas is a popular media consultant, author, editor, moti-
vational speaker and media entrepreneur. He is a leading expert on
Internet media strategy. The Newsletter on Newsletters has dubbed
him "a publisher’s publisher" and the Newsletter and Electronic
Publishers Association (NEPA) calls him "American’s leading
expert on website publishing strategy."
Media Industry Leader & Consultant
Nicholas is Managing Director for Mequoda Group and the firm's
lead media strategy consultant. Over the past 20 years, he has
guided the media strategy for hundreds of companies in the areas
of content development, information product design, marketing,
economics, mergers, acquisitions and organizational development.
He has a special talent for identifying new media business opportunities and creating media strategies to pursue them.
Some of his current and past clients include: Aspire Media, Asay
Media Network, Bennett Travel Media, Business & Legal Reports,
Campus Marketing Services, Consumer Reports, Dark Intelligence
Group, Grace Intelligence Group, Harvard Business School
Publishing, Harvard Health Publishers, Highlights for Children,
KCI Communications, IDG, Morningstar, The Motley Fool,
Ogden Publications, Ohio Magazine, Unity School of Christianity,
University Health Publishing, Tech Republic, Time Inc., USA
Today and Yoga Journal.
Mequoda Group
35
Nicholas is the creator of many popular media strategy concepts,
terms and tools that are now widely used by the media industry.
They include the Mequoda Method (a concise system for building
and managing "niche media empires"), the Smart Sub Ecommerce
System (an online content-driven direct marketing system) and the
Lighthouse Publishing Model (a budgeting and forecasting system
for periodical publishers).
Nicholas is a member of the Magazine Publishers of America
(MPA), Newsletter and Electronic Publishers Association (NEPA),
Society of Professional Journalists (SPJ), and The Executive
Committee (TEC). He is the principle founder of Lighthouse
Software, MagazineWeek, Blue Dolphin Group and Mequoda
Group. Don has also held senior management positions with
Bayland Media Group and Sacramento Magazine.
Popular Journalist, Author & Editor
Nicholas writes three media strategy, Internet marketing and website design case studies each week for the Mequoda Café Daily
and is editor for the Mequoda Library where he is also a regular
contributor. During his 30 years in media, Don has served as editor and/or publisher for American Writers Review, Editorial
Strategies, Internet Voyager, MagazineWeek, Writer & Editor and
Writing for Money.
Don has authored hundreds of articles and industry reports for
leading business magazines and journals, plus four books on consumer behavior, media strategy and information technology. His
Mequoda Group
36
fifth book, The Mequoda Method Internet Media Strategy
Handbook, will be published later this year.
In 1989, Don created the Editorial Excellence Awards, which
became the magazine industry's largest editorial awards program.
His journalism career began as a writer-producer for the Armed
Forces Radio Network (AFRN) while serving in the United States
Navy.
Experienced Educator & Corporate
Trainer
Nicholas has led hundreds of educational programs for leading
universities, trade associations and corporations on media strategy,
information technology and management in the United States,
Canada and Europe. Thousands of media industry professionals
have attended his programs including his popular Mequoda
Method Internet Media Strategy Boot Camp. Don also leads the
annual two-day Mequoda Summit which explores current best
practices for media strategy, Internet marketing and website
design.
Nicholas received his B.A. in Journalism & Communications
Studies from California State University, Sacramento. He studied
Film & Television at Rice University in Houston, and
Organizational Management at Capella University's Graduate
School of Business.
Mequoda Group
Mequoda Library
HELPING PUBLISHERS HARNESS
THE INTERNET
M E Q U O D A L I B R A RY Your Mequoda Library Charter Membership grants you
Don Nicholas
Editor
Kim Mateus
Managing Editor
Laura Pittman
General Manager
Peter A. Schaible
Editor-At-Large
immediate 24/7 access to the ultimate 5-volume reference
set:
Internet Strategy for Publishers, Second Edition
Internet Marketing for Publishers, First Edition
Website Design for Publishers, First Edition
Landing Page Handbook, First Edition
Membership Website Handbook, Second Edition
Allisyn Deyo
Each week, the volumes get updated with new chapters
that include best practices guidelines, case studies and
reviews. You'll discover how the Web's most successful
CONTRIBUTING
publishers balance multiple online and traditional revenue
EDITORS
streams to maximize their overall profits and extend their
John Alexander
brands. You'll understand the economics behind large and
Robert W. Bly
small scale Internet marketing and publishing programs
Alexandria K. Brown
and discover what you can learn from each.
John Clausen
Webmaster
Terri Edmonston
Peter J. Fogel
Larry Kerstein
Steve Laliberte
Robin Nobles
Roxanne O'Connell
Roger C. Parker
Jane Zarem
Free Bonus: Your Mequoda Library Charter Membership
also includes 24/7 access to the Mequoda Discussion
Forum where members and faculty meet online to ask
questions, discuss options and get answers—all at no
additional charge.
14-Day Trial Membership Offer
Start your 14-day free trial membership to the Mequoda Library today. We
ask for your credit card to reserve your membership but we don’t charge it
until after you’ve been able to view the Library for two full weeks.
Membership to the Library is just $147 for a full year of access to hundreds
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How to Launch a Successful Membership Website

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