Helping Small Publishers Overcome Challenges of Web Publishing

Helping Small Publishers Overcome Challenges of Web Publishing
Godengo Sets Up Ad Network, Content Management Tools for Niche Titles
By Abbey Klaassen
http://adage.com/digital/article?article_id=119471

NEW YORK (AdAge.com) -- It's hard to ignore the rapid growth of the online advertising space, but for many traditional media publishers going online is a major investment that calls for overhauling content management systems and coordinating ad servers. It's especially daunting for smaller, locally focused publications that may not see the immediate returns on the cost of upgrading their web operations.

One web entrepreneur is betting on that conflict.

Untapped market
Tim Sullivan launched his company, Godengo, a little more than two years ago, after running a web-hosting outfit on the bet that there were more clients like "Palm Springs Life," a small Florida magazine that had come to him on a web-development consulting product. The magazine was, he felt, representative of an untapped market, local magazines, which had been growing rapidly. Since then, he has sold his web software to pubs like San Diego Magazine and Rhode Island Monthly and has launched an ad network that sells inventory across more than 92 titles. His newest client is Tribune Co.'s Chicago magazine.

"When we looked at city and regional magazine space we saw high-quality publications that were doing well in print but were falling behind online compared to daily local newspapers," he said. "They just hadn't focused on it."

They weren't fluent in search-engine optimization, which was keeping their content from being found. Another problem, said Bill Oates, general manager of Chicagomag.com, is there's no easy way to convert content from page layouts to the web -- and building a system from scratch isn't doable for many city and regional magazines. And the local advertising market -- which supplies almost all of the ad revenue for most of these magazines -- hadn't yet exploded onto the web in the way the classified market had for newspapers.

One size fits all
Mr. Sullivan's Emeryville, Calif.-based Godengo provides an economical solution: a fairly one-size-fits-all content-management system and web design model that is optimized for things like web search. He claims the magazine sites using it often double or triple their traffic within six months.

The company charges an implementation fee and a monthly license fee and offers a la carte services on top of that. He said some of the deals have been structured as revenue shares as well; the network is on a pure revenue-sharing model. While he won't say exactly what revenues are, he claims 2007 will be a "seven-figure year."

There's a definite similarity to the modular look of the sites using Godengo's services. Mr. Sullivan argued that the publications all focus on different markets, so the sameness is less of a concern, and said he would never sell his site-development services to two publications in the same market. In the case of Chicagomag.com, Mr. Oates said they made modifications to the Godengo design after many discussions about how they wanted it to look. "We made a real concerted effort to have a distinctive look," he said.

He said his magazine has begun to participate in the online ad network, but said it's too early to say whether it will be material.

Delivering scale
The network helps bring to national advertisers what the individual sites on their own lack: scale. Despite online advertising's promise to deliver niche, long tail targeting capabilities, it's a well-documented fact that in the end scale still matters (in many cases, the most) to the national brand advertisers looking to pour money into the space. Godengo sells the ads, but the magazines can choose to fulfill the impressions on a case by case basis.

"We needed to be sure we weren't cutting our own throats with a national advertiser," said Bill Oakes, general manager of Chicagomag.com. He surmises his title receives a larger share of national ad dollars than most city and regional magazines, thanks to its size. On the flip side, he said, "if we have a Chicago magazine advertiser looking for more national ads we can offer that up and get a split of the revenue."

While the network is small by comparison standards, with 2.5 million monthly unique visitors, it is affluent, Mr. Sullivan said. He claims that more than 44% of the visitors have household incomes of $100,000 or higher and 10% fall into the $200,000-plus category. He maintains that they tend to skew a little younger than in print and most of them are not current subscribers.

Jim Dowden, executive director of the City and Regional Magazine Association, said locally focused magazines need to go after some national ad dollars. His association is a proponent of Godengo.

"It's a natural, you need to go after national and the people who are pressing that are going to be national buyers and so you need a natural presence and the technology to make that work," he said.