It’s often the risk taker in business who provides at least part of the answer to a perplexing problem.
So I wanted to see if Joel Babbit, a local ad exec known for his chutzpah, was on the right track with his latest venture.
Could Babbit, in launching an environmental Web site, Mother Nature Network, have developed a business model that works? That would be in sharp contrast to many revenue-challenged news sites.
In a move that will be widely watched by media companies around the world, The New York Times recently announced it will start charging for Web usage next year through a metered system, after an unspecified number of free hits.
But sometimes, the smaller, local business operator may have a better answer. In this case, Babbit, who operates mnn.com out of the 191 Peachtree building downtown, does not think charging readers for content will work.
Instead, the 56-year-old adman is making money by charging advertisers in a different way. Babbit has essentially gone back two generations to arrive at his business model — back to the advent of TV.
When TV was in its infancy, companies like Hallmark and GE sponsored entire shows. Only after TV exploded in popularity, Babbit said, did most commercials collapse into 30 and 60 seconds. He’s not a fan of the latter format.
“I’m guilty of wasting millions of dollars of clients’ money in the past, so I saw the ineffectiveness of it,” he said.
Babbit borrowed from that early TV model and is now selling advertisers one year of exclusivity in 36 commercial categories. They include transportation, technology, lifestyle and business, and are akin to the way the Olympics sells exclusive rights to advertisers.
At Mother Nature Network, each advertiser pays about $300,000 a year to look a little greener than it would otherwise. (Green seems to sell these days.) That is quite different from the traditional ad model, which generally is done on a very short-term basis without any exclusivity for the advertiser.
Another major difference on the Web site — there are no pop-up ads. Each advertiser can tell its story — often through a block of four or five different videos in the middle of a Web page.
The results: In its first year, which just ended, the Web site was a “little more than break even,” Babbit said. This year, he’s projecting a $3 million profit. That’s not bad for a Web site launched in a recession.
Still, there are unanswered questions to investigate before knowing if Babbit’s model could work for lots of other media operations. They include:
– Can a Web site focusing on a popular, single issue that’s read by highly educated people work for news organizations with broader coverage missions and demographics?
– Can a model that supports a small work force of about 20 paid staffers, supplemented by more than 100 unpaid college journalists around the country, work for larger media companies?
– Can journalistic principles be maintained? Mother Nature does report negative news about sponsors. But, Babbit acknowledges, it does not do investigative stories about them.
I don’t know the answers. I do know what Babbit is doing warrants more attention.
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