Mother Nature Network has new ad strategy for the Web

It’s often the risk taker in business who provides at least part of the answer to a perplexing problem.

Joel Babbit

Joel Babbit

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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10 comments Add your comment

TnGelding

February 16th, 2010
9:27 am

I’ve always questioned the effectiveness of advertising. At some point it has to become detrimental to the bottom line. It makes up over half the cost of some products. Babbitt is just reeling in the suckers.

I would pay to get ajc-dot-com if you’d only just stop beating your heads against a brick wall to produce the labor-intensive print edition. The cost of delivery alone should be incentive enough. Not to mention the waste of precious resources.

Spanky Spankmeyer

February 16th, 2010
10:19 am

“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.)”

Green from collecting green from the society of dumbbells. Any site that begins charging for access will immediately fall from my radar.

Ad Industry Vet

February 16th, 2010
1:16 pm

If MNN.com is charging $300k per sponsor, that’s $25k/month. According to quantcast, this site has 1.2M monthly pageviews in the US. According to the website, I count 36 categories. A few assumptions, 1) their impressions are spread evenly, so each category gets 33,333 pageviews a month. Let’s assume a max of three above-the-fold ads/vids per page, which gets a premium brand approximately 100k monthly impressions, for a whopping $250/cpm. When the going rate for premium inventory with rich media/video tops out at $50/cpm on the best sites on the web, MNN’s average customer is paying a 400% premium to be listed on their site. I don’t think this is a sustainable model, and would be very surprised to see advertisers flock to this type of solution. Like it or not, buying happens on a cpm/cpc/cpa model for the majority of online media. If MNN, or anyone for that matter, is selling on a sponsorship based model, any agency buyer worth their salt will decompose any exotic model down into it’s cpm component. Getting a first year off the blocks with a novelty buy is very different than a sustained model that makes sense for industry buyers. I’d look to see either MNN’s price drop down to somewhere in the neighborhood of $50k annually, in line with similar green websites, given that their website traffic growth is relatively flat over the prior 6 months.

loopie

February 16th, 2010
3:08 pm

Joel is trying to use a model that worked at the start of TV. Why did it work for TV? Scarcity of channels, and scarcity of content. The web has an infinite number of channels, and no shortage of content. I don’t see this model working for the web, unless you are talking content at the Hulu level, and even there, they have chosen to sell by cpms.

TnGelding

February 16th, 2010
3:13 pm

It certainly seems like a better buy than millions for a 30 second Super Bowl commercial.

big daddy

February 16th, 2010
5:57 pm

Another brilliant move from Babbit. He’s fun to watch.

DigitalPointUSA

February 16th, 2010
5:59 pm

I agree and think that paying for online content is the fastest way to drive away site visitors. I’ve been in both online and traditional advertising for a number of years and most advertisers want exclusivity. I think Mr. Babbitt is on to something especially with the niche “Green” market and wish him much success in this new venture.

MNN

February 17th, 2010
6:00 pm

To Ad Industry Vet – we greatly appreciate the interest and debate which this article has generated. Many of the comments which have followed focus on the economic model of MNN’s site including CPM analysis. While the numbers utilized in these calculations may be accurate when using a traditional advertising model, they do not reflect the value and assets provided to sponsors by MOTHER NATURE NETWORK.

Specifically, these include the following:

- Year-round exclusivity of an entire category in which sponsors are the sole marketing presence on all pages in their respective category–24 hours a day, 7 days a week, 365 days a year.

- Six video/interactive boxes versus the banner and pop-up ads provided via traditional approaches. These provide sponsors the opportunity to communicate in-depth messages on a variety of topics throughout the year.

- Provided within the sponsorship cost, MNN creates and produces substantial new video and interactive content for each sponsor which can be utilized not only on MNN, but on the sponsor’s own website as well.

- Finally, a number of advertising units are provided each sponsor throughout the site–in addition to those assets within their respective categories.

To judge all internet sites based solely on a CPM basis is the equivalent of saying that the prices at all restaurants–including 5 star ones–should be the same as McDonald’s or Subway–regardless of their service, menu, quality, or customer experience. There are many sites that have tens of millions of visitors each month. Yet those visitors may only stay on the site an average of 30 seconds or less and when they do happen to see a message from one of the site’s advertisers–it is little more than the advertisers logo–alongside several other companies “messages”. Should the price to reach those visitors, in that manner, be priced the same as what MNN provides??

The value and effectiveness of MNN’s model is far superior to that offered by others. The fact that many of the world’s leading brands have signed on and that 100% of MNN’s original sponsors in 2009 renewed for 2010, says that many major corporations agree.

[...] reveals that advertisers sponsor sections of the site — some for as much as $300,000/yr. From the article, “Babbit borrowed from that early TV model and is now selling advertisers one year of [...]

Planner 43

June 16th, 2010
11:06 am

I just came across this article and I’m perplexed by MNN’s reasoning and or explanation in response to Ad Industry Vets rationale.

The breakdown provided by AIV is dead on. I’m usually not one to comment but MNN’s response about not using a-typical digital media planning and buying off of CPM is for all reasons wrong. Thats the business…as a planner you calculate the impressions you’ll receive as an advertisor and in turn you put together a plan based on these impressions. The sites delivering the most “relevant” impressions and or uniques and breakdown via CPM comes out ahead.

It’s a good looking site but the model is off. I work for a local fortune 500 company in their media department and the media kit for MNN recentely came across my desk. After doing my research and coming across this story my questions and or concerns are only confirmed. Sites should not hide from their traffic and I’m afraid this is the case. I wish MNN the best of luck for a local startup and if they hit solid traffic #’s that can deliver a solid CPM (few hundred dollars less to get them back with “like” businesses) then they’ll certainly be considered.