Think of this as Volume 15, Number 48 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.
I started in the spring of 1985, over a quarter of a century ago. In the years since I have found many business models try and fail, many compensation models try and fail. But I've also found something that works, and I want to offer it to you now.
It's a modified pay-per-view structure, very similar to what I've seen work at ZDNet and (more recently) Seeking Alpha, which I began writing for this June. Setting it up is as simple as being able to measure page views, assign a value to those page views, and link page counts to the names of authors.
Seeking Alpha's model is very simple, a penny per page view. If you get 1,000 people to read your “premium” content, that's $10. Average 150,000 page views per month, as many writers with something to say can, and it's $1,500 – not a serious salary but better than a poke in the eye with a sharp stick.
But mileage varies, and this is a key point. Publishers and writers need to see themselves as partners in an online publishing venture. Each has their role. Publishers draw traffic to the title, advertising it, getting ads to run against the content, and (most important) defining the industry, place or lifestyle being marketed to.
That's all publishing is in the end – it's making markets. You target a sub-set of the larger online market, you use content to draw those readers in, and then you organize that marketplace so these buyers can be served. Organizing and advocating a place, industry or lifestyle – that's the game.
You have to organize and target a market because no publisher wants plain vanilla page views. They want premium page views. If someone reading your online publication is not in the marketplace you're selling to, that's wasted circulation. They have no value to your advertiser, thus none to you. That's why industry verticals need registration walls, with pay walls for those outside the target.
You're not going to be asking Google CPMs for ads on these pages, after all. You're going to be asking the $20-40 per thousand and up that vertical market publishers have always asked for in the past, and gotten, because they were delivering their advertisers real prospects, not suspects. Over time you're going to want to register these people, and your content should be good enough to register them.
Top influencers you'll recruit, but whether or not you have to seek these readers out your content needs to be on-target enough to encourage their voluntary clicks. These influencers can become important to you, a “reader panel” you can tap regularly for market insight. Recruiting and massaging these people is part of the publisher's job, although the editor will be their most regular contact.
At some point you have to determine the value of a page view, for your chosen market. I can't give you a figure, but I can give you a hint. The broader the market, the lower the figure. It's what I call the inverse-square law of journalism, which you'll remember from the paper era. A big fat newspaper might cost 50 cents. A slim magazine might cost a few dollars, or a few dozen dollars for a subscription. A tiny little newsletter might be worth hundreds of dollars per year. Because it's focused.
This inverse-square law also determines your attitude toward traffic. A broad market wants all the readers it can get. A narrower market wants to encourage registration, with special registration benefits (a newsletter, an industry database) assuring participation. A very narrow market may only offer a few free registrations that hit the target and make everyone else (even if they're market participants) pay for the privilege of getting the publication.
Once you know what you're looking for, you recruit by simply going online and collecting stuff that hits your target. Once you find a writer who hits your target regularly, that's who you recruit as your editor.
You don't have anyone working for you whose compensation isn't dedicated to building your business. So let's start with this first hire. You might pay them a retainer, a regular minimum that will not only assure loyalty but give them the time needed to recruit other writers, to edit their stuff so it hits your target, and to represent your publication to other media and the general public while you concentrate on marketing.
The editor should represent nearly all the “salary” you have at risk in this venture. The writers they recruit should have an entirely pay-per-view salary structure, but with one tweak.
That tweak is what I call a “prize fund.” If you're planning on paying a penny-per-page view for traffic writers deliver to you, make it three-quarters of a cent. Or value that page view, for your own purposes, at two or three cents. Pool that extra money into a fund you will use to support “quality” work – whether or not it draws a lot of readers. This way, your editor (who is in charge of the fund) gets to put their stamp on the publication, increasing staff loyalty and providing more focused content to readers.
And there it is. Let's summarize:
Know your target reader – the industry, lifestyle or place you're focused on.
Find an editor who understands the target and make them your partner.
Compensate everyone based on traffic so as you prosper, they prosper.
Everyone who works for you is part of your entrepreneurial team. There are no free riders. Target your publication just as you would in print, and use the same disciplines I learned in print 35 years ago to make money in an online world.