Webcasting: The Two-Headed Beast

Editorial and advertorial

Media Survey Should webcasting primarily be an extension of a publisher's editorial operations, or an extension of its marketing operations designed to please advertisers with targeted B-to-B messages?

In ITworld.com's case it's both, which is why CEO Bill Reinstein and his team have embraced the biggest challenge of their careers: how to launch a medium - with a myriad of information services within it - all while making a profit.

"The barriers to entry are 100 feet tall," Reinstein says. "They're a little bit higher than just putting up a web site. Those that get in early will have their scars and success stories. We're not making $20 million a year on this, but the gross margins are good!"

To save money in the short run, ITworld.com has decided not to build its own webcast facilities. Instead it relies on a subcontractor, VideoLink, of Watertown, Mass. VideoLink is primarily a television production facility with connections - literally - to CNBC, MSNBC and other national broadcasting outlets with a need for facilities in the Boston area. VideoLink has equipment and talent comparable to what you'd find anywhere in New York or L.A. With a pay-as-you-go arrangement, Reinstein and his team can keep capitalization costs low and production values high while they wait for revenues to build.

Reinstein believes that the broadband content market can grow quickest when there are many third-party service providers to choose from. Reinstein says he was discouraged that Intel last month shuttered its Internet Media Services broadcast center after only nine months, abandoning its commitment to spend up to $200 million in developing webcasting services for businesses.

ITworld.com licenses its webcast platform from Akamai, which also serves, among others, CNN.com and MSNBC.com. The platform has a distinct advantage over other platforms in that it can integrate a video screen and a dynamic HTML display area within a single player. With the ITworld.com player, a slide can reinforce points being made by the talking head inside the video window. This aids comprehension and retention - and by extension, viewer and advertiser satisfaction.

In the near term, satisfied advertisers represent ITworld.com's most compelling webcast sales tool. In a testimonial, Dell Computer senior marketing manager Richard Katusak said "hundreds of qualified prospects" viewed a webcast on image management, "many of whom became new Dell customers within only three weeks of the event."

Charlotte Perkins, an advertising manager at EDS, told SWMS that the e-solutions custom webcast produced by ITworld.com generated "good internal feedback," adding that the company was able to get many of its prospective clients online to absorb the EDS message.

That's one of the big reasons why IDG is sticking it out, despite having an untenable advertising story in terms of cost-per-thousand. Advertisers seeking targeted prospects have good reasons to be excited about a webcast audience, even though it is tiny. By the act of registering, the viewer is self-selected as highly interested in the topic. If the viewer watches the entire webcast, (a behavior that is easily tracked), one may assume they are vitally interested in the topic.

According to ITworld.com, a healthy percentage of registrants also indicate a willingness to receive e-mail from the sponsoring vendor after the webcast is over. All this adds up to a level of sales opportunity that even controlled circulation publications cannot deliver.

At least that's how the story goes. So many obstacles remain. The biggest one might be the tyranny of time: who can afford to sit there for an hour in the middle of the weekday maelstrom?

A growing number of people will do it - but the value has to be there, be it editorial or advertorial.

That's the challenge - and the opportunity - for ITworld.com.

This article is the second of a two-part series. Part 1 is here

Copyright © 2001, Sam Whitmore's Media Survey. All rights reserved

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