If the most classical models of income like e-commerce have fallen victim to speculation, it was in these essentially virtual models where the speculators strongly fanned the flames of the fire that inevitably had to lead to self-destruction. But beyond playing the victim, what has actually happened with on-line advertising, subscription or info mediation? Where is my income?
Firstly, the appearance of the generalist portals as flag-bearers of the new economy was based on the belief that on-line advertising could grow with the avalanche of new surfers on Internet every day. These large portals also had a very high media profile, which did not go unnoticed by the major communications groups.
In time, stagnation in the growth of traffic, interactive advertising getting caught up in its own spider's web, as it was assessed according to levels of response (something totally unfair if compared with other media) and finally the 50 to 80% drop in charges has meant that even the only portal that showed a profit, Yahoo, has sunk into the red.
The future of advertising and the models based on it lies in a greater degree of creativity in the campaigns (think how many banner campaigns have caught our attention... or simply how many we remember), the diversification toward other formats (for example, the Ad Pepper agency has as its slogan "Beyond the Banner") and finally, also in greater integration of advertising and content.
Secondly, another virtual model of income is charging for content, especially in the form of subscription. To begin with, it seemed difficult for someone to try to charge for services that in many cases could otherwise be obtained for free. Therefore, some who had opted for this model yielded to the pressure and thus, for example, the content of the encyclopedia Britannica.com became free. Charging was a model apparently cold-shouldered, although in truth all the portals were hoping to implement it one day or another.
In the long run however, being free has partly mortgaged the future, as had already happened with another multimedia format: the media en masse launched into giving away free CDs with everything, which has since made it difficult to persuade the user that reasonable prices might be charged, despite its superiority over paper.
The key to success is a mixed free and paying model (like for example, Grec.net, the portal of the Grup Enciclopèdia Catalana); for its quality and the unique nature of the content, for the flexibility in the forms of payment and the appearance of micro-payment (pay-per-bit); and finally, for the boosting of sales of corporate subscriptions to entities and groups.
Thirdly and lastly, the models of info mediation have also had many problems and have suffered, on the whole, the same drawbacks as the generalist portals.
On one hand, the virtual communities had to allow segmented advertising at high prices, but now their future lies in their integration in cycles of what are called the 3 Cs: commerce-content-community, in other words, searching for synergies with the rest of the models, as is the case with EspacioPyme.com, a B2B community.
On the other hand, the models of association to e-shops (commissions for subsequent purchases) will continue to grow around a few e-shops, but it will also be necessary for other models to be incorporated, while the listings models (personal details in return for on-line services) will see innovative applications (consider that the customers of the on-line bookshop of El Corte Inglés, a great source of listings, receive information on just about everything except books).
If the content creation sector is capable of transmitting an idea of the content's worth, the virtual models will eventually be successful. However, it is also necessary not to apply any model in isolation: we must combine all the models of income together. After the scaling-down we are currently undergoing, the most serious projects will remain and reappear, and not exactly thanks to the rich man.
Published in: Dossier econ&pgrave;mic de Catalunya, Dossier de les tecnologies; November 24, 2001.
