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iCopyright's Advertiser-Supported Free Uses
How they work and why iCopyright is the Ideal Partner
By MIKE O'DONNELL, Founder & CEO, iCopyright
March 17, 2006
My last two articles explained what advertiser-supported free uses are and what they could mean to users, advertisers and publishers. In this article, I will explain how the system works. I will also make my case for why iCopyright is the best partner to support this new model for the news and information industry.
How The Free Use Links Work
iCopyright's EMAIL | PRINT | SAVE links work much the same as they do on most publishers' web sites today, but with the ability for contextual ads to go along with the content. The system works slightly different depending upon whether a particular article is being email, printed or saved. The principal difference is that click-ads are inserted into articles that users email and save, while impression ads are inserted into articles that users print. Secondly, user registration is not required to email or print articles, but is required to save articles, since iCopyright creates a personal reading room for each user. I invite you to try each link by clicking on the ones provided at the top and bottom of this article.
The questions asked by most publishers after previewing this service are these:
- Where does iCopyright get the ads?
- How does iCopyright ensure that the ads are relevant?
- How does iCopyright track results and pay the publisher?
- How much money can the publisher expect to make?
- What is required by the publisher to implement the links?
Note: iCopyright's attorney would chastise me if I did not emphasize that much of the following information is patent-pending.
Where The Ads Come From
iCopyright receives ad feeds from any number of ad networks. Essentially, the system aggregates ads from pre-qualified and pre-authorized sources. The publisher decides if ads from all participating ad networks can be inserted, or whether only ads from certain ad networks will be accepted. For example, the publisher may have an agreement with a particular ad supplier that restricts it from displaying ads from competitive networks. In any case, iCopyright does not sell the ads. It is a neutral party that works with all ad networks. iCopyright currently has an advertising distribution agreement with MIVA. Agreements with other ad networks are pending and will be announced when they are signed.
Publishers have also asked about whether they can sell their own ads. The answer is yes, that feature is planned for the next release. Additionally, a future release will provide a system for individual advertisers and advertising agencies to buy campaigns across the entire "free use" network, or for select publications that use iCopyright's free use links. This feature, called iCopyright AdManager, will be available for advertisers to beta test in May. As with the ad network filter, publishers will have the ability to accept or reject ad placement requests from individual advertisers and advertising agencies.
How Ad Relevancy Is Determined
When a user clicks the email, print or save links, the iCopyright system fetches the most relevant ads from the available pool of inventory at that instant, ranks them based on net revenue to the publisher, then inserts them into the article. Many ads have a very short shelf life. When the advertiser's per-click or per-impression ad budget has been expended, their ads disappear from the available pool of inventory. That is why the iCopyright system must fetch them in real-time. Ad relevancy is determined by a number of factors.
First, iCopyright determines the subject of the article using its Clip&Copy technology and other keyword algorithms. iCopyright gets additional clues about the subject of the article by looking at certain meta data that many publishers embed within their articles. There are other technologies and methods that iCopyright is testing to optimize this matching process. We expect the relevancy of ads to the selected articles to get even smarter with time and experience.
Second, if there are no ads available that appear to be a good match based on the subject and content of the article, iCopyright falls back on the keywords that publishers have entered that describe their publication and their audience.
For example, if a user clicks on an article from The Associated Press about stem cell research, iCopyright will first look for ads that are related to stem cells, which may even include ads from companies that are mentioned in the article. If there are no related ads available on the keyword phrase "stem cells," iCopyright will pull ads that match keywords entered by The Associated Press using their iCopyright Administrative Console. These keywords are likely to be more general, such as "news," "sports" and "entertainment." The more targeted, or vertical, a publication, the better the matching process will be when iCopyright uses the publisher's keywords, rather than the subject matter of the article.
Ad Tracking and Reporting
The feeds that iCopyright receives from participating ad networks communicate the bid rate for each ad vying to be inserted into an article that a user is emailing, printing or accessing via his or her personal reading room. Ads that have a bid rate of $1.00 would typically be ranked higher than ads with a bid rate of $0.50 - but not in all cases.
iCopyright also factors in the revenue share offered by the suppliers of the ads. If one ad network is giving the publisher a 50 percent revenue share and another is giving the publisher an 80 percent revenue share, the ad from the network offering the 80 percent revenue share is likely to be ranked higher. For example, if the ad from Network A has a bid rate of $1.00 and a revenue share of 80 percent, its ad would be ranked higher than the ad from Network B which has a bid rate of $1.25 and a revenue share of 50 percent. The publisher nets more from Network A. iCopyright's technology is designed to optimize revenue for the owner of the content.
iCopyright also tracks each ad click so that publishers have a reasonable audit of results and revenue due them from each ad supplier. iCopyright collects the money under its agreement with each ad supplier. It deducts its percentage for supplying the system and for delivering and hosting the content, then passes the balance to its publishers each month. On average, iCopyright earns 15% and passes 85% of the ad revenue to the publishers.
Ad Revenue
How much money can publishers make with this ad-supported model? Revenue will depend upon the brand cache of the publication, the subject matter of the content and the publication's web traffic. Revenue will also depend upon how widely the articles get circulated by users and the availability of relevant ads at the moment they are requested. Additional factors include the click rates and impression rates of each ad (how many users click on the ads), the bid rates and the revenue share offered by the supplier. There are a lot of variables. Let's look at one possible scenario:
A trade journal publisher gets one million visitors per month. The email link is used by five percent of visitors - 50,000 users. The average user of the email link shares the content with three people, who in turn, pass it along to one other person, for a total of 300,000 free use exposures (not including the first user). Two percent of the users who receive the content click on just one ad that comes with the content, for a total of 6,000 clicks. The average bid rate is $0.50 per click. Assuming an average revenue share of 50 percent after the ad suppliers and iCopyright take their respective pounds of flesh, the publisher would net $1,500 from emailed articles.
The print link is used by two percent of visitors - 20,000 users. The average user makes 10 copies, for a total of 200,000 copies. The average per-impression rate is $0.03. The publisher would net another $3,000 from printed articles.
The save link is used by one percent of visitors - 10,000 users. The average user refers back to the article once that same month, for a total of 10,000 exposures. Ten percent of those users click on one of the ads that are displayed while viewing the article, for 1,000 clicks. The average bid rate is $0.50 per click. The publisher would net $250.00.
In this scenario, a small to medium sized publisher with one publication and one million page visits per month could see $4,750 per month in new revenue. The numbers scale dramatically for publishers with multiple publications and millions of visitors per month.
Are these numbers realistic? I think they are on the conservative side. And this scenario does not account for the new traffic or subscriptions that the publisher may receive as a result. Knowing the variables and having the data on page visits, publishers can do their own projections. We will have a better idea of the potential for this model in the months ahead.
Implementing The Free Use Links
Publishers need to add the iCopyright tag to their articles, if they have not done so already, by setting up an account. Once their account is set up using the iCopyright Conductor Console, publishers should also enter keywords that describe each publication. The iCopyright tag is a fragment of Java or HTML code that links to the iCopyright servers and presents the various services. The tag allows iCopyright's servers to fetch the articles when the links are clicked, insert the ads, and deliver the articles with the ads to users and their recipients.
Publishers choose where and how to render the links on their pages, and which services to enable for their readers. For example, publishers can choose to offer the 'Email a Friend' link, but not the 'Print' and 'Save' links. The tag is also the gateway to iCopyright's reprint and digital licensing services. Furthermore, it is through this tag and iCopyright's partnership with the Software & Information Industry Association (SIIA), that a compliance mechanism is provided. The compliance mechanism is designed to educate users and to discourage them from cutting and pasting the content, or from stripping the publisher's brand and attribution.
Why iCopyright?
Some will ask, "Why should publishers use the iCopyright tag and service? Why not build a similar system, or partner with another vendor?" We begin with the central premise that free uses of news and information content are essentially copyright permissions. When presented and delivered in that manner to online users, particularly commercial users, publishers have a better chance of preserving their brands and having their copyrights respected. What's needed is a standardized copyright licensing system that works for all publishers, not an ad-serving system. Ads are just one way to monetize the content. Integrating "free uses" with copyright licensing makes good sense for minimizing piracy and optimizing revenue from people's use of the content. iCopyright has the best system for accomplishing this. Ultimately, iCopyright understands that the real test is how much money it can help publishers make.
There are a number of other strategic and tactical reasons why publishers should look to iCopyright to introduce and support this model - if indeed, we can prove that it works for publishers:
Revenue Now. iCopyright's Ad-Supported Free Uses are ready to be implemented today. They are ready to provide publishers with new revenue this year. Many publishers already have the iCopyright tag on their pages. All they need to do is turn on "Free Uses" using their iCopyright account. Publishers who have not yet added the tag can do so easily. The sign up and tagging process takes minutes, not hours.
Award-Winning Technology and Infrastructure. iCopyright has invested millions of dollars and won numerous industry awards for its technology. The company pioneered ad-supported free uses and is the only company that can offer it today. It would take publishers or another vendor months to duplicate the iCopyright technology and infrastructure. And we dare say it probably would not work nearly as well.
Patent-Pending. iCopyright has filed six patent applications. Two patent applications specifically cover the process and business model for inserting contextual ads within content that is being emailed, printed and saved by users.
Return on Investment. The cost to source, build and maintain another system would outweigh the return provided to publishers by iCopyright. The iCopyright system pays 85 percent to 95 percent of all the revenue it collects to publishers. The cost to publishers to build and maintain their own ad-insertion and free use delivery and tracking system would likely exceed 15 percent of the revenue it would generate for them.
Neutral. iCopyright works for publishers. Engrained in our culture is the mission to protect the interests of publishers and to deliver more revenue to publishers than they could generate through competitive solutions. Publishers serve readers and advertisers. Advertising networks and ad agencies serve advertisers. iCopyright serves publishers and monetizes the content they produce. It functions as a neutral party that is not beholden to users, advertisers, advertising networks, aggregators, or other constituents.
Transparency and User Data. iCopyright discloses exactly how many users are emailing, printing, and saving articles. It discloses how many ads are being clicked, and the click rates of each. It discloses the percentage revenue share and exactly how much money the publishers are due. It collects and reports data on downstream usage of the publisher's content.
Scale and Standardization. Implementing a standardized system that works uniformly across the entire news and information publishing industry will likely speed adoption and generate more revenue for publishers. Competing systems, especially homegrown ones, would likely create user-interface issues that would confuse and frustrate advertisers. Most advertisers prefer to buy placements across multiple sites, not on a site-by-site basis.
Non-Exclusive Partnerships. As a neutral party working on behalf of all publishers, iCopyright can bring partnerships that provide the largest and most qualified pool of ad inventory and, consequently, a larger share of the revenue for publishers. If publishers work exclusively with one ad network or supplier, the inventory will be limited and they will likely not receive as much for the placements as they would from multiple sources. When advertisers and ad networks compete, publishers make more money. Additionally, the ad supplier cannot provide integrated cross-sell and upsell to fee-based uses of the content like iCopyright can.
Interface for Publisher's Advertising Sales Team. iCopyright's ad-supported free use system enables the publisher, or the publisher's designated agents, to sell the ads placed within the content. Publishers can earn more money on ads that they sell than they can from ads sold by third parties. Not that many publishers are organized to sell these ads today, but it is nice to have the option to do so in the future.
Copyright Synergies and Enforcement. iCopyright's Free Uses are presented to users as free copyright permissions. Although they allow users to email, print and save the content for free, users are educated about the publisher's rights and they can be held accountable if they don't honor those rights. iCopyright's partnership with the SIIA provides publishers with a big stick. The SIIA cannot easily discover piracy or enforce compliance if the publisher is using a different tag and delivery system than iCopyright.
Best Practices. Publishers succeed when they focus on producing great content and aggregating great content, marketing that content to users and syndicating and distributing that content through channel partners. Publishers succeed further when they outsource functions that advance this mission, but do not require the publisher to invest in or support them. iCopyright is the publisher's best option for monetizing their user's copying and forwarding of the content, whether those uses are "free" or purchased in the form of reprints and permissions.
Related Articles:
Email this | Print this | Steal this
The Case for iCopyright's Ad-Supported "Free Uses"
iCopyright's Advertiser-Supported Free Uses
What they mean to users, publishers and advertisers
Publishers who want to enable advertising-supported free uses can add the iCopyright Tag to their content by signing up here.
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