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July 15, 2002 - Strategy
Fee vs. free: Web advertisers, publishers assess new model

by Bernadette Johnson
page 3

For companies like E*Trade Canada, whose modest online banner ads are currently posted on sites like and, Internet advertising is about leveraging a particular site's
traffic - whether free or fee-based. According to pundits, the new breed of "pay-per-view" Web sites may
offer advertisers access to more qualified - albeit smaller - audiences; but only if fee-based Web publishers
prove their worth.

With online ad revenues continuing to be hard to come by, many Web publishers are increasingly looking
to the user to pony up revenues.

Over the past 18 months, major Web content and service providers, particularly news and info sites like the
Wall Street Journal Online, Quebecor Netgraphe's and several Bell Globemedia properties, have
championed the "pay-for-content" model, supplementing online advertising revenues (which remain the
revenue mainstay) by charging visitors subscription and/or one-time user fees.

The transition from free to fee means publishers have to get users and advertisers alike to buy into the
concept with unique value-added services and information, and some marketing muscle, says David Keith,
SVP, financial products at Bell Globemedia Interactive.

Keith's company includes, Bell Globemedia's second pay-per-use site, which
launched in December. It followed the October rollout of, which was canned because it
didn't draw enough subscribers.

"You've got to get the word out," says Keith. "The fact that we have broad marketing and advertising going
on does work to attract not just consumers, but advertisers too."

He adds that spent over $1 million on an offline and online campaign to support its
launch. Twenty per cent of the budget went to online advertising (both banners and viral).

Its marketing efforts have also attracted other clients, he says, including TD Waterhouse Canada, for which
Bell Globemedia created a customized version of the site. "We're slowing down
the advertising right now during the summer months, but we'll be right back in there come September.", which attracts active investors (80% males with high household incomes) with
real-time investing, stock alerts and exclusive content and databases at various monthly fees, has made a go
of it despite a slumping economy. Says Keith: "The economy has cut into what we would normally see in
terms of subscriptions."

The site's subscription and ad revenue numbers are not being released - numbers are a little lower than
where they wanted them to be, he says, but user growth has continued at a very steady pace with
"hundreds" of users per day. "People will pay for premium services and we're proof of that."

"There's a lot of competition from the free sites out there," says Keith. "We have one with For publishers, the tricky part is offering enough value-add to cause a person to say 'I
need to have that to do my investing.'

[c] 2002 Brunico Communications Inc. Reprinted with permission.
STRATEGY, STRATEGY DIRECT + INTERACTIVE, and "The Canadian Marketing Report"
are trademarks of Brunico Communications Inc.

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