Content sites are nothing new. They are pretty one-dimensional online entities that make their money primarily through advertising. Whether they operate on a business-to-business or a business-to-consumer model, the bottom line is still the same: advertising. With that said, there are a lot of challenges in the content space. You only need to look at the fortunes of Yahoo (NASDAQ:YHOO) and AOL (NYSE:AOL) to know exactly what I’m talking about.
If a flat online content remains static, it is not going to fully monetize the opportunities made available by digital media mobile technology. Now that more and more consumers are enjoying online content through mobile devices like tablets and smartphones, it is imperative for traditional content plays like Yahoo and AOL to focus more on video. This is precisely the lesson to be learned from WebMD’s (NASDAQ:WEBMD) recent initiative of offering more video content. Video is definitely more attractive as far as content consumption is concerned. To monetize advertising, you have to have a way to keep people on your website for a long time.
The main enemy of flat text-only content sites is bounce rate. The higher the bounce rate, the higher the likelihood that visitors did not click a link or bought anything. Since most of these content players make their money through advertising, high bounce rate is a serious issue. Video is a great solution because according to many studies, the average dwell time for video is several times more than the typical text-only pages. This is a great strategy on WebMD’s part because it focuses on highly specific and specialized information.
It remains to be seen whether the video strategy to boost ad click-through rate is feasible for other niche websites. If anything, WebMD’s move highlights the emphasis content websites should put on niche specialization. Perhaps, one particular direction they can go in is to offer highly targeted vertical channels.
