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Building for the present versus the future

Building for the present versus the future

December 11, 2006
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Will virtual reality boost the paysite market?
Yes, it will soon
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Yes, but in a few years
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No
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Present versus future efforts has been an interesting topic to me for many years now, as it relates to adult internet firms. The issue of building for the present versus investing in the future creates lively debate among many people in the adult industry online. No doubt, I admit that I was taken in during the early years by the concept of all advertising and promotions for adult consumer sites generating immediate response and relatively immediate ROI. Collectively, the industry always has to set time aside to refine what you have now in terms of web sites, software, affiliate programs, content production, etc. On any given day, there are many types of fine tuning that we all apply to the sites and traffic/marketing efforts in place. Whether it’s SEO work, optimizing what is seen where on a page, such as buy/join buttons, what promo materials are used, etc.

Although I have met many organized long term thinkers over the years, it’s interesting to see how many people are actually building and investing for the future. This is more than an issue of going for the ‘quick’ money or not. In other industries, building for later means not just building the infrastructure at a short term loss, such as web site construction, servers, staff, billing systems, etc. More to the point, there seems to be mixed views about promotions and traffic/marketing efforts for the future. On the B2B/webmaster side, there is no question that people know you must build and spend in order to acquire a following for affiliate programs, content sales sites and billing. What’s interesting is seeing how many people and firms are building up marketing resources and traffic on the consumer side for the long term.

This gets into issues such as what your goals are for time and money you invest in promotions. Less firms seek to brand their consumer offerings versus promote in order to generate direct response. We (obviously) fully support the concept of all ad/marketing dollars being accountable. That said, it was only recently that a large pay site/affiliate program company noted that for their newest consumer site offering, they expect to operate in terms of marketing costs at a loss for 18 months. 18 months? Wow. This was truly one of the few times that I have seen cost conscious adult merchants willing to spend at a loss on consumer marketing/advertising in order to reap the rewards that are almost two years away. The concept is great and reflects the ever- evolving maturity process for our industry as a whole.

On some level, SEO efforts are about building for the future. Beyond this, will the average company buying ads and deploying promotions for consumer sites allow for the ROI to come through six-nine months out, a year out? In some ways, we see a bit of this with the ever growing popularity of low cost membership sites and low cost VoD sites. It can take a much longer period of time to generate the profitable returns, but is it worth it? Look at ISP’s, entertainment services (think NetFlix) credit card companies, etc. In some cases, they can spend hundreds of dollars to create customers. The end result: think about retaining customers for years, not months. Better quality, loyal customers acquired with a lower sense of urgency. Back to the question of whether this approach has merit, I think so.


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