Craig Newmark’s website, Craig’s List, is a phenomenon so big that its free listings are absolute must reads for anyone looking for an apartment, a roommate, a puppy, or a buyer for an expiring auto. So great is its reach that newspapers in cities where it is most active — notably San Francisco — worry about their very lives as advertisements that used to appear in their pages move to Craig’s List.
The site is bare bones, yet wildly successful. Its income comes only from real estate advertisements — all other listings are free — and has made Craig Newmark a millionaire. (Should the site be purchased by, say, Google, the “m” would quickly be replaced by a “b.”)
So, is it easy to put up a consumer information website and pull in untold dollars? Is it even easy to become an online consumer magnet? No and no.
Craig Welch, owner of product review website Abby’s Guide, has been working on his website for seven years. It provides him enough revenue to support his family, but it has been a struggle. The site started out under the name “What’s the Best,” which is still the corporate name, but, as technology changed, Welch was forced to reconstruct the site from the ground up. The process was expensive and time consuming, and, what’s worse, the site, named for one of his children, has been slow to climb the search engine ladder, and slow to draw a following to many of its consumer forums.
Mom-and-pop Internet companies generally use HTML in putting up and updating their sites, says Welch, who moved his company from Ewing to North Carolina two weeks ago to be closer to the technology workers he needs to employ — and also for the good weather. (He says he and his wife would take the company to Aruba were it not for the education needs of their children.) But now there is something that works far better for websites like his that have a huge number of pages. It’s a data-driven website architecture called PHP. Using it saves his company two days a week worth of editing code and updating the technical aspects of his 40,000 page site.
The growth of his company, coupled with the new capabilities of PHP, which costs about 50 percent more than HTML to put in place, prompted Welch to totally revamp his buying guide website and to re-built from the ground up using the new technology, which automatically pulls the data that makes up a website page from numerous sources.
Getting the site up and running was slow going, says Welch, who runs it along with his wife, Kathi, and several employees. This is so, he says, because it is wholly dependent upon Internet search “spiders,” mainly those from Google and Yahoo!, and the spiders have slowed down considerably of late. Spiders are the robotic virtual searchers that comb websites for key words and links to determine what they are about, where their visitors come from, and what other websites link to them. Placement on search engines is determined by the spiders’ findings. “Google, and Yahoo! to a lesser extent, are sandboxing,” says Welch. Come again?
Basically, the veteran Internet entrepreneur explains, the two dominant search engines are not happy with the number of spam websites in their universe. They want to make sure that a website is genuine — and not just gaming the system by putting up a site that appears to be about lawnmowers or Tiffany lamps, but really is about nothing. In their quest, they are making it harder and harder for a legitimate site to make it into search engine results. Without search engine ranking a site such as Welch’s, which depends almost entirely on advertising placed by Google and Yahoo! based on the site’s content, is nowhere.
Where once it took a month or less to rise to the top of an Internet search, Welch says that it can now take six or seven months to get noticed. He is there now, but it was “a hard, slow year,” he says of business for his completely revamped Abby’s Guide website, which is now pulling in nearly 200,000 unique visitors a month.
Abby’s Guide reviews 49 categories of consumer goods, everything from cell phones and digital cameras to sewing machines and time tracking software. It educates consumers by providing substantial information about each type of product. It also provides product reviews by users and hosts discussion forums. “You can go there and ask specific questions about lawnmowers, chain saws, snow blowers and you’ll get an answer,” says Welch. “People are wildly interested in these products,” says Welch. “It really amazes me that there are a lot of people out there who just adore talking about lawnmowers and snow blowers. They are some of the greatest people you’d ever want to meet. They are people who genuinely want to help other people.”
A problem with the site is that it has not drawn many visitors to talk about other subjects. Click on product after product and there are no comments at all. “Some forums are up and shouldn’t be,” says Welch. “We should pull them down, but you never know when it’s going to catch fire. One article in a trade magazine could bring thousands of people. It’s not a science, it’s an art.”
In an E-mail from his new offices in North Carolina, Welch says that his writers have prepared many new articles and are preparing to post them now. In addition, he says that his programmer has added new content management software that will get the content up faster.
While casual visitors to Abby’s Guide can find a lot of useful product information, those wishing to post in the forums are required to first log in. Welch says that he is quick to take action when troublesome posts enter the forums and has had to ban nearly 300 people from the site.
Welch was born in Cincinnati, Ohio where his father worked in manufacturing and his mother was a homemaker. Welch graduated from the University of Cincinnati before going on to earn his MBA from Rutgers in 1993. His wife, Kathy, who once worked as a sixth grade teacher at Bear Tavern School in Ewing, now serves the business as a bookkeeper and editor. They have three children, ages five, three, and four months.
Welch came up with the idea for an online consumer buying guides in the late 1990s when he was a management consultant for Straight Path Management, based in Princeton Junction. That business focused on manufacturing companies such as pipe makers and lawnmower makers. “One of our clients was a second-tier lawnmower manufacturer and our job was to work with their advertising and marketing department,” says Welch. “Their idea of advertising and marketing was limited to sponsoring a race car and putting an ad in the sports pages of a local newspaper. I just knew that there had to be a better way than that.”
At the same time, Welch and his wife were also researching the possibility of purchasing a Mazda Miata, visiting websites designed by enthusiasts and clicking on ads. “I realized that I was the perfect target for Mazda at that point,” he says. “Mazda needed to advertise on those websites and get me to their website and offer me a deal. They didn’t have to spend millions of dollars sponsoring a race car. They had to spend a buck to get me there.”
This proved to be the seed for Welch’s new business venture. “I believed that it was possible to create a place online where only people interested in purchasing a specific product would show up,” he says. Welch started the business in partnership with his boss at Straight Path, hired a webmaster, and six months later it was a reality.
Abby’s Guide makes money from contextual advertising through the Yahoo Publisher Network and through Google Adsense. A code is placed on his website that allows Yahoo or Google search engine spiders to come through the site. This allows Yahoo or Google to determine that a particular user in the United States is searching for an air purifier. The mega search engines then zap some text ads from air purifier retailers onto the page on his website that discusses the devices. “The ads are text and they are not obtrusive,” says Welch.
Welch says that it is “incredibly simple” to sign up for these programs. He is paid per click. In other words, every time that a person clicks on an ad for, say, John’s Discount Air Purifiers, that Google has put on his air purifier information page, he receives some money. The formula through which this payment is made, however, remains a mystery, and he is basically okay with that.
Early on, he says, website owners were happy with the amounts they earned from these ads, but grumbling has increased. Small companies suspect that larger companies earn more per click — maybe much more. In its annual reports Google says it pays out 70 percent of its click-based revenue to its website partners, says Welch, adding “who knows?” Whatever the formula, he is not complaining.
The search engine partnerships represent more than half of Welch’s advertising budget, with the other half going to smaller online outlets that he believes will attract users to the website. He estimates that four-fifths of his users come from natural search results and the remaining fifth from the paid advertisements.
There are a number of forums similar to Abby’s Guide on the Internet. Epinions (www.epinions.com), begun in 1999, is probably the biggest and best known — and Welch’s main competitor. There are also a number of “second tier” sites, he says.
Consumer forums have been a good business for Welch. While he won’t divulge his revenue, he says that he is doing well enough. He warns, however, that the bar to entry into the business is fairly high, in no small part because of the sandboxing that slows down a start-up, which must, he points out, pay all of its bills for a good six months before it can hope to see any money rolling in.
While it isn’t easy to get into the online forum business, Welch says that these relatively new commerce commentary sites offer an excellent — and free — marketing resource for all kinds of small businesses. Here is Welch’s guide for small businesses owners who are looking to attract potential customers by using Internet forums:
Study forums. Take a spin around the Internet and find the forums that are discussing your product. Watch for a while and find out how serious the consumers on the site are. Is the site a good fit for your expertise? Are discussions respectful?
Be subtle. Some sites allow self-promotion, while others frown on it. Learn the mores of the site. Welch says that you can’t go wrong with a subtle pitch. You can, for example, include your E-mail address. Make sure that your E-mail includes the name of your company — Mike@princetonhardware.com, for example. That way, anyone who is impressed by your knowledge of Venetian blinds or power saws or horse training, can get in touch with you. If your E-mail address is also the name of your website — where potential customers can learn all about your products, hours, and location — so much the better.
Be polite and helpful when you post on an online forum. “We have a business that contributes to our forum that has been there right from the beginning,” says Welch. “As time went on they were able to gain a lot of credibility and trust with our readers. If a customer is going to buy a mattress from you, he really needs to trust you, and contributing to a forum can help foster that trust.”
Welch says that he is sure that some of the regular contributors to his discussions are reaping business.
Customers have long memories. The Internet is a great reputation-building vehicle. It is possible to become known around the globe as a expert photographer, vintage car mechanic, or fine art restorer as a result of contributing to discussion forums.
The flip side is that it is just as easy to become known as a cheat or a braggard or a know-nothing. When contributing to forums, always be aware that your comments — and your follow-up — have the potential to ruin your reputation.
While Abby’s Guide has already met with a significant amount of success, Welch is excited about its growth potential. “My dream is that our forum will be known as a collection of well-meaning people who want to help other folks,” he says. “We want Abby’s Guide to be the kind of online forum that people will naturally gravitate to. People want to have their questions answered and feel that they won’t be made fun of just because they are clueless about a particular product. I think we have the beginnings of that now.”
What’s the Best, Apex, North Carolina. 919-363-7104. Craig Welch, owner. Home page: www.abbysguide.com