STRATEGY
Having incubated multiple companies including formula1.com and 3B, Purple started helping new and existing web businesses with strategy. This has tended to be a mix of marketing and business strategy.
Segmentation
On the marketing side, many web sites have a tendency to treat their audience as a homogenous group which can be a big mistake. In the case of motorsport Purple identified a number of segments and the sticky content that each group needs. This is a proven model as formula1.com became the leading site covering the racing series. From its launch in 1998 the racing site grew to an audience of 1.4m monthly unique visitors over four years with only nominal marketing spend.
An motorsport segmentation example:
- Petrol heads => Exclusive interviews and videos, insider news about latest tech developments, tech articles, discussion forums, car photos, live polls during race, searchable archive of all results since the series started, tickets, merchandise, fantasy games, screensavers, mailing list
- Water cooler gossips => Results and standings on the home page, controversy and gossip, general games, mailing list
- Glamour fans => Driver photos, celeb photos, pit girl photos, private life gossip, general games, tickets, merchandise, screensavers
- Insiders => Insider info especially re staff moves, sponsor news, funding news, business news
- Disenfranchised (no free TV coverage) => live timing, live textual coverage, live polls during the race, photos within 2 minutes of end of race, mailing list
Betting
When it comes to sports, betting is often a key source of revenue. While other companies signed exclusive betting deals, the sports sites where Purple consulted were advised to segment the market. So you have odds betting, pools betting, lotteries, spread betting, poker and other casino games. Many of these don't see each other as direct competition so by signing a global betting deal with one party a web site is leaving money on the table.
Watch this space for some innovative business models which will be launched in the near future for Virtual Worlds, shopping and classifieds.
BUSINESS MODELS FOR SPORTS SITES
Purple started in 1994 at the dawn of the web. On the business strategy side the web has struggled since these early days with monetizing traffic. There are phenomenal business machines like Google, and then there numerous content businesses that struggle to cover their costs.
Purple helped to create several of the early sports web sites, but to run a sports site as a business the key is to have multiple business models and not rely on just one or two. Formula1.com was a good example, where the revenue streams were from:
- sponsorship and advertising
- ticket sales
- merchandise sales
- syndication of content
- subscription for fantasy games
- subscription for premium content
