Monetizing Value-Add

Page 1 of 3

It's a given with information professionals: They pay for information if there is sufficient value-add attached to it.

That's the rationale they give to management when asked, "Why are we spending money for online information services when it's all available for free on the Internet?" The first answer to that question should be, "But it's not all available for free on the Internet. Some of it is on the hidden Web; some of it is on proprietary, subscription-based sites; and some of it isn't in electronic form at all." As more and more previously free sites move to a pay per view model, the case for paying for information will inevitably strengthen.

The second part of the answer is more subtle and involves a contrast between surfing the Web and searching structured, fielded, indexed, and abstracted subscription-based information services. The value-added by database producers and information creators enables users to quickly and accurately pinpoint relevant information. No fruitless forays to numerous Web sites, no constantly tweaking search terms in a Web search engine hoping a good page will show up in the results. Although there is an invoiced cost attached to a search in a fee-based source, the cost of users' time while poking around the Web is equally valuable, though not as explicit and obvious.

The other side of the coin is value from the content creator perspective. How does adding value pay off for authors, publishers, producers, and aggregators? Does the economics of information creation make it worth your while to spend the time and hire the people to add that value? Can the value-add process be automated to minimize the cost to creator while, at the same time, enhancing the data feed?

Value is as Value Does
Before getting too far down the road as to whether it's worthwhile to add value, let's try for a definition of value-added when it comes to electronic content. The term "value-added" has a variety of meanings, so it's a good idea to clarify what you mean or you will end up at cross purposes with your audience. To the IT community, value-added implies network access. It's a quantifiable technical term with its own acronym: VAN for Value-Added Network. To the business manager, investor, and financial analyst, it's part of EVA, Economic Value-Added. This is a financial performance measure based on, according to Stern Stewart & Co., "a formula of net operating profit minus an appropriate charge for the opportunity cost of all capital invested in an enterprise" ( The term actually originated with the economics profession, which compared value of raw with finished products.

As a more general term, value-added simply means anything that will enhance productivity; that will make a business, department, or product run more smoothly and perform better. Corporate information centers have struggled with how to add value to their services. This frequently translates to expanded reach-providing services to departments not previously served-and innovative delivery of service. The notion of the virtual library, putting information sources on corporate desktops, analyzing and synthesizing information, and collaborative deployment of information are intended to increase overall productivity and increase corporate profitability.

In the econtent space, value-added equates to the difference between undifferentiated, unstructured data, and information people can find quickly with no difficulty. Take the example of an article on stem cell research. The level of information, the type of data included, the complexity of the writing style, and the accuracy of the information will vary significantly depending upon whether the source is a scientific journal, the local newspaper, a political tract, or a tabloid publication. Having these distinctions vetted before you retrieve the data can save you from relying on sources of dubious reliability. Another example: corporate directory information. You're looking for the address of a company. If the source you're consulting has the data parceled off into fields, you can find the company that you know is in River City rather than the company with River City in its name, which may no longer be in River City.

Page 1 of 3