GolfServ: Doing One Thing Very Well


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Much like push technologies, broadband portals, or selling pet food, syndication was one of many online business models that never really panned out. Sure, the Web made it easy to parse and distribute your content to countless partners around the world. But with so much content floating about through so many channels all at once, it was awfully tough for any but the most specialized publishers of high-worth material to realize much more than a revenue trickle from these redistribution schemes.

Many of the chief syndicators (i.e., ScreamingMedia, YellowBrix) repositioned themselves as technology providers for the enterprise, and most publishers gave up on the dream of people paying to see their content on other people's Web sites. One diminutive but fleet-footed company, Chicago-based SirenServ, is a veritable case study in the art of retooling a flagging syndication strategy for success. With a mere seven full-time employees, its GolfServ brand is the main golf news supplier to Yahoo! and Golf.com (NBCSports), while its Web-based personal golf utilities have been a longstanding mainstay at NYTimes.com, AOL, CNBC.com, and CNNSI. Profitable throughout 2002, SirenServ has its finger on one syndication approach that remains compelling and still wide open for innovation: do one thing exceptionally well...but do it everywhere.

From Syndication to Subscription
"Syndication for us is really a marketing strategy rather than a revenue-producing strategy," says co-founder and CEO Michael Lazerow, who not coincidentally also founded another syndication success, University Wire. The real cash cow nowadays is premium content, a $30 a year membership for discounts and advanced personal golf tracking utilities. This was not always the case, however. When Lazerow and Kathryn Savarese Lazerow (partners then, married now), and tech guru Michael Casparnow launched GolfServ in 1999 across 100 partner sites, straight licensing fees from major media sites were the main revenue stream: the money that built the company.

GolfServ offers major publishers and broadcast brands online a true turnkey solution that targets a highly lucrative and passionate niche—golfers. It started as a set of utilities that helped players find courses and track their own performance. Now it includes extensive golf news and real-time tournament coverage from a vast network of stringers and feeds worldwide. The company fully hosts these golf areas but brands them for the partners. It is the classic model—often touted, but rarely executed—of making something once and reusing it many times. "With seven people we produce one site that we can make look like any site on the Net," says Lazerow.

While advertising has been a piece of the revenue mix from the beginning, GolfServ survived and now prospers because it always relied on cash up front, either from licensing fees in the early stages or currently from subscriptions. While syndication got the company off the ground in 1999, the model hit the natural wall of market saturation once GolfServ had partnered with most of the major venues over a year ago, and many of those who survived the Internet and ad busts had to re-evaluate their expenditures "We're not out of the syndication business," says Lazerow, "but with the 200 sites that we have we have tapped out that revenue stream."

Major media sites partner with content distributors who bring a working revenue model to the table, however, which is what GolfServ now does with its ad and subscription models. In less than a year, the site has moved about 30,000 of its 500,000 registered users into pay services, which may not sound like a windfall, but consider that this is a niche product that operates with a small staff and it is almost on par with Salon's subscription program in less time. The important part is that the model lets Lazerow approach partners with cash in hand, a proven revenue stream that is shared with the sites that carry GolfServ. The deals vary, but typically, a site gets about 25% of the subscriptions it is responsible for leading to GolfServ services.

Chipping Into the Niche
In exchange for the revenue share and the content, GolfServ gets traffic and lots of it, which it leverages with marketers. A typical month will bring in 20 million page views, but on months when there is TV coverage of a major golf event, GolfServ can see up to 100 million page views. And this is highly targeted traffic, golf fans, who are precious to the relevant suppliers and general sports apparel companies such as Nike.

One of the smart moves GolfServ made early on was retaining control of much of its advertising inventory. A lesson learned by other syndicators: Ad revenue sharing rarely works well when the partner controls ad sales. Consider the math for the sales staff. If you have a choice between selling inventory from which you realize all of the revenue or inventory from which you realize only part of the take, which batch do you sell hardest and first? With this in mind, GolfServ always ensured that it maintained control of at least half of the ad inventory that was being served to partner sites.

So now, with many of the major golf-related destinations powered by GolfServ, the company can offer relevant advertisers multilevel campaigns into a very passionate, high-spending niche with a single insertion order. Major client Nike, for instance, has a co-registration deal netting them 3,000 names a day, email marketing into the GolfServ database, plus top line sponsorship on the network and sponsorship of the British Open leaderboard. All of this was on a single invoice and it both stretched the client's brand across scores of major sites, as well as drilled it into direct response via the in-boxes of hundreds of thousands of golfers.

Thus, it's no surprise that ad sales have become much more attractive to Lazerow and Co. than syndication fees. "Our average ticket for advertising is $50,000 per campaign," he says, "compared to syndication deals which are closer to $12,000 a year, and there are fewer of those." The company also has been profitable throughout 2002. But it might not have gone this way.

Avoiding the Traps
The GolfServ model was working so well and seemed so compelling that the company renamed itself SirenServ in 2001 as part of a strategy to branch out into other content areas using the same approach. Fueled by an investment from major and early partner The New York Times, SirenServ plumped its staff to 25 and readied GourmetServ and GoodHealthServ for a planned launch in late 2001.

Amidst the general Web collapse (which was probably a blessing in this case), and initial development, the company cancelled these expansion plans and in the process reiterated one of the secrets of its own success, sticking to one's own knitting. In some ways, SirenServ discovered what so many Web startups had learned when they, too, tried to dotcom an existing market segment. Sure, the same platform and basic resources powering GolfServ could be amortized across these new ventures. "But this was less of a business model issue," says Lazerow. "Each market is a whole industry in itself, with its own players, and we would have had to build out three separate companies. The cost savings for technology were good, but the business costs weren't."

In fact, the business model around GolfServ could be spun off into other content areas. While most publishers have contracted their ambitions in recent years, realizing that not every destination needs to be a full-service portal, there are many sites that could benefit from a third-party provider of health or cooking content and utilities. If the syndicator can make it cheap and easy for a site to turn on, then the content provider truly can aggregate all of that targeted traffic from multiple sites and sell it essentially as a niche network to relevant ad clients.

But in the end, it comes down to the quality of the content and dedicating yourself to doing one thing that you know you know and doing it really well. Keep in mind that GolfServ amassed all of this lucrative traffic without directly marketing itself to consumers. The partners drove all of those page views and ad impressions. As Lazerow advises, "Spend the money on making the product better and not on buying eyeballs. If you show [visitors] that passion back and show them you are going to look after them, they will reward you with their loyalty, with traffic, and with money."