eDiets.com Sells That Old Familiar Feeling

I have always admired online dieting company eDiets.com, in part because its success underscored important principles about how content makes money online. With 200,000 paid members at any one time (1.8 million total over its history), eDiets.com demonstrates that consumers will pay for sites that make content a service. By crafting genuine "plans" for dieting and backing them up with encouragement, 24/7 support, advisors, peer forums, and a ton of editorial, eDiets.com is more of a community than simply a site. The company hits all of the right e-revenue-generating notes.

So I was taken aback when eDiets launched a series of online magazines. These are literally digital echoes of the traditional print format—with cover pages with alluring tag lines, Web-based page-turning, fancy layouts, and full-page ads—which the company designers based on Flash. Currently, there are weekly issues that appeal to a general lifestyle reader and one with content targeted to diabetics, but up to ten more "personalized" magazines will roll out by Q3 2005 for low-carb dieters and other sub-segments of eDiet.com's 13 million free newsletter subscribers.

It's an impressive editorial project, but for a company that made its name with site-based Web content and a fee-based service model, this seems like a step backward . . . or does it? "We're seeing a 10- to 18-fold increase in clickthrough rates on ads because they are more engaging," says Georgianne Brown, VP of marketing services. In fact, unique visits to the article content is up 25% over the previous Web format.

I stand corrected. eDiets seems to be moving forward by moving a bit backward. Itself being one of the biggest buyers of Web marketing, eDiets heard many other sites chant the new mantra about online advertising's under-appreciated branding power, but remained unconvinced. "A typical banner ad is not an effective vehicle for branding," says Brown. Its own online magazine format evolved from an effort to bring an offline article of faith in publishing to the Web to "truly create the first online branding medium, a full-page ad with full command of the audience."

Clients seem to be responding. Every 24- to 34-page issue boasts about 10 ad pages, including a "marketplace" section at the back of the book like those you usually find at the end of a print pub. Kraft, Splenda, and Hydroderm have already signed on in the first month. eDiets is really sticking to the old world brand advertising model, too, by selling ads by the page and against a formal rate base. For advertisers, it is a steal at about $1,000 a page to one million sets of eyeballs, with premium sponsorship packages going for as high as $20,000. Still, consider that full-page ad rates at some women's magazines with smaller circulation are going for $100,000. Do the math. Online is still the best marketing bargain around.

Of course, "digital magazines" are hardly new. NewsStand, Zinio, and Nxtbook, to name a few, have been growing their stables of offline content brands that offer digitized print replicas for downloaded or in-browser viewing. eDiets.com's new version underscores a trend I see in the digital magazine space: users prefer a no-plug-in-required browser-based reading rather than being required to install a proprietary reader and download an entire issue for viewing. In response, Zinio, which was going strong with a reader-based product, recently released a browser-based delivery mechanism of its own.

Given these trends, I expect specific content sectors to start experimenting with hybrid models, which won't be right for everyone. About 65% of eDiets magazine readers say they like the look and feel of the digital replica edition and wish there were more publications like this. In the home and hearth monthlies, for instance, flipping through lush layouts and even oversized ads are part of the joy of "reading" them. How ironic if consumers start telling us that, after years of Web browsing, perhaps they want something that is the best of both print and digital worlds.

But that brings us back to the question we were asking in 1999: will users pay for those hybrid experiences? eDiets probably needs them to, since only about 10% of its revenues currently come from advertising, and its model is (and should stay) focused on fees. The plan is to sell subscriptions eventually, but I suspect that is where the model hits the wall, because that 1999 wall never really moved. Bringing the old magazine look and feel online does not mean the old offline subscription model will necessarily follow. Nice-to-have content is fine to sell print, but digital content still must meet a higher threshold to attract subscribers: must-have material that either makes or saves us money and time or that provides a service we can't live without.