Where to invest, in technology or content?

Where should publishers be investing their Web dollars, in Web site development (i.e., programming), or in content for their web sites? In a perfect world, both, of course, but dollars are finite, so publishers must typically choose one over the other.

Which one you choose is really a function of where your sites are in the e-media lifecycle. My guess is most publishers would say the same thing that Tad Smith said in the October 2007 edition of Media Business: "To me, a dollar spent on site engineering is better than one spent on building editorial content."

This is certainly true if you can leverage that investment across many sites, which obviously any multi-title publisher can. However, once your digital house is in order and your sites are updated with modern functionality that users come to expect (good quality search results, related articles, multimedia such as video or podcasts, blogs, community, etc.), then there is a diminishing return to that mass-replication approach.

I would argue that there becomes a tipping point in a Web site's lifecycle at which dollars invested in new content yield a higher return than dollars invested in site engineering. After all, people are coming to our sites not for functionality, but for original content. Sites that invest in electronic content that is unavailable anywhere else, in a format that cannot be replicated in print, will have an advantage against those that don't. I'm not talking articles written by a web editor. I'm talking image libraries, video libraries, databases, clever mashups, things that the Web is suited for.

Any publisher whose electronic edge over the competition is solely based on technology can't expect to outrun that competition for long. Technology is constantly getting cheaper, and a competitor that's behind you today will leapfrog you tomorrow with a newer site, spiffier content management system, better design, for less than what you just paid for your new sites. Technology is not only a low barrier to entry, it's arguably no barrier to entry.

With due respect to Tad, I'm going to say that in the long run, a dollar invested in content--the right content--will always provide a higher return. True, it's not repeatable across multiple web sites, but B2B magazine Web sites, like the publications themselves, are not factories. If all your investment is going into lowest-common-denominator functionality that works in all markets, it means you're missing all the good stuff that is specific to your market.

Several years of steady investment in unique digital content unavailable anywhere else raises an incredibly high barrier to entry to any would-be competitor, allowing a publisher to lock in audience loyalty and steady profits for years to come.