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Salon's Bargain: View Ads, View Premium Content

In an effort to bump up its ad revenue, culture-and-politics site Salon.com has begun offering temporary access to its premium content in exchange for viewing a four-screen ad.

Salon visitors clicking on an article tabbed for premium subscribers can gain access to it by viewing a four-screen commercial for the Mercedes-Benz E-Class sedan. The ad, designed by Mercedes' agency, Critical Mass, features interaction options like spinning the car, clicking on parts of the car for more information on its features, and subscribing to receive an opt-in e-mail with more information from Mercedes.

After viewing the four screens, users are rewarded with a Salon Premium day pass, which gives them entree to the 20 percent of the site that's normally reserved for the site's 41,000 paid subscribers. A yearlong subscription to Salon costs $18.50; a monthly pass costs $6. Salon also offers an ad-free annual subscription option for $30.

Recently launched ad-technology company Ultramercial produced the four-screen ad, which is its first full-screen, multi-page online commercial.

Dana Jones, president of the Rancho Palos Verdes, Calif., company, said the new format could be a boon to the online advertising industry.

"There's been an implicit agreement between the advertiser and viewer: we pay for the content and you watch our advertisements," said Jones. "Our proposition is we make that implicit arrangement an explicit one. There's no cat and mouse."

For advertisers, Jones said it offers guaranteed viewing at a time when many Web publishers have cluttered their screens with ads to bump up ad inventory to make up for low CPMs. The Mercedes promotion is more of a "surround session," as day pass users are served Mercedes ads on pages throughout the site.

In addition, the four-screen ads offer interactivity and the chance to collect opt-in data. Jones said the Mercedes ad "significantly outperformed" other opt-in campaigns the company has run. Finally, Ultramercials can ease some of online advertising's stigma, in the wake of user furor with intrusive ads like pop-ups and pop-unders, by offering consumers a tangible reward for viewing advertising.

Since many Web users still do not have broadband Internet connections, Ultramercials are kept to a maximum file size of 300 kilobytes, combining Flash and standard elements like HTML, GIFs and JPEGs.

For Web publishers like Salon, the format could offer a middle way between a subscription model and an ad-supported approach, as they fight a persistent ad downturn. By tapping into the Salon users not on subscription plans, the company can increase ad revenue in exchange for access worth 5 cents, based on Salon's annual subscription.

To stem its losses and fight the online advertising slump, Salon unveiled its subscription plan in April 2001. With many its first renewals up this year, Salon has experienced a renewal rate around 65 percent. At the end of September, the company reported having 41,200 subscribers.

Salon's financial condition for the last year has been perilous, after racking up nearly $80 million in net losses since its 1995 launch. In the first six months of the year, the company took in $1 million in advertising revenues and $900,000 in subscription revenues.

In its quarterly report earlier this month, San Francisco-based Salon listed just $266,000 in cash and cash equivalents. For the three months ending in September, Salon reported taking in just over $1 million in revenue and racking up a $1.4 million net loss.

Jones said Ultramercial is in talks with three other auto manufacturers about running ads, while a number of publishers have expressed interest. So far, however, Salon is the only publisher to commit to running the new format.