Trusted Advertising: The Value of Newspaper Web Sites
In 2010 comShare published a study titled “Site Matters: The Value of Local Newspaper Web sites” (sponsored by the Newspaper Association of America, representing some 2000 US newspapers) that “measured consumer attitudes and behaviors regarding local newspaper Web sites and content compared with other online sources of local news and information.” While the study discussed which types of online content consumers most trusted for local information, one remarkable fact emerged that bears discussion in this blog: Newspaper web sites ranked highest in terms of the credibility and trustworthiness of their advertising. This is an important fact missed by many newspapers; the fact that their web sites are more capable of selling than any other local sites. Someone please alert the newspaper sales department! Newspapers are not only themselves trusted brands, as discussed in my previous post. They are also purveyors of trust: some of the faith that people have in the reliability of local news rubs off on the newspaper’s advertising as well. Place an ad in your newspaper’s web site and people will more likely believe the message. When you add to this the fact that local news consumers are also well-qualified leads–they live, work, and make purchase decisions in the same market area as the newspaper advertiser, you start to realize the extremely high value of newspaper advertising. In other words, newspaper consumers are also, demographically, the most likely consumers of the advertiser’s goods and services. It is great news for newspapers that their web sites are the most trusted sources of advertising. But they now need to (1) market this message to their advertisers, (2) position themselves as a high-end advertising solution, and (3) price themselves accordingly. This means using a “page sponsorship” model, not cheap banner ads. Sponsorship is an old and well-tested model. Newspaper web sites can charge advertisers a fixed fee, not based on ad impressions, but on visibility to the highly qualified local consumer community, for a range of sponsorship placements. These placements can be anything from a logo appearing beside the mast, to co-branding the daily email newsletter, to display ads that follow standard IAB banner sizes but are not sold by ad impressions. Sponsorship ads should not look like the blinking, shouting, ridiculous banner network ads that clamor for attention in a typical web site. Those just add to the “banner blindness” effect. Instead, they should look like a message from a respected local business promoted by the newspaper. Or even better, display as an actionable message, like a coupon; something capable of demonstrating to the advertiser that the ad is indeed working. After all, the real value of a sponsorship ad is not that it tallies up thousands of nameless impressions, but the fact that real and potential customers will see and trust that...
read moreCapitalizing on News Assets
Noted journalist Bob Garfield is the author of The Chaos Scenario, a 2009 book about the collapse of traditional media. Garfield was recently interviewed by Peter Conti, EVP of Borrell Associates, an advertising and media industry research and consulting firm. (Garfield will be presenting the keynote address at Borrell’s annual Local Online Advertising Conference in New York City.) The interview, available on YouTube, is titled ‘The future isn’t in hyper-local news’ (an admittedly disheartening title for those of us in the local news industry). Mr. Garfield says: “The combination of incredible fragmentation, which limits your audience size, and the inexorable downward trajectory of advertising prices, means that nobody, nobody is going to have the critical mass to professionally and profitably deliver news. In my opinion, the future isn’t in hyperlocal per se, as a standalone operation. In my opinion, weirdly, the answer is going to be in consolidation. I believe that in every market, the winner will be the entity, whether it’s a local TV station, a public radio station, a local newspaper, a series of hyperlocal sites banded together, or some parties as yet unthought of, to form strategic relationships for content and for revenue, with other players in that market. And the combination of organizations that get there first, and create revenue streams while simultaneously becoming the central hub for news and information culture, in their communities, they win, they scoop the pot, and everybody else just disappears. Weirdly, paradoxically, this vast, vast fragmentation is going to lead to consolidation, and I believe, in market after market after market, winner takes all.” First, the assumption that advertising prices are in a downward trajectory isn’t entirely true. Banner advertising is certainly in a downward trajectory, as “banner blindness” and poor click-through rates show it to be ineffective advertising. But advertising models that pay off remain quite valuable to businesses. The winner in a news catchment area needs to be offering effective advertising, the kind that reliably and measurably delivers customers. Second, while Garfield speaks about markets being too fragmented to support hyperlocal news, he also notes that advertising will coalesce around one entity (local TV, public radio, or the local newspaper) that wins all the marbles. In this sense, he isn’t necessarily saying that hyperlocal is dead, but rather that one entity will ultimately need to cater to its market’s hyperlocal audiences. I suggest that the winner will simply be the news outlet that effectively captures the online medium. Newspapers, TV, and radio all have limitations. Newsprint is a static, fixed medium. Television and radio are not suited to browsing and “on demand” content. Radio today is typically delivered to automobiles, while TV is delivered primarily to the home. But online content is ubiquitous, searchable, available on-demand, and supports the full range of multimedia. It is print, TV, and radio all rolled up into one. And it can be carried in your pocket on a smartphone (not to mention the popular tablet form). Moreover, mobile news media can be coupled with effective advertising, like coupons, business directories, and restaurant guides, that also fit into your consumer’s pocket. For newspapers, this means mastering video and sound, as well as digital delivery methods. Newspapers have a great opportunity here: they typically produce more news story content, and can give voice to more hyperlocal content, than TV and radio, using more portable...
read moreWhere Did Newspapers Go Wrong?
About a decade ago, newspaper agencies began to lose sight of what advertisers were asking for, and at the same time they failed to monetize valuable online content, focusing almost wholly on one of the worst forms of online advertising: banner ads. They also ceded revenue from areas like classifieds and job postings to Internet competitors, and missed new online opportunities in areas like coupons, business directories, video infomercials, and email direct marketing. It’s little wonder then that newspaper revenues are shrinking. The question persists, how is it that Silicon Valley 20-somethings found it so easy to eat the newspaper industry’s lunch? Why was the industry so slow to adapt? This blog is about forward-thinking solutions, so I am not eager to dwell on what has already happened. The lunch has been eaten; it’s time to get a new one. Hindsight, as Malcolm Gladwell suggests in his essay “Connecting the Dots,” is subject to “’creeping determinism’–the sense that grows on us, in retrospect, that what has happened was actually inevitable.” (Although, dear reader, I do look forward to your comments in this regard.) Let’s just say for now that newspapers were neither staffed nor prepared to embrace digital innovation. But that time has passed, and digital opportunity is readily available, and comparatively inexpensive, to whose who reach for it. It’s instructive to look at the habits of advertisers, since advertising represents 50% to 75% of a newspaper’s overall revenue. While newspaper sales departments are still trying to sell print ads, local business advertisers have moved on to new and better ways to connect with their customers: Facebook business pages, YouTube branded channels, mobile business apps, email campaigns, online coupons, and much more, almost all of it online. Advertisers are spending money; record amounts of it. In fact, online ad spending has finally surpassed print ad spending. Just not at the newspaper. This has to change. It’s not an inevitable trend, it’s a blind spot that must be addressed. The 2012 projections are now in, following a substantial rise in 2011: “US online ad spending will post growth well above 20% again this year to reach nearly $40 billion, eMarketer estimates, as the internet continues to prove its worth to advertisers in a tough economic climate.” And we’re not just speaking about big business and national chains: “Small businesses are clearly on board with online marketing overall, but interest in mobile is up sharply, according to Ad-ology Research. More than 20 percent of small business decision-makers say they plan to commit more resources to mobile marketing in 2012, up from the 12 percent who said the same last year. Compared to previous years of the annual Small Business Marketing Forecast, the increased interest in mobile is striking: In 2009, just two percent of small businesses surveyed planned increased resources for mobile. Online video should also see increased usage with nearly a quarter saying they plan increased resources for online video, up from 18.4 percent in 2011.” In response to the clear demand for online advertising solutions, newspapers are offering little more than banner ads. According to one of my favorite and oft-quoted Pew Research reports: “Display and banner online advertising, for all that it has failed to grow, is still the No. 1 area of effort and the one that news executives pin...
read moreThe Fall of the Newspaper
For generations, local businesses relied on newspapers as the mainstay of their advertising budgets. In fact, until 1992, when TV and cable overtook them, newspapers were by far the largest source for overall US advertising spending, representing 37% in 1949 and dropping steadily to under 15% in 2008. And with that, the pundits began sounding the death knell for newspapers. Advertising Media Share chart by Martin C. Langeveld But for small and mid-size businesses, who cater to a more geographically local market, local newspapers continued to linger on as a critical source for advertising. After all, local news readers are well-qualified, targeted local business customers. The person reading the news is more likely to clip a coupon, read about your business, and walk into your store. Today, the local paper is itself no longer the primary focus of local business advertising spend. Newspaper agencies have seen their profits eroded as advertisers move away from traditional print advertising in favor of online, mobile, and social media. (In upcoming posts I’ll discuss where that ad spending has headed, and what newspapers can do to survive and even flourish in the digital age.) According to a 2010 report from Pew Research and the American Society of News Editors: “…the leaders of America’s newsrooms are nonetheless worried about the future. Fewer than half of all those surveyed are confident their operations will survive another 10 years—not without significant new sources of revenue. Nearly a third believe their operations are at risk in just five years or less. And many blame the problems not on the inevitable effect of technology but on their industry’s missed opportunities.” Newspaper Association of America print and online ad revenue chart 2010 With print revenue dropping, and online revenues almost flat, newspapers indeed seem to be headed for extinction. Hundreds of fine papers, large and small, have vanished in the past few years. The search for profitable models continues. Millions of dollars worth of “news experiments” have been funded by the likes of the Knight Foundation, the MacArthur Foundation, and others. A 2010 Pew Research report states: “Jan Schaffer of J-Lab estimated that since 2006, more than $141 million in nonprofit funding flowed into new media, a number that includes entirely professionally run sites such as ProPublica, headed by Paul Steiger, the former editor of the Wall Street Journal, as well as small ones, such as the Frostburg, Md.-based Appalachian Independent.” On March 17, 2010, Professor George Brock, Head of Journalism for City University London, stated in an inaugural lecture: “I don’t have a magic fix answer to the burning question of how we pay for sustainable journalism. I’m in good company: neither does anyone else.” With all these years of experimentation, why do the solutions still seem to elude the newspaper industry? I believe the answer is simple: the solutions are all around us; hundreds of startups are making money doing precisely what news outlets need to do today. But the newspaper industry seems oddly blind to these opportunities, or worse, views them the way a cancer patient views chemotherapy. Can newspapers bridge the digital divide? They can certainly go online; that’s a simple matter of applied technology. Can they transform themselves into “advertising centers of excellence” in a digital world without losing their journalistic integrity? I believe they...
read moreWhy Blogging Writes?
When I first conceived of this blog I had intended to write about the remarkable technical work that rocketed DNAinfo.com, the hyperlocal Manhattan news site, from 0 to 1.2 million visitors/month in about 18 months–something of a record in a town known for the competitiveness of its news outlets. (Here’s a link to an article that gives context for how my alma mater is faring in the battle for New York.) I can’t lay claim to the real driver of DNAinfo’s success–the remarkable editorial quality that made it so popular among New Yorkers. For that I have to credit the editorial staff, especially Leela De Kretser, who now runs the show. But like a proud father I had “bragging rights” to the technology that enabled that content. After all, while content is king, you can’t leave orbit without a rocket ship. (And while I may mix metaphors on occasion, I do know how to build those web-enabled rocket ships.) Technology almost always serves a greater business purpose. I’ve been a consultant to the Fortune 1000 for many years, and I’ve always told my clients that, before we embark upon a web or mobile project, we first need to look at the business case. We have to make sure we are solving the right problem; too many projects are completed successfully yet without actually making the business more successful. So I decided to turn that business thinking to the newspaper industry, and last year I co-founded iMedia Revenue in order to pursue not just technology, but to solve the real problems faced by struggling newspapers who must learn to think like digital media outlets (or face extinction). Blogging Writes is therefore a business blog, about the news industry, for the news industry. Technology is just one important component. What I propose are largely online (web, mobile, tablet) solutions, so whether you are an online news outlet looking to support yourself with online revenue, or a print newspaper looking to survive in the digital age, you’ll find more than valuable insights in this blog: you’ll find real actionable solutions. In Blogging Writes we’ll look at trends, business drivers, revenue models, and the technologies needed to achieve the business goals of the newspaper industry. An industry that is moving well beyond paper, much in the way that the recording industry has moved well beyond vinyl–and is managing to survive the...
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