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 and more searchable media.
Newspapers have assets that could position them well ahead of the competition, if they translate these assets effectively to online:
- News is among the most valuable online content (behind perhaps entertainment and pornography). Consumers spend a comparatively large amount of time on news properties, and return frequently.
- Newspapers have customers—tens of thousands of them. And in the case of subscription-based papers, they might even know who they are. Thousands of local consumers would likely sign up for a newspaper’s email-based newsletter, turning them into valuable advertising assets (“well-qualified local business leads”).
- Newspapers have advertisers—rolodexes full of them. While print advertising may be down, local newspapers know a lot of the business advertisers in their local area. They just need new advertising products to sell them.
- Newspapers are recognised brands. In many cases, the newspaper has served that community for generations. They are a trusted name, and as one Newspaper Association of America study indicates (which we’ll discuss in an upcoming posting), a trusted sales medium.
It’s easy to take a “gloom and doom” tone when speaking about newspapers, but in a world where content is king, and change happens with a mouse click (or a finger-tap), the digitally-powered newspaper agency can rise again.