Posted on Mar 28, 2012 in Newspaper Revenue | 1 comment

It breaks my heart when I read articles like a recent one by Michael Wolff of The Guardian describing the news industry’s “imploding business model” and “portending, once again, the end of the world as we know it.” (

His article describes why the growing trend toward mobile news is going to kill the news industry, because it will further erode revenue from CPM (impression-based) banner advertising. As if banner ads were a viable model for news regardless.

I suppose I shouldn’t be too surprised by the report; last month John Paton (CEO of Digital First Media, the second-largest media company in the US) said “And for God’s sake stop listening to newspaper people. We have had since the mid-90s to get this right and clearly we are no good at it. Put the digital people in charge – of everything. They can take what we have built and make it better. It is so very important we get this right – not just for the industry and investors – but for our communities.” (

As one of those “digital people” I’ve been working to transform the news industry by introducing digital media innovation, both on the newsroom and the sales revenue side. I generally work with clients to help them tailor a sales strategy that will work with their market and their editorial focus, but I thought I had better discuss in this blog some of the tangible options that a newsroom can bring to bear. And none of them are banners or paywalls!

If there is one thing I have learned from 20 years working in Silicon Valley, it’s that you have to follow the money: in this case, you have to analyze where businesses are spending their ad budgets.

And so that’s where I started, by looking at business advertising spend. For the past 3 years I have focused on local and specialty news outlets: those news and magazine publishers whose target demographic is either geographically local or psychographically tuned to both their audience and their advertisers. (In other words, where the advertisers are targeting, in the publication’s readership, a highly qualified demographic of consumers.)

So if my suggestions below seem too focused on hyperlocal and the “little guy,” let me point you again to John Paton’s blog so that you can see what the big media companies are doing (he’s particularly adamant about the value of getting the public involved: pay attention to his views on things like citizen journalism):

And it is true that print dollars are becoming digital dimes to which our response at Digital First Media has been – then start stacking the dimes. All of that requires a big culture change. A change that requires an adoption of the Fail Fast mentality and the willingness to let the outside in and partner…. The results have meant that at the Journal Register Company those dimes have stacked up to 5 times more digital revenue in 2011 than 2009. And those dimes now more than pay for all of Journal Register’s newsrooms. This is a performance about to be repeated at Media News Group.

Imagine that–a big news firm being able to pay for all its newsroom operations just out of digital revenue!  Want to try that yourself? Consider some of these options:

News Advertising Models That Work

Page Sponsorship: Impression-based (CPM) and cost-per-click (CPA) banner advertising models lead to low returns and “banner blindness.” Instead, manage your own ads delivered from your own ad server, so you can sell ads directly to your local advertisers–at 10 to 20 times the revenue that you would receive from CPM based banner networks. This means that you charge for premium placement in on a “page sponsorship” model that connects local consumers with trusted local business advertisers. Studies (quoted in my earlier posts) prove that newspaper advertising is the most trusted form of local advertising; this is how you justify premium prices for ad placement–prices that are still comparatively modest when you consider the return on other advertising alternatives.

Online and Mobile Coupons: Banner ads don’t have to be lead-ins to a landing page full of marketing copy. Join the online coupon revolution by delivering coupons from your business advertisers, directly to consumers email accounts and smartphones. Encourage merchants to accept smartphone-based coupons: heck, even airports now take mobile boarding passes! Coupons delivered via email to a smartphone can even have unique tracking codes placed into each coupon, for promotional tracking and auditing.

Online Newsletter Sponsorship: Offer paid sponsorship of the daily or weekly email newsletter, placing ads directly into the email newsletter where it will be seen by your targeted audience. Email-based banners can lead back to the advertiser’s site or to “landing pages” that you host for a premium fee, including pages that support video infomercials.

Infomercials:  While many editorially driven publications are wary of over-commercializing their content, video-based infomercial advertising pays well, and when the advertiser is well targeted to your audience, provides excellent returns.  (Tip: get local college students in multimedia arts to produce sales videos for your advertisers; this is a great way to drive local revenue and provide businesses with a valuable online asset that they can also leverage from their web and mobile properties.)

Advertorials:  Another “bad word” in the news industry, there are certainly acceptable uses for advertorial content, such as Restaurant Guides or Tourist Guides. (Surely no editor would have a moral issue with a restaurant guide with reviews.) Covering local businesses, or in the case of specialty publishers, covering relevant products and services, is both a service to your readers as well as a powerful source of revenue.

Self-Serve Classifieds: Yes, much of your classified revenue has been eaten by the likes of eBay and Craigslist. Why? Because marketplaces are a click away (who wants to make a phone call to place a classified ad?). We have found that a web-based interface that enables customers to type in and pay for their classified ads online still works very well on a news site or a specialty magazine site, because the readership is so targeted (to the local community or to a specialty topic). Your staff can still monitor and approve the classifieds and deliver them for both print and online publishing.

Self-Serve Box Ads: More powerful (and just a bit more expensive) than classifieds, online self-serve box ads enable budget-conscious business advertisers to create and purchase a text-based color ad for both print and online delivery. (You can also offer simple logo upload and other premium options.) Our customers at newspaper sites have reported sales from $30 to $90 for online box ads that run in a weekly advertiser.

Online Business Directories: Support your local business community with business and trades directories (Patch does!). Start easy, with Restaurant Guides, Find a Tradesman, Chamber of Commerce listings, Street-by-Street business locators, and other types of business directories that offer premium (paid) listing upgrades. Due to the cost of developing a local directory, we recommend partnering with the local Chamber of Commerce and merchant associations to get the initial content.

Email Campaigns: While you may not want to get into the spam business, you do have a very valuable (and targeted) list of subscribers. Under certain controlled circumstances, you can offer email campaigns on behalf of local advertisers. Email campaigns must be carefully managed and CAN-SPAM compliant, but they do pay well. Make sure your privacy policy is in line with your use of email address data; in other words, make sure that your readership knows that if they sign up for a newsletter, or enter a sweepstakes that you sponsor, or fill in a survey, that their email address may be “shared with carefully selected businesses” for marketing purposes.

Give Them What They Want!

Consider a novel approach: offer the digital services that local business advertisers are already seeking. Newspapers aren’t generally known for technology expertise, but a news outlet can re-tool themselves into an “online advertising center for excellence” by joining forces with a solid technology partner. The news agency provides the trusted brand identity, the technology partner provides the online services, and both split the profits.

Here is what businesses are buying:

Mobile Web: Offer mobile web sites that enable a business to get their message across to a growing smartphone-enabled audience. Mobile web sites can cost as little as $500 to build (depending on what the site needs to do it could get complex and expensive, so there is no typical high range, except to say that local businesses are almost always on a budget).

Mobile Apps: Sometimes a mobile web site just isn’t enough. Apps are a popular and creative way to offer value to the consumer. There are several app foundries that will enable you to resell apps to your business clients. Each app is unique and requires custom development, so prices vary. The goal is to make you the trusted, reasonably priced alternative to having the business locate, hire, and manage a mobile app developer themselves.

Web Sites: Once the bread-and-butter of the web development firm, business web sites are now highly commoditized, and can be standardized on popular, easy to maintain, and feature-rich content management and blogging platforms like WordPress (as in this blog site).

Online Catalogue and Shopping Carts: Your local business advertisers may need to sell a catalogue of items online, using an industrial-strength shopping cart and catalogue system (like Magento). These systems can include back-office stock integration (with Sage or a similar system) and even DHL/UPS shipping integration.

Facebook Business Pages and YouTube Private Channels: Local businesses are keen to have their own Facebook and YouTube pages, but they don’t always know how to set them up, nor how to manage the content and social marketing. News outlets can provide a social boost as well as serve as the trusted source for social media services.

Google Adwords and Bing Campaigns: Search is a big online money-maker: businesses want to be found by their target consumers. You can charge a fee to administer and manage pay-per-click campaigns for your local business advertisers This would typically be offered as part of an SEO package.

SEO Services: Newspaper sites enjoy unusually high page rank as a result of their status with Google and Bing as news agencies. This means that links from a news site to a local business advertiser will help that advertiser’s SEO rank. You can also provide SEO consulting (providing basic tips on how to improve the SEO of advertiser sites) for a fee, as part of an overall advertising package.

Domain Hosting and Business Email: When offering other online services, a small percentage of clients will inevitably ask whether you can handle their web site domain and email hosting. So offer these services for a nominal fee, with profits split with the technology provider who actually does all the work.

So find yourself a technology partner and start leveraging your trusted brand identity to cash in on what your business advertisers are asking for!

(If you follow this blog you know that I don’t like to commercialize it, but my marketing director is hopping up and down, so let me just mention that my company, iMedia Revenue, is just such a technology partner and provides a platform for all of these revenue models, and more. Nuff said.)