Tag Archives: Advertising

The Newspaper Publishers’ Dilemma – Is $179 Million the New $890 Million?

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Recently, the Washington Post ombudsman Deborah Howell wrote a piece entitled Ten Ways To Keep A Newspaper Strong.  As ombudsman Ms. Howell’s job is to represent the public needs to the paper.  I’ll break down her 10 points here and highlight how pursuing these suggestions put the publisher of the paper in a revenue dilemma.  This is the dilemma of all newspapers moving to the Internet and the subject of my MA Thesis, exploring online economic sustainability.

(1) Exclusivity is a virtue. -she touts the content of the paper as being unique but do KidsPost, the Style Invitational, Federal Diary, In The Loop and Dr. Gridlock generate enough revenue to achieve economic sustainability?  What about the columnists she mentions?  The New York Times found out the hard way that putting their “unique voices” behind a pay wall was an untenable revenue model, Times Select folded after only 2 years due to a lack of paying subscribers (roughly 220,000).  In the age of the Internet where there are virtually unlimited voices, the New York Times overvalued the draw of their columnists voices.

What is exclusive in the current online landscape?  Twitter I suppose, ironically they have yet to develop a revenue stream. They recently turned down a $500million acquisition offer from Facebook.  This tells me they are either attempting to create their own revenue stream (not intrusive advertising, probably selling their user data for analysis), or considering A higher offer as their exit strategy.  Either way, the point is that “exclusivity” online almost does not exist.  A newspaper’s online value proposition should be “fulfilling an unmet need” usually this means just covering news and reporting it.  Where did people go when terrorists attacked Mumbai?  They didn’t go to find columnist commentary and opinion, the sought to find news coverage.

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Newspaper Thesis Part 3 of Many

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Continued from:
Thesis Part One
Thesis Part Two

Translating Value Into a Revenue Stream

Selecting an Online Revenue Model:

After determining how value is created for an important community of users, and considering how this value can be maintained in a competitive environment, the next critical question is how value can be translated into recurring revenue streams.

Start with developing a set of criteria against which to evaluate revenue options:

-Alignment with the mission of the site
-Fit within your staffs capabilities
-Agreement with you core competency
-Fit within your IT infrastructure
-Level of risk to bottom line and reputation
-Additional benefits

Use Your Criteria to Evaluate Existing Revenue Streams:

Newspapers need to generate an economically sustainable revenue stream or their best plans for innovation and growth may never be realized. The purpose of this paper is not to promote a generalized revenue solution for all newspaper websites, indeed no such model exists. Using the criteria gathered in the previous section, apply them to existing revue options including these below:

1. Acquiring another company as a hedge against current newspaper revenue streams.
2. Get a Non-Profit designation and serve your donors best interests.
3. The advertising only revenue model (current model of most news sites, NYTimes.com, LATimes.com, Washingtonpost.com)
4. Utilizing a pay or partial pay subscription revenue model (FT.com, WSJ.com, Economist.com)
5. Advertisement Types
. Ad agency generated Display Advertising (standard IAB ad sizes, cpm, cpc, very low $performing)
. In-house Display ads (better performing)
. Expandables (do you want to allow it?)
. Overlays (do you want to allow it?)
. Microsites (do you have the resources to manage these?)
. Advertorials (do you want to allow it?)
. Competitions (do you have the resources to manage these?)
. Sponsorships (probably the best return on investment, best performing advertisement, requires good site mapping and cms)
. video pre-roll (good when you are already serving up video content)
. video post-roll
. Email display ads (alerts, newsletters)
. Surveys (grant corporate surveys on your site, for a fee of course. Economist.com)
.Pop-unders/ Pop-ups (never ever use these, you will lose readers)

1. The Acquisition model:
If you are comfortable with operating at a loss or breakeven, then continue giving away your content for free and relying on advertising revenues to support operations. You must purchase another company however with a revenue stream that acts as a hedge against what you are doing. Some large corporations that are already diversified (such as The Washington Post, CNN, and News Corp.) are already benefiting from a diversified revenue model.

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LA Times has sold more that $686,000 in Obama merchandise

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The Las Angeles Times Newspaper has sold more than $686,000 worth of merchandise related to the election of Barack Obama winning the presidential nomination on November 5, 2008.  This according to Ron Hasse, director of circulation sales and marketing for the L.A. Times.

Here’s a link to their e-commerce site

If you have more money, check out the New York Times e-commerce site

Newspaper Job Boards, Reconnect With Your Community in 2009

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In my thesis research I revisited some old stats I had on job listings and was shocked at how little those numbers changed. The US state department predicts another 1million jobs lost in the united states in 2009 if things don’t turn around soon. With that in mind, wouldn’t it be wise for newspapers to bring their job board costs in line with Craigslist?

In 2007 Craigslist was charging either zero or $25 to post jobs depending on the city. A quick look at newspapers sites reveals that 1. They partnered with monster, Careerbuilder, or Hotjobs for their Jobs section. 2. They charge on average $400 to post a job! How the heck is this justified when looking at the reach of craigslist vs. everyone else?

As for Website reach, here is 2007

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Newspaper Thesis Part 2 Of Many

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…Continued from newspaper thesis part 1

Why are newspapers in such bad shape? 1) Reduced Cashflow: Newspapers rely on fat revenue streams generated by print advertising revenues and paid print subscription revenues. The cashflow being generated by these revenue streams is barely large enough to service debt. 2) Debt Obligations: “Newspaper companies have been skipping loan payments, missing financial targets in debt agreements and accepting higher interest rates in exchange for more flexibility”. -also read AJR.org article

With the decline in print, what is the expense implication?

. The savings on paper, production, circulation sales and delivery would slice at least 35% off a typical newspaper’s expense base in one swoop. -from Poynter Institute

Why did people historically subscribe to / buy print newspapers?

· THE ONLY GAME IN TOWN: Prior to the ubiquity of high-speed broadband connections and personal computers, newspapers had little competition. Radios were for listening to and televisions were for watching. (This is the only reason. Do not even try to think it was because your company was so awesome people didn’t want something else.)

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Newspaper Thesis Part 1 Of Many

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I could bury this thing somewhere, but I figure I’ll use this platform to work through this paper here.  Comments are welcome.

M.A. Thesis Statement:

While publishers are afraid to lose readers , free newspaper websites are untenable.

Newspapers’ current online advertising only revenue model is failing to supply sufficient cashflow for servicing current and long-term debt. Developing a diverse set of revenue streams is the most secure path to achieving ongoing financial sustainability.

1. I present the current state of the newspaper industry to defend my statement that; The current free model is untenable.

2. I then explore different revenue models that news site and other websites use both successfully and in failure.  I highlight my case that news sites using diverse revenue streams are financially sustainable.

3. I bring it all together with my conclusion that; The most important reason free newspaper websites are untenable is because they do not posses a diverse set of revenue streams to create a sustainable economic model.

CONCLUSION:
In conclusion, although publishers are afraid to lose readers, free newspaper websites are untenable for two main reasons.  First, news sites using a hybrid subscriber and advertising revenue model are doing well. But more importantly, free newspaper websites are not generating enough advertising revenue alone to sustain operations.

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Improving Time Spent On Newspaper Sites, Is It Important?

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Editor & Publisher reported on November 19, 2008 that “time spent at top sites still declining”.  You’ll notice that Drudge report, a link site which sends its readers away, isn’t even listed in their report but if it were would be Number One with 00:59:39 time per person (hh:mm:ss) go figure.  

Time per person is not the only or best way to measure the performance of a site.  There are many ways to measure website traffic.  WebAnalyticsDemystified.com is a great resource to learn more about measurement techniques and visitor engagement.  They have a Free white paper available for download HERE.  

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The TypePad Journalist Bailout Program – Newspaper Journalists Take Note

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The TypePad Journalist Bailout Program

Hello, recently-laid-off or fearful-of-layoffs journalist! We’re Six Apart (you know us as the nice folks who make Movable Type or TypePad, which maybe you used for blogging at your old newspaper or magazine) and we want to help you.

We’re a company founded by bloggers, and we’ve supported online journalism from the beginning. During a time when so many great journalists are worrried about losing their jobs, we want to do what we can to help. So we’ve put together a program to put you on your first steps towards independence.

The TypePad Journalist Bailout Program is FREE. But unlike the Fed’s financial bailout, this program will actually end soon. Just send us the link to your last piece for a newspaper, magazine or broadcast journalism venue to bailout@sixapart.com, and we’ll take care of the rest.

–Visit Typepad to learn more and good luck!

WSJ.com and FT.com Subscription Revenue Jumps 15% in 10months!

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January 2, 2008 from paidcontent.org: “a new report from Bear Stearns analyst Spencer Wang. WSJ.com revenue is currently pegged at $78 million annually, based on an estimated 989,000 subscribers paying $79/year”

November 5, 2008 from paidcontent.org: “WSJ.com is making more than $200 million from advertising and subscriptions, News Corp Chairman and CEO Rupert Murdoch told analysts during the company’s earnings call. He said the site is making “probably $100 million in subscriptions and certainly over $100 million in advertising.”

So either this information is inaccurate, or the site is really growing its paid readership. It is definitely probable that the current economic climate is raising interest in the publication. After all, the Financial Times Publishing unit announced that sales were up 14%, with ad revenue up 1% for the first 9 months this year. Awesome considering the world economy is down about 40% this year!

This reinforces the notion that people are always willing to pay for good information. Henry David Thoreau wrote that “A truly good book teaches me better than to read it. I must soon lay it down, and commence living on its hint. What I began by reading, I must finish by acting.”

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Forget Newspapers, All Advertising Reliant Businesses Are Hurting

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Just because it’s “new media” or something other than newspapers, doesn’t mean it’s immune to advertising revenue declines.  Keep the following in mind when bemoaning the accelerated slide in newspaper revenue.  So what can be done to offset declining advertising revenue?  Paid online access?  The Wall Street Journal does it, to the tune of ~$100million a year!

1. Gawker Media is consolidating their Silicon Valley blog Valleywag into Gawker.com.

2. Conde Nast has laid off roughly 60 people November 11th from CondeNet, the company’s internet division.

3. Al Gore is doing no better!!!  Current Media, the cable network co-founded by Al Gore also just laid off about 60 people.

So should Newspaper sites go for a paid online revenue model?  The current market conditions are highlighting a problem everyone knew already existed.  Having only one revenue stream is an untenable long term business model.  Newspapers need to figure out how to give away the bulk of their information, and make their most valuable offerings, subscriber based.

WSJ.com does this quite well.  Can your paper’s site do this?  If your paper has nothing worth charging a subsciber for, then it’s time to take a long hard look at what value you are providing your readers and subscribers.

Historical Moment Temporarily Lifts Newspaper Demand

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The newspaper industry’s first foray into Print-On-Demand proved to be a disaster.  The historical election of Barack Obama as the first African-American of the United States seems to have taken the newspaper industry by surprise. Monumental events cannot sustain this industry alone. Next week when everyone has gotten over their memento hangover and the prices for stolen newspapers subsides on Ebay, the newspaper must return to the reality that print circulation is falling off a cliff.

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Obama Wins! Newspapers Sold Out / Stolen by 8am

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Did newspaper publishers not expect there to be a staggering demand for newspaper headlines this morning? If Obama lost, the headlines would have no doubt been filled with news of a stunning defeat and the news of the reaction from just under half the United States population. If he won, as he did, the headlines would have been as historical as the Moon Landing (and it is). Demand for newspapers will be HUGE.

Every major newspaper in metro New Jersey was sold out this by 8am. Being in the newspaper industry, I already had procured some great publications and even one Printing Plate! I drove around looking for more mementos and catchy headlines and was amused by what I found. Empty racks everywhere. The owner of my local bagel store asked me why everyone was looking for a New York Times. He said, “I get 9 every morning and every afternoon I have to send back 5 of them. Today one man came in and bought all 9!”. I explained to him that although some local newspapers remained on his rack, The New York Times is an Iconic paper and that’s why people snatched it up. I was most surprised by how few papers he received on a daily basis.

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Calligraphy to Press! (CTP) …and you thought setting type was tough?!

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From ilovetypography.com on Vimeo.

“The Musalman is probably the last handwritten newspaper in the world and has been operational since 1927. Here is their story”.  A film by by Premjit Ramachandran.  Shows these artisans laying out newspaper pages BY HAND, I thought a linotype machine was tough!.  Clicking the images will take you to the videos.

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Refocusing Newspaper Content

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Before widespread internet usage, newspapers needed to have in-house staff covering every aspect of their content. The ubiquity of the internet has destroyed those old needs and has opened up new opportunities.

THE PATH TODAY
Newspapers are attempting to succeed by operating in the old information paradigm.

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Google Pushing Advertising Innovation and Driving Revenues in a Bad Economy

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As the publisher of this news site, it was reassuring by an email I received this morning.  As someone interested in newspaper innovation, it gave me pause to wonder at what my own beloved industry was doing to innovate and meet demands in this new information paradigm.  When I see PetMed ads. appear next to nobel prize winner Paul Krugman on NYTimes.com, I know more can be done to improve ad performance.  Here is the email I was sent:

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Flexible Display Technology Will Not Generate Print Revenues

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Newspapers charge advertisers hefty sums of money for advertising in their print products. A one-time full page advertisement in The New York Times can easily cost $160,000. How many people read it / saw it? Half a million? One million? One million times 2.5? who knows?  That’s the beauty of paper. It cannot generate accurate advertising metrics.  Unfortunately for newspapers, print circulation is falling like a… finish this phrase.

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The Future of Guerilla Advertising? MoveOn.org Hits A Homerun!

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Great Example of Viral Marketing by MoveOn.org

If i wasnt going to vote, I am now. Click to view.

If i wasn't going to vote, I am now. Click to view.

And the follow up letter days later.

Dear Robert,

Wow. Thanks to people like you, this nonvoter video has now been sent to over 6.3 million friends. It’s going out to more than 30 new people per second.

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Free Advertising Ideas For Newspaper Publishers

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In a recent interview Gigaom.com creator Om Malik alluded to a few ideas, which newspapers can use to innovate their online presence.  He jokingly stated that for $25million he’d be happy to dispense his knowledge to the newspaper industry, but not for less.  I work for much less.

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Newspaper Revenue Model Severely Jeopardized – Current Economy Reveals Massive Flaws

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Last week Sequoia Capital, the venture capital firm that funded Apple, Oracle, Cisco and Google, among others held a meeting and made a presentation to its portfolio companies about how to try to survive an economic downturn.  The attached presentation is quite in-depth and technical however it does a good job of highlighting the implications on future spending habits.

The implications from the presentation for newspaper publishers are troublesome.  We already know the print advertising model has been rapidly failing since the second quarter of 2006.  Now, the increased exposure and reliance of newspapers on internet advertising and internet advertising growth can become a deadly problem.

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APT, Yahoo’s New Digital Ad Platform – Good for Newspapers?

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I would say that most newspapers around the world are not suffering because they lost out on worldwide advertising. Newspapers have lost touch with the communities they used to serve so well.  If anything, Newspapers need to be developing their own LOCAL advertising platform.  I often see new 3rd party applications being utilized by newspapers for a share of their revenue stream and I wonder what the long-term implications are to the owners’ equity.

Yahoo also hopes the new platform will help the ailing newspaper industry, by transforming poorly performing remnant advertising into higher performing revenue streams. “We touch more users around the world than any publisher could dream to do,” says John Slade, Yahoo’s Vice President of Product Management. Continue reading →

Newspaper Retail Stores Strengthen Their Brand in Airports

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Media companies have been opening retail stores in airports since 2002 when CNBC opened a store in Kansas City, MO.  But Newspapers have been slow to utilize this marketing opportunity.  The New York Times opened a their first “airport” store in 2005 and currently owns two.  USA Today just opened their first Airport retail store on Wednesday September 17, 2008.  The store, actually 3 stores, will be located in Detroit Metropolitan Airport and are managed by HDS Retail North America.   They plan to open 3 more in another airport by years end.

Why open a retail store in an airport?  Why not?  A quick check of some stats shows Dulles airport having 24.7 million passengers in 2007 and BWI airport having 21.4 million from the last 12 months. 

“We look for unique opportunities to expand the brand and expand our awareness and also reap some additional revenue,” said John Malkin, Fox’s vice president for affiliate marketing. AP News

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Thanks Old White Guy! (not McCain)

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Microsoft CEO Steve Ballmer predicts that printed newspapers and magazines will not exist in the year 2018. Yeah and it just so happens that he works for a software company. Prescient! Nothing is all things to all people Mr. Ballmer.

Watch this video entitled, Ballmer on The Future of Advertising. Beginning at 29 seconds he specifically states, “there will be no media consumption in ten years that is not delivered over an IP network, there will be no printed newspapers, no printed magazines…). 

I really hope everyone who listens to this guy understands that his prognostications are designed to keep his customers living in a state of fear. A fear of the future where only super rich multinational software corporations can lead us simpletons from the darkness that is the world wide web. What was this guy watching the Jetsons before this interview?

Somebody get this guy a copy of The World Is Flat or maybe even Groundswell. People will consume media in any format they want, on any device they want, when they want, how they want. In 2018 you will see people consuming media in more ways than you ever thought possible, NOT LESS, NOT THROUGH ONLY AN IP CONNECTION.   

The following link has WAY more analog deliverables than this guy can imagine. How oh How can I advertise? Let me count the ways.

How oh How can I advertise? Let me count the ways….

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There are so many ways to advertise, is it any wonder that newspapers are losing money? I put together the below chronology just too give my self a better idea of what is going on in the advertising world. Pretty incomplete I know, but It shows the major trends here.

  • Earliest – Word of mouth, Flyers, Hand-held signs, Calling cards, Public Relations
  • Early 1700′s Newspaper ads appear, Business cards
  • Mid 1700′s Magazine advertising appears
  • Early 1800′s Posters, Human billboards
  • Mid 1800′s Roadside billboards, Building billboards
  • Late 1800′s Yellow pages
  • Early 1900′s Radio, Coupons, Skywriting, Theatrical ads
  • Mid 1900′s Television, Telemarketing, Clothing ads, Electric signs, Corporate sponsorship
  • Late 1900′s Direct mail, Mobile billboards, Internet websites, Product placement, More corporate sponsorship, Electronic billboards, Bus wraps
  • Early 2000′s Viral marketing, Pay per click advertising, Email marketing, RSS feeds, Podcasts, Banner ads, Search engine optimization, Pop-up/under ads, Craig’sList, Angie’s List, Yelp, Yahoo locals, Google ad sense, Digital signs, Digital Billboards, Social Media

Email or comment to add anything to this list.

Belo Spins Off Newspapers as Murdoch Consolidates

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We all know by now that Rupert Murdoch plans to launch a Fox Business Channel. He will accomplish this by utilizing the content he now owns through the purchase of Dow Jones Inc.

Belo Corp. on the other hand announced on October 1st that they will be spinning off their newspaper and online news sites from their broadcast news channels. Belo claims that by separating their newspaper and TV companies that they will realize a rise in stock valuation. This is the only reason they would do such a thing. They are saying the sum of their parts is worth less than the parts themselves. Murdoch and his News Corp. see TV and newspapers as one unit however. He sees the sum of these parts as greater in value than the parts themselves.

So who is doing the right thing? One or the other? Both? Other media companies with similar holdings are now looking into their situation no doubt. An interesting bit of info on this whole thing: According to PricewaterhouseCoopers, ad revenue for newspapers is expected to shrink this year 1.5% and cable TV will increase slightly to 4.9%.

It is this author’s opinion that pure play newspaper publishing companies will continue to see their value shrink as advertisers migrate to new media and stock holders demands for profit move newspapers to lose focus.  The best thing to be right now if you are publishing a newspaper is privately owned and independently wealthy.  Investors seeking exposure to advertising money need to look at internet heavy publishing companies.  The growth rate for internet advertising is 35% over year 2005 spending to 16.9 billion dollars American.  This crushes anything else for advertising growth.

NY Times Audio Slide Show Captures Pride

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I’ve been away getting married and enjoying my honeymoon, I apologize to all of you who rely on Metaprinter for your daily Newspaper industry updates.

The last time I wrote Anne MacDonald was getting confrontational with the newspapers. Well it seems they had the last laugh, as she was fired from Macy’s quickly after making her “shape up” comments. Macy’s new CMO will be increasing ad spending and coupon printing. I bet those coupons will be printed or inserted into many newspapers.

Printing and Newsroom History:
For those interested in some newspaper printing history check out the article entitled, “Copy” and this New York Times three and a half minute audio slide show. The narrator does not mention it in the slide show, but the new building does not house NYT printing operations. Their flagship printing facility is now College Point Queens, New York. I just wanted to clarify, because the article states it and the slide show does not.

The thing which struck me when viewing the slide show was the look on the faces of those men and women in the photographs. It is pride. Pride in workmanship, pride in their contribution to the final product. These people worked hard, and although they may have grumbled or groused about the conditions or deadlines, I doubt for an instant any one of them would have traded it in for some other profession. I think that look is lacking in today’s pressrooms and newsrooms and I do not know if it will ever return. How do we get it back? We must get it back! It is an important feeling which no one can wrench from one’s grip, the way faith cannot be questioned and the way hope never lacks to motivate. Pride is freedom. It is the swagger in one’s step, and the confidence required to be successful. Pride allows the individual to contribute more that they ever thought they could. Pride let’s you do good work for the work’s sake, because it just feels so good and not because you were told to do so. I long to see that look again…

This is an excellent piece of reporting by David W. Dunlap, and I enjoyed the multimedia presentation of the story immensely.  The New York Times audio slide shows are one of the most innovative applications newspapers have created.