So it looks like this will be an annual thing. Every year around this time I will repeat my counter-intuitive statement that newspapers are making a tremendous mistake when they talk about dropping print and going online-only. Here’s last year’s rant.
Why this time of year? Because of what’s been arriving in your mailbox lately. Catalogs. Literally tons of expensive-to-produce, expensive-to-deliver catalogs. The idiots in the mail-order industry haven’t figured out that they could save all that money and put those things online!
But of course they’re not idiots. They spend millions of dollars on printing and delivery and millions on slick websites. Why? Because you, Mr. or Ms. Consumer, don’t have the time or interest to go fire up your “browser” (how much browsing have you done lately?) and buy their stuff.
They know you’ll buy their stuff if you happen to flip through their catalog on the way from the mailbox, see something you can’t live without, and THEN you’ll head to the browser. They know this because they pay attention to customer behavior.
Which is what newspapers don’t do very much: Pay attention. To customer behavior.
If they did, they’d discover that their advertisers care — a lot — about:
- The subscriber who sees their ad at home flipped open on the coffee table.
- The passerby who sees their ad on the lunch counter
- The subway rider who sees their ad on the folded-over paper being read by a straphanger.
- The patient in the waiting room who happens to pick up the paper.
The challenge for the printed newspaper is simple: be compelling enough for some people to want it delivered to their home, and for others to at least make the effort to pick it up and flip through it. This isn’t about a broken business model, it’s about a broken mechanism for understanding customers’ needs.
Advertisers, like catalog companies, will pay a lot of money to get their message in front of your busy eyeballs when you’re probably thinking about something else.
Newspapers, like catalog companies, are in a terrific position to create publications that work great in print, and entirely different products that work great online.
The problem is that for years newspapers treated online like another print product, and now they’re thinking about treating their print product like it’s an unnecessary expense. (Alan Mutter’s Newsosaur blog takes a shot at the economics of that argument. For more comments, see Lost Remote’s take)
Newsrooms must take the lead on this. Newspaper newsrooms haven’t focused nearly enough energy on discovering what local consumers want in a print product, and what local consumers want in an online product.
If newsrooms want journalism to survive, they must accept full responsibility for understanding these needs and being accountable for attracting audiences advertisers want.
If newsrooms can create must-pick-up print products, they’ll be able to maintain and justify the premium pricing that newspaper print ads command. If they can create compelling online products, they’ll attract the breadth and depth and scale of audience that will allow multiple tiers of revenue from low-cost to premium.
But first, they must accept full responsibility for giving people more of what they want and less of what newsrooms think they need.
UPDATE: The Christian Science Monitor announced yesterday it’s dropping print, but that’s a very unusual newspaper. And it has few, if any, of the local advertising dynamics outlined here.
(I’ve also posted this on the AIM Group’s new site, where I’m also blogging. I’ll be cross-posting some items as appropriate, and will note when that’s the case.)
Gatehouse Media has a fascinating experiment going on in Batavia, N.Y., to see what an online-only local news service might look like.
So far it looks like a blog, where each article is a blog entry, and people can add comments, and the whole thing is a long scrolling page. But The Batavian has a lot more going on. There are links to headlines from other local media, job postings, for-sale listings, photo galleries. There are many postings every day. There’s a two-person staff dedicated to the site, one for news and one for sports. Howard Owens, a Gatehouse exec who also is a prolific blogger (when the spam doesn’t wear him down) is acting as the site’s publisher. Philip Anselmo is news editor and Brian Hillabush is sports editor.
Gatehouse’s newspapers all have websites, and some are very advanced in both audience strategies and business strategies. This is Gatehouse’s first freestanding site, and it’s going up against the existing paper in Batavia, The Daily News.
Hillabush’s first day on the job was yesterday. He’s eager to get the community engaged in helping shape the site. “The really innovative thing we’re doing (with sports) is getting the coaches involved in writing their own blogs,” he said by phone today. “You kind of lose something when a coach calls the newspaper after a game and a reporter writes the story… I really think this is going to take off.”
The new guy knows what he’s talking about. He was a sports writer at The Daily News for eight years and in local radio in Batavia before that. He knows every coach in the area. He plans cover 3-4 games a week, writing stories and shooting photos and video. Plus recruiting those coaches.
Why jump from the daily newspaper to a startup like The Batavian? “Howard’s a big reason why I took this job,” Hillabush said.
Owens is a vocal (and controversial) proponent of just-do-it news video and community engagement. And The Batavian gives him a live testbed. Owens covered two fires with simple video cameras, one in Corfu and a fatal fire in Batavia. Heck, just today (9/11/08), he posted five news items.
“We picked Batavia because it’s a neat, vibrant town,” Owens says in his blog. “It’s close to our home office; and the daily newspaper there was doing nothing on the web.” Note: “doing nothing on the web” these days often is code for “not doing much on the web.” Here the phrase is literal. The Daily News site is more like a postcard than a brochure, and the copyright says 2003. Which will make Batavia all the more interesting to watch. Will the Daily News step up? Will The Batavian draw its audience? Or create a new audience?
For all The Batavian’s ambition, there isn’t much sense of an equally ambitious business model, no doubt a combination of the current bloggish design and the priority to build a viable audience. That could be an even tougher experiment: if there’s a new model for engaging a community’s residents, could there also be a new model for engaging its businesses?
Howard Owens posted a very appropriate told-you-so blog entry the other day — “Cheap camera video journalism going mainstream” Howard has been beating the drum on the topic of newspaper reporters shooting lots of good-enough video clips with cheap cameras — very much against the institutional tide. Sounds like the good-enough crowd is winning, and hurray for that. Experimentation and volume — and cheap failure — are the only ways to figure out what’s going to work.
Meanwhile I’ve been developing an article for the next Classified Intelligence Reports on similar work in video advertising, and I have something startling to report: there ain’t any.
There ain’t any on mainstream media sites, that is. There’s lots of interesting work being done in online video advertising. It’s just not happening where you might expect it. I was shocked at the number of sites with aggressive editorial video efforts, and no — repeat no — effort to figure out how to create a satisfying advertising environment around it. The real shockers are local TV sites, where you’ll see lots of clips from broadcast but no — repeat no — effort to deliver advertising, aside from traditional sitewide banners.
I hope I’m wrong. Maybe I just happened to troll through the sites that aren’t fully engaged in the video business. I did find a very few, and I’d be delighted to see more, so comment away.
What’s that? You’re a reporter or photographer or videographer, and you find advertising a necessry evil? Please, find another job and free up your spot for someone who cares. If you’re in the local media business, advertising pays your salary. You have to get involved in figuring out how to bring local advertisers into your site, and video could be perfect for many.
The scary thing in most local media businesses — both broadcast and print — is that the people who are just now “getting” video, thanks to people like Howard, are the farthest away from the ad side. Worse, the traditional media culture prevents them from engaging with the ad side, even if they wanted to. As a result, you’ll find some good video ad models on media sites, like walk-throughs of homes for sale — but they’re safely sequestered in pure-advertising sections like classifieds.
Here’s the challenge for the creatives in local media: create engaging “editorial” video content that also includes engaging advertising. The folks in TV and radio managed to do it a whole generation ago. Were they that much smarter than you?
At the New England Newspaper Ad Executives Association conference in Newport, RI, last week, I attended presentations by two major advertisers: General Motors Planworks and Target.
Each came at the topic in an entirely different way: GM is looking for efficiency and accountability. Target is looking for creative ways to push its hugely successful brand (Target now claims to be the most recognized brand on the planet.) I’m way oversimplifying, but point is, they couldn’t have been more different.
But some themes tied them together:
- Newspapers (heck, anyone selling local advertising) must be the experts in their local marketplace. They must continually grow and share that expertise with their customers. That’s not “added value” anymore. It’s core.
- Better get serious about audience measurement, both print and online. Because advertisers are getting serious, and they’ll come looking for refunds if numbers fall.
- Customer service is critical. Make it a priority. Treat all customers well, but don’t be afraid to treat your top customers like royalty.
- Print matters. A lot. Target was playing my song (see my blog entry about all that paper in the mailbox) about the importance of flopping a Sunday flyer onto the coffee table. I wonder if most ad execs get that. Yes, we’re all about digital, but the scarcity of attention span means that getting an offer in front of somebody’s eyeballs is going to get harder and harder. Why on earth would a publisher try to “save money” by putting that flyer online? And why isn’t home delivery much more of a priority at any cost?
Most of all, listening to advertisers has got to be job 1. Any ad exec in that audience who didn’t come away with an altered viewpoint … just wasn’t paying attention.
A few recent events reinforce a theory I’ve been noodling over for a couple of years: the new reality for anyone trying to build a business in the digital world is that the entry-level price for customers is now zero.
Media companies need to pay attention, and maybe discover some new opportunities.
Two examples from outside the media world:
- On Thursday, Adobe launched a free version of its powerful and pricey Photoshop, called Photoshop Express. According to the trade press, the Photoshop brand was at risk of becoming irrelevant to young users who have access to lots of free tools.
- Yesterday I was looking for a system for creating invoices and keeping books for my consulting business. I checked out a few systems, including QuickBooks Pro ($180) but discovered that QuickBooks Simple Start (free) is perfect for my needs right now. Thus ended my search for an accounting program. And when my needs grow, I can already see what I’ll upgrade to.
Closer to home, this week at MaineToday, we were developing pricing models for our upcoming MaineYellowPages.com directory program. Guess what: the biggest discussion was how to pump enough advertiser value into the free level. Big change from the days when we tiptoed around the idea that classified advertisers wouldn’t buy newspaper ads if we gave away something free online.
Point is: Craig didn’t invent “free” — classifieds or otherwise. The “free” train has been flying down the tracks of the Internet since ’95.
But for years, anyone with a digital-disruptable business model studiously avoided hearing the whistle. They instead focused on how to keep current customers paying, not how to attract new customers with a free entry level. Their theory was that giving away something for free devalues the paid product. (That was the paid vs free content debate. Seems so 20th Century now.) Meanwhile new entrepreneurs, with nothing to lose, got creative about exploring free.
For a local media company, the issue of free advertising is critical and isn’t going away. Local businesses are discovering all kinds of new ways to find customers, including strategies that cost them little or nothing out-of-pocket. Most of these businesses are probably not even your current customers. When they’ve become successful with their free strategies and they’re ready to pay for something more sophisticated, where will they spend that money?
The challenge is to create programs that expose local advertisers to your local audience, with a tiered value level that starts at free and moves up from there. When free is the assumed entry level, the competition is for those entry-level customers’ time, not their money. So there needs to be a good ROI for even the free advertiser’s time. The revenue challenge is to make sure there is enough value at the higher tiers so the financial ROI works for paying advertisers. And then overall, there needs to be careful management of technology, cost-of-sales and workflow to ensure the entire program returns a decent profit.
This isn’t simple, of course. But a first simple step is to change the conversation in your media company. Try this as a starter: “There are big new opportunities in free advertising. How can we take advantage of that?”