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Upgrading the Newspaper Revenue Model
When Steven Colbert recently suggested that newspapers should just add porn sections if they were serious about competing online, it was funny and sad at the same time. Newspapers serve an important part in any healthy democracy. But if they’re going to survive, they need to address a two-fold dilemma: falling subscriptions and declining ad-revenues.
Of course, as more and more content inevitably moves online, newspapers should be focusing on increasing online ad revenues and online subscriptions. To do that, they have to increase both traffic, i.e. the number of unique visits and page views. By following the example of where the more successful web portals are now and where some of the more popular emerging portals are headed, they just might be able to that.
In a word, newspapers should be considering how to use social media and mobile technology to hyper-target both ads and content. In doing so, they’ll be able to open up their ad space to both advertisers from around the world/web, and mom & pop business that could never before afford newspaper ad space.
Localized Ads
Newspaper know more about their paying subscribers than just their IP. They have a billing address. Between the two, then, they can show ads for businesses in specific neighborhood.
This, in turn, means they can open up a variety of specialty ad rates that will make it affordable for mom & pop businesses to advertise “in the paper.” Since newspapers know exactly how many people in any given neighborhood subscribe to the paper and what content they interact with the most, they can target the audience accordingly.
A Social News Organization
Newspapers need to consider building community around their subscribers for two reasons: (1) traffic/page views, and (2) user-data — which we’ll get into below. This means integrating the usual suite of social media features such as user profiles, comments, sharing features, and leveraging APIs.
First, letting users interact through profiles and comments can help page views go up. Secondly, allowing readers to easily share content with their personal network by leveraging APIs, such as Twitter and Facebook, should also help increase engagement. Most importantly, however, will be the user data amassed through subscribers’ profiles.
Hyper-Targeted Affiliate Offers
In addition to the profile information that users would provide, newspapers will amass extensive data on its users, including content preferences and online behavior patterns. In conjunction with the data they have on subscribers’ locality and its average demographic, such information would be invaluable in identifying the specific kinds of product offers of interest to their readers.
Imagine if newspapers used this data to leveraged the eBay and Amazon APIs to show users offers they were actually interested in. Users would respond well to the ads, and instead of relying online on impressions, newspapers could monetize and CTRs and even conversions — as any other content-driven super-affiliate does.
Going Mobile
Former Financial Times journalist, Tom Foremski, recently pointed out that papers are already thinking in terms of “mobile journalists equipped with notebooks, cell phone modems, and cameras,” so the next step is to think in terms of mobile subscribers — not mobile readers, but mobile subscribers.
The first step would be sending readers mobile alerts on topics they want. Not only would this increase engagement and offer more value on subscription fees, this would also boost impressions. As mobile readers click through on an SMS to view the story, papers further increase page views, and therefore impressions.
And to build on localized ads, newspapers could leverage location based services (LBS) technology to show mobile subscribers ads that are relevant to their current location. For example, a mom & pop restaurant could reach out to a mobile user who is not from that neighborhood, but happens to be in it.
A Watchdog Business
Newspapers are in the business of (1) providing authoritative information so that they can (2) sell subscriptions and ads. But they are also much more than mere content publishers. They play an important role in a healthy democracy. There is a lot more hinging on their survival, then, than mere jobs and tradition.
Web technologies can help them better distribute their content, so they simply need to adapt their subscription and ad models to these new channels. Granted, the development of that kind of platform would be not be a simple feat; but whoever managed to pull it off well would be in a position not only to make considerable profits, but save a dying but important industry and democratic institution.
newspapers a “democratic institution”?
thanks for the laugh this morning!
[...] Auto Blog added an interesting post today on Upgrading the Newspaper Revenue ModelHere’s a small reading…can help them better distribute their content, so they simply need to adapt their subscription and ad models to these new channels. [...]
[...] and ads, and online technologies can only help them do that . In a recent Revenews post, Upgrading the Newspaper Revenue Model, I explored some ways that newspapers could (1) make paid subscriptions more appeal, and bolster [...]
@Pat Grady,
All I was getting at is that they’re an integral part of the democratic process. They may be flawed, but we need them if only to criticize them…
Interesting read. Glad you posted it.
CT, their role used to be important, today, it’s minimally so and alternatives that are more compelling and effective, exist and are thriving. In my town for example, the newspaper is largely printing stories exactly as they appeared online the day before, often 2 days before. Journalism and newspapers are two separate things today! Newspapers today are one of a competing number of delivery mechanisms of information. To boot, their mechanism is a slow, costly, environmentally unfriendly, inefficient, duplicative version of available alternatives. Further, the political bias and one sideness of most newspapers today is completely transparent and laughable.
An anology…
People lamented the demise of the horse drawn carriage and predicted all sorts of losses to humanity when replaced with better serving modes of transportation. Transportation is the thing people valued, and therefore what was rewarded. The particular mode of its present or past existence is not what is valued.
Journalism, the part that does indeed contribute to our democratic process, is more alive than ever. So please, don’t you or anyone else, expect forward thinking people to get melancholy over true progress, just because something of lesser value is left behind.
@Pat Grady,
You have a definite point about their business model, as well as the difference between newspapers and journalism.
What I’m concerned about is the plight of local papers. While NYC and LA might always have viable online alternatives to a local paper, many communities (including many cities) won’t. That can leave a huge deficit in terms of local coverage of politics and community issues.
As for the newspaper business model, as I mention in the post, newspapers are primarily in the business of providing authoritative information. What I meant by that is that they have to get away from their current distribution model.
In fact, Eric Schmidt of Google recently gave a speech encouraging newspapers to start thinking outside the printing press and focus more on content delivery in general: http://www.latimes.com/business/la-fi-schmidt8-2009apr08,0,1870592.story
As for editorial biases, I don’t think that they’re that problematic. They’ve always been there, and many of the alternatives, such as blog, are just as bias. As Hunter Thompson once said:
I think what’s important is that media outlets are transparent about their bias. Why I think we need them, though, is because of how deep they can dig into a story. Sure, you don’t get the same variety you would with other publications, but you can</i get some depth. The publications that strive to do this are probably more likely to survive.
There are no journalism graduates in any Liberal Arts College who aren’t totally brainwashed Liberal Socialists. So it isn’t only the newspaper biased content providers seeing their fish wrapper business collapsing, but also other biased media outlets like Air America and MSNBC or CNN getting axed by the informed public. Advertisers want venues where 100% of the buying public get exposure to their products and services for the same Ad spend.
You can sell USA Flags and get a positive ROI at Fox News … but not at the Huffington Post or the LA or NY Times.
[...] Upgrading the Newspaper Revenue Model (revenews.com) [...]
[...] about how advertisers can target their readers and start thinking about how they can use their readers to target advertisers. Maybe they need to start thinking about a kind of third dimensional [...]
[...] rather than mere “papers” (as Tom suggests), and will make it all that more viable to reinvent their revenue model for an increasingly mobile and personalized [...]
[...] Upgrading the Newspaper Revenue Model (revenews.com) [...]
[...] their audience with offers that their audience actually cares about. It’s kind of like using readers to target advertisers, rather than letting advertisers snipe their audiences. Instead of advertisers choosing what [...]
[...] with your editorial to develop symbiotic content, (4) scout appropriate advertisers, and (5) diversify your ad-revenue stream so that you’re not relying on a single, limited model that might coax you into compromising [...]
[...] recently, not only has it started thinking of its readers as users, but it’s implemented a diversified ad-revenue model to go with it. As Adage reports: [...] Derek Gottfrid, senior software architect and product [...]
[...] can (5) help mine that user database, and then (6) use your users to target advertisers and (7) diversify their ad offerings accordingly and (7) subsequently collaborate with editorial to develop symbiotic content [...]
[...] internal marketing agencies (like Vice Magazine has) that can (2) start mining user data, (3) diversify ad offerings accordingly, and then (4) collaborate with editorial to develop symbiotic content [...]