This is the third section of the Blueprint for the Complete Community Connection.
Revenue generation traditionally isn’t a journalist’s job, but helping develop a business model for the future of journalism is every journalist’s job today. The job cuts throughout our industry (including here) have done too much damage to journalism to cling to our long-nurtured disdain for the economic facts of life. Journalists can protect our integrity and still collaborate in developing a new business model.
Content and revenue must be planned together, so any innovation plan must address both needs. While I know big parts of the solutions here will and should come from colleagues in other departments, revenue generation must be part of the vision and I discuss it extensively throughout this blueprint.
The Newspaper Next 2.0 report released last year cited the importance of developing the potential of email, video and search advertising opportunities for businesses and of assigning specialists to the distinct challenge of selling digital advertising. I affirm that approach and will mention aspects of it frequently here but will not develop it in depth because that report already detailed those points extensively and effectively.
I will cite specific examples as I explain details of this blueprint, but those examples are only a start of the model I envision for C3 to move toward results-based performance of jobs for businesses, including conducting transactions for business customers. We need to connect the business with the customer and collect the money, taking a reasonable cut for ourselves.
- Gift registries for weddings, anniversaries, graduations, babies, retirements and holidays are important opportunities.
- Obituaries offer chances to send flowers and contribute to memorial funds.
- Our products and content relating to the arts and entertainment must include opportunities to buy tickets to movies, concerts and other events online or to buy books or download songs.
- Sports sites will offer chances to buy tickets, clothing, memorabilia, etc.
- The calendar will offer registration for events and classes, ticket sales and so on.
- Dining content will include opportunities to make reservations or buy gift certificates.
- For Hawkeye sporting events, community festivals and University of Iowa events such as graduation and orientation, we will offer chances to make reservations online for lodging, meals and entertainment.
- Our iGuide business directory needs to include options for coupons, gift certificates, direct purchases, making reservations, placing orders, requesting information.
- When we use traditional ads priced by how many thousand people see them, we should seek to include options to click to download a coupon, buy a gift certificate or order a product, delivering more value for the business and a bigger pay-for-performance cut for us.
E-Me Ventures or other vendors may be able to develop these solutions for us or we may need partnerships with PayPal, Ticketmaster, Amazon, iTunes and so on, probably a combination. But somehow we need to become a sales channel, not just an advertising vehicle.
With online advertising rates low and print advertising revenue declining precipitously and local broadcast revenue also in decline, newspapers need to broaden our vision of serving business customers and move swiftly into direct sales and other business services such as lead-generation and email marketing. This may be a phased process, where we start with lead generation, coupons, inquiries and links to business web sites as we work out the technology challenges of interfacing with the inventory and ordering software of other companies or find a vendor who has already figured that out. Of course, as we work those challenges out, we will have tremendous economic opportunities in selling our solutions throughout the industry.
Our approach will offer businesses a chance to pay based on performance, which gives them higher confidence as well as higher value. More important, it turns our company from an expense line in its customers’ budgets to a revenue line. The current advertising decision is a choice of making a commitment up front to a substantial investment based on the hope of generating significant business. In this recession and in the economic vise of a community recovering from disaster, we are seeing that when businesses are cutting expenses, advertising is a large expense without an obvious dollar-for-dollar connection to revenue. It becomes an inviting place to cut. But advertising works, so the business that cuts advertising sees its revenue decline (but may not recognize the decline’s relationship to the decision to cut advertising, since the economy is such a handy scapegoat). So the business needs to cut expenses again and there is that advertising expense line — a bit smaller than last time but still inviting.
We can’t afford to be in that cycle in these times, especially with cheaper advertising options as plentiful as they are now. On the other hand, if our payment is a cut of revenue generated for a business, the business is happy to pay it. In fact, since we are collecting the money for the business, it doesn’t even write us a check. We become like payroll taxes to the individual, a huge expense that you don’t really feel because you never had the money in your hand. We send the customer money after taking a cut. So when the business needs more money, it starts thinking about how to do more business with us, so we will send more money.
Of course, traditional advertising will still do important jobs for some of our business customers, so we hope to be both an expense line and a revenue line for many businesses. In these cases, the cut in advertising expense in difficult times may actually be a shift into our pay-for-performance products.