Alan Mutter documents the no-longer-surprising fact that newspaper advertising revenues continued to fall for the 20th straight quarter in the first three months of 2011.
This decline comes at a time when the economy has been growing for nearly two years, turning around declines in broadcast, magazine and online advertising. Mutter closes: “Clearly, newspapers need new ideas. They need to develop a broad array of targeted content and advertising solutions to serve diverse audiences across the web, mobile and social media.”
Actually, newspapers don’t need new ideas. They need to unshackle themselves from their old advertising-and-circulation model and start serious pursuit of the dozens of ideas already presented for developing new revenue sources. Here are some ideas (not all mine and not new here, but not yet in wide use, at least by newspaper companies):
Develop the must-have driving app for your community. I first outlined this idea two years ago in my Blueprint for the Complete Community Connection. I am not aware that any news organization (or anyone else) has tried it yet. Mutter notes that the newspaper ad decline has been most severe in automobile advertising, falling from $5 billion in 2004 to $1.1 billion last year. Auto manufacturers and dealers have built better tools than the newspaper want ads section for selling cars.
Buying a car is a job most people need help with only every few years. It was an easy job to disrupt. But driving is a task many of us do daily, and it presents abundant opportunity. Community news organizations are well-positioned to offer one place where drivers can compare gas prices, buy insurance, find parking spaces, check the traffic, get emergency service, schedule maintenance, rent a car and download coupons for tires and service. And if you develop that app that drivers can use daily, it may also be the best vehicle for advertising auto sales.
Offer commissioned life stories instead of formulaic obituaries. I proposed this last summer and I am not aware of anyone who is trying it. You start with obituaries, but this model can expand to life stories about the living, occasioned by weddings, anniversaries, retirements or huge egos. I have fleshed out the idea into a business plan, but have not published it yet. Anyone who’s interested can email me: stephenbuttry (at) gmail.com.
Daily deals. Newspapers are belatedly getting into the daily deal game. This is a classic case of an opportunity missed because of newspapers’ relentless focus on declining forms of revenue. It will be interesting to see how newspapers’ efforts work here. Groupon and Living Social are far ahead in developing this opportunity, though I think we are early in the history of daily deals.
(Note that I don’t generally refer in this post to newspapers. Media organizations seeking a prosperous future need to stop thinking of themselves as newspapers and start thinking of themselves as digital-first media companies reaching consumers and serving businesses through a variety of tools. I used “newspapers” in the paragraph above because the failure to explore new models such as daily deals is an example of where the limited newspaper vision is holding companies back from pursuit of digital opportunities.)
Direct transactions. This will be more challenging than daily deals, because it will require developing ways to fulfill orders and interface with business customers’ inventory systems. But I believe community businesses are more interested over the long haul in selling their merchandise and services regularly than in the huge discounts and brief spikes involved in daily deals. The rewards here will be worth the time and money it will take to meet the challenges.
Newspaper executives (using the N-word deliberately again here) like to talk about the difficulty of shifting from the dollars they used to get in print advertising for the dimes they can charge for online ads. While I like John Paton’s answer (“start stacking the dimes”), I think we should pursue the possibilities of stacking digital dollars (sometimes hundred-dollar bills) through direct transactions. Sawbuck and MediaOne are plays by media companies to trade in the declining revenue stream of real estate advertising for an actual piece of real estate transactions by becoming a licensed real estate broker.
Quality Consignment, the Ogden Standard-Examiner’s thrift shop is another example of how newspapers can trade up, exchanging the dimes of traditional classified ads for second-hand appliances for the dollars of selling the merchandise directly. If you don’t want to get in the consignment business, maybe you trade up by partnering with a local consignment shop that probably does little, if any, advertising anyway.
As I noted in the C3 sections on weddings, births, retirements and graduations, gift registries can become potent channels for direct transactions (not to mention reservations for celebration venues and lodging for out-of-town guests).
Local search. Some news organizations are making headway here. But every community news organization should offer a directory that offers businesses without websites (amazingly, still a lot of businesses) a de facto website with a multi-faceted entry in your directory, offering photos, videos, coupons, menus, maps, user reviews, reservations, direct-sales and archival content about the business. Even for many businesses with websites, this can offer a better place to showcase their products and services, and a place that will show up higher in search results. That’s the key to mastering local search. Don’t think of it as taking on Google, though you will develop a place where some people will turn first when they are searching for local answers and businesses. But if you do it right, your listings will also show up high when people search in Google or other search engines.
I outlined these possibilities in the C3 Blueprint as well as in my 2008 Newspaper Next report on interactive databases: Be the Answer. While many news organizations are offering community business databases, I have not seen one as robust as I believe they can be.
Calendars. Again from C3, I think newspapers have been woefully slow to develop the digital possibilities of calendar information that they have always gathered (I counted 11 calendars once in a weekly newspaper). Calendars can be standalone websites or a dynamic part of your news site. They should offer direct transactions: buy tickets for a concert, movie or athletic event or register for a class. Multiple vendors offer calendar possibilities. Or you can develop your own, as The Oklahoman did with Wimgo, the best calendar I’ve seen with newspaper roots (it’s expanded nationally from its Oklahoma City start).
Social media. Community news organizations can help local merchants develop social connections in the community. News websites using ads (check out the possibilities offered by NowSpots) that feature social media content can offer more meaningful ads to businesses — timely, easily updated ads that build a business customer’s social media connections.
Blog networks. One of my biggest disappointments in the TBD experience is that we did not pursue the full possibilities of selling ads (and coupons, deals, direct transactions and other commercial possibilities) through a network of local blogs and sites. Someone is going to demonstrate the rewards in such a network.
Mobile applications. As I’ve noted before, newspapers have a long history of helping businesses make ads. The smallest newspapers I worked for routinely made up “spec” ads for local merchants who were better at baking bread or selling tires than they were at making ads. A news organization today needs a strong mobile app. Once you have developed that ability (whether the ability is on your staff or with a contractor or a vendor such as Verve Wireless), you have a valuable service you can offer to businesses, helping them develop and market their own mobile apps.
Mobile apps and websites offer other possibilities for media companies. Can you partner with local businesses and individuals who develop apps, selling ads on their apps and helping them promote the apps? Can you help provide members of your local blog network with apps or better mobile sites and sell ads and coupons on their apps and sites?
Location. I think location-based ads, coupons and transactions present tremendous opportunities. Community news companies may be in the best position to develop those possibilities. Or they may watch someone else beat them to another revenue stream.
Data. Dan Conover does an excellent job of describing the possibilities of finding revenue streams from structuring our content better as data through the use of a semantic content management system (no, it’s not developed yet; you could hire Dan and develop another revenue stream by selling your SCMS to other media companies).
Memberships. Steve Outing is exploring the potential of membership models for news organizations.
Community funding. I love the Spot.us model of seeking community funding for specific stories pitched by freelancers. Could a news organization apply that approach to funding of entire beats that are not attractive to advertisers but are essential to the community? If you’ve cut back on your sports staff, perhaps you could use community funding to restore coverage of particular teams.
Direct content sales. I am not opposed to news organizations selling their content. I just think it’s futile to demand pay for digital news content. But if you produce quality content, some people will want to buy that content in high-value forms. Most newspapers get a small but steady revenue stream from the sales of photographs their staff shoots at high school sports contests and other community events. But they typically publish only a small minority of images that staff photographers shoot. What if you posted all (or nearly all) of your unedited photos (and raw video), along with do-it-yourself tools parents (and others) could use to order prints, posters, DVDs, t-shirts and other merchandise?
Newspapers are pretty good at producing and marketing books and t-shirts relating to big news events (when I was at the Cedar Rapids Gazette, we produced a book about the 2008 flood and t-shirts of our front page the morning after the 2008 election). But we can do a better job of offering individual or small lots of t-shirts, books, DVDs and the like. Texts from Last Night offers the opportunity to order a t-shirt of any of the funny texts it publishes. Newspapers could offer custom t-shirts of any front page, story, headline or quote, from either the newspaper or the website. They could offer limited-edition books or DVDs with coverage of a local high school team’s sports season. You could set a price and a minimum order number and not produce the book unless it will make money.
Archives. I suspect the small fees that most newspapers collect by charging for access to their archives could be exceeded by opening (and promoting) archives, with advertising by targeted topics and keywords and DIY tools for people to create booklets, DVDs, posters, t-shirts and other merchandise showing your archives.