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May 23 2013

16:33

The newsonomics of value exchange and Google Surveys

whittier-daily-news-google-survey-paywall

What happens when a reader hits the paywall?

Only a small percentage slap their foreheads, say “Why didn’t I subscribe earlier?” and pay up. Most go away; some will come back next month when the meter resets. A few will then subscribe; others just go elsewhere.

So what if there were a way to capture some value from those non-subscribing paywall hitters — people who plainly have some affinity for a certain news site but aren’t willing to pay?

Welcome to the emerging world of value exchange. It’s not a new idea; value exchange has been used in the gaming world for a long time. As the Zyngas have figured out, only a small percentage of people will pay to play games. So they’ve long used interactive ads, quizzes, surveys, and more as ways to wring some revenue out of those non-payers.

It’s a variation on the an old saw that says much of life boils down to two things: money and time. It also brings to mind the classic Jack Benny radio routine, “Your Money or Your Life.” If people won’t pay for media with currency, many are willing to trade their time.

Now the idea is arriving at publishers’ doorsteps. It is being tested mainly, but not exclusively, as a paywall alternative. Yet, as we’ll see it, there may be many other innovative uses of time-based payment.

In part, this is part of the digital generational shift we might call “beyond the banner.” Static, smaller-display advertising is increasingly out of favor, with both prices and clickthrough rates moving deeper into the bargain basement. But marketers want to market, readers want to read, and viewers want to watch, so new methods that combine the marketing of brands and offers and the go-button on media consumption are au courant.

That’s where value exchange fits. Publishers are seeing double-digit, $10-$19 CPM rates from value exchange, and that’s more than many average for their online advertising. Annual revenues in the significant six figures are now flowing in to the companies that have gotten in early on the business.

The big player in publisher-oriented value exchange is Google Consumer Surveys (GCS), a year-old brainchild born out of the Google’s 20-percent-free-time-for-employees program (and first written about here at Nieman Lab). GCS now claims more than 200 publisher partners, including the L.A. Times, Bloomberg, and McClatchy properties. It says it has so far exposed some 500 million survey “prompts” to readers.

GCS will soon have more company in the value exchange game. Companies like Berlin-based SponsorPay, which offers interactive ad experiences in exchange for access mainly to games, is beginning to pursue publisher possibilities, both in Europe and the U.S, where half of its current clients are based. SponsorPay emphasizes mobile and social in its business.

L.A.-based SocialVibe, newly headed by hard-charging CEO Joe Marchese, is an ad tech company. It’s mainly oriented to non-newspaper media, especially TV companies.

How does this value exchange exactly work? Typical is the implementation at one smaller paper, the Whittier Daily News in the L.A. area., one of some 35 Digital First Media papers (both MediaNews and Journal Register brands) that have deployed GCS almost since its inception. Upon reading their 10th, and last, free metered article of the month, readers get a choice: buy a sub for 99 cents for the first month — or take a survey. “Do you own a cat?” for instance.

Publishers get a nickel for each completed response. Response rates tend to fall between 10 and 20 percent. “Completion rates” improve by targeting specific questions to specific audiences. The nickels add up.

For publishers, then, we have a new acronym: PAM, Paywall Alternative Monetization.

Consider the innovation a by-product of the paywall revolution. If you haven’t created a barrier to free access, you have less leverage to force wannabe readers to choose the lesser of two choices to proceed with their reading. Now, publishers can say, pay me for access with money — or with time. The time is short — measured in seconds or maybe minutes, depending on a video’s length or a survey’s questions.

What does the consumer get for answering a question? It varies. Respondents can get as little as a single “free” article, or an hour, or a day of access.

These programs can offer side-by-side offers. For instance, someone like a Press+ (which now powers some 380 newspaper sites) may power a subscription offer in one box, and Google Surveys or a SocialVibe can offer up an alternative in a neighboring one.

Digital First Media, long a public skeptic of paywalls, is using value exchange as an adjunct to its paywalls, many of which were deployed before DFM took over management of the MediaNews papers. While it is using it successfully as a paywall alternative, says Digital First Ventures managing director Arturo Duran, it’s also finding a couple of other ways to wring money out of surveys.

At many of its digital properties, including The Denver Post, its photo- and video-heavy Media Center hub offers Google surveys as speed bumps for continued access. Readers perceive value; enough of them are willing to pay with a few seconds of time to keep getting access to visuals. Similarly, Boston.com’s The Big Picture “news stories in photographs” uses GCS.

This approach, putting up a speed bump — in the form of a survey — instead of paywall explores the nuances of differing consumer valuation of differing parts of news sites. The Texas Tribune has offered a similar approach, having used Google surveys on its extensive data section. How often a survey is deployed can be adjusted by the publisher, working with Google, to maximize both revenue and reduce traffic lost. The search here is for the magic sweet spots.

The Christian Science Monitor is also an earlier surveys adopter. “We don’t have a paywall,” says online director David Clark Scott. “So we tried an experimental speed bump.” Those bumps were installed first on a single section, and now have grown, popping up on much of the site. One CSM twist: If you come to the site directly, you won’t see the surveys. If you come via some search, social, or other referrals, you will.

Digital First is also testing survey deployment for a group notoriously hard for the news industry to monetize: international readers. “We can’t sell [ads] in Kenya, Japan, and India,” says Duran. Instead of fetching bottom-of-the-ad-network prices, as low as 25 cents, surveys can return money in the whole dollars. One lesson so far: “It’s a much better experience than an ad,” for many readers, says Duran.

Publishers are also finding other ways to get readers to “pay.” At the Newton (Iowa) Daily News, the paywall also provides these two alternatives: answer a survey question or a share an article (via Twitter, Facebook, or Google+) in exchange for continued passage.

“It wasn’t about market research at all — it was about trading time for content,” says Paul McDonald, head of Google Consumer Surveys. McDonald, who developed the product along with engineer Brett Slatkin, says they tested out what people would most likely be willing to do, in exchange for some good. They tested a million impressions at The Huffington Post and found that question-answering was the most likable activity. Hence, Google Consumer Surveys.

“Most research is stuck in old ways — paper, email, and phone. It’s a stagnant industry, ” McDonald says. The industry, of course, has responded, offering its own critique of GCS’ rapid-fire — surveys can be commissioned and deployed within a day, with complete results, broken down by customized demographics (at an extra cost to survey buyers) within 48 hours — disruption of the market survey space. Still, industry reaction is more than mixed, with the positives of Google’s new technique winning adherents among bigger brands and smaller businesses. It’s a self-service buying technique, borrowing from Google’s flagship AdWords model.

Interestingly, Google itself is using Surveys to obtain consumer insight. Yes, the company that derives more data from our clicks than anyone still finds asking a human being a question can yield unexpected learning — which, of course, can be combined with clickstream analytics. YouTube is among the many GCS deployers.

It’s a new frontier, and one that I think offers a number of curious potentials.

  • At scale, if there is scale to the business, it’s about significant new sources of revenue.
  • As a paywall alternative, it may be a detour that leads back to the road to subscription. If a reader is engaged enough with a news brand over time — kept engaged in part through value exchange — maybe he or she will eventually subscribe. Does a value exchange-using customer have a higher likelihood of subscribing in the future? It’s too early to know, but we may have soon have sufficient data to see.
  • Value exchange could expand the ability to gain customer data. Each time someone trades some time for reading, she or he could be asked for an additional piece of profiling information. Essentially “registered,” that new customer becomes more targetable for subscription offers or advertising.
  • We can start to widen the idea of trading time for access. Remember the idea of the “reverse paywall,” espoused by then-Washington Post managing editor Raju Narisetti and Jeff Jarvis? Spend enough time with a news product, and get rewarded, they proposed. Value exchange begins to structure that kind of relationship, providing value both to readers and publishers. Rough equalization of value would be a painful process, but it may be doable through much experimentation.
  • Let’s combine two things: the rise of mobile traffic and value exchange. Mobile may not be ad-friendly, but customers might be far more willing to watch a video or touch through a quick questionnaire on a cell phone — and that can ring a different key on the digital cash register. “Mobile is already more diversified,” says SponsorPay CEO Andreas Bodczek, explaining that it is moving beyond gaming companies for value exchange and will soon include publishers.
  • GCS is an easily deployable tool for small- and medium-sized businesses. As such, it could be an interesting add-on for publishers’ emerging marketing services businesses (“The newsonomics of selling Main Street”). That’s a line Google could allow newspaper companies to resell, just as many resell Google paid search.

July 27 2012

14:04

This Week in Review: Reddit and news orgs’ shooting coverage, and Yahoo and Twitter’s identities

The Aurora shooting, Reddit, and citizen journalism’s value: Much of this week’s news has been related to last week’s shooting at an Aurora, Colorado, movie theater that killed 12 and injured dozens. Poynter tracked the spread of the news of the late-night shooting, and the site that got the most recognition for thorough reporting of the news as it broke was the social-news site Reddit. Poynter’s Andrew Beaujon rounded up the range of coverage on Reddit, which included photos, comment threads with people who were in the theater, and comprehensive, continually updated timelines.

Those timelines drew particular attention from media observers: The Atlantic’s Megan Garber marveled at their empathy through thoroughness, and BuzzFeed’s John Herrman and NPR’s Elise Hu talked to the timelines’ author — an 18-year-old named Morgan Jones — with Herrman calling him “the go-to source in the story,” and Poynter’s Alan Stamm held him up as a model for aspiring journalists.

As The New York Times described, the site’s users also unearthed some details about the alleged shooter that the traditional news media missed. Adweek talked about Reddit’s reporting capabilities with the site’s general manager, Erik Martin, who said Reddit wasn’t designed to be a breaking-news source, but its users have used its tools for journalistic purposes anyway.

Several writers praised Reddit’s ability to cover breaking news collaboratively in such an effective way. Keith Wagstaff of Time wrote that “no news organization or social media site currently offers an experience that’s concurrently as immediate, engaging and thorough as the one offered by Reddit,” and in a pair of posts, GigaOM’s Mathew Ingram remarked on Reddit’s ability to act as a verification hub and to allow readers to interact with people involved in news stories, and offered a defense of “citizen journalism” such as Reddit’s.

At Salon, Michael Barthel took issue with the praise for Reddit and citizen journalism, arguing that it isn’t immune from the same criticism the traditional media and that it’s “doing more or less the exact same thing that traditional journalism has always done, except not as reliably or sustainably.” J-prof Jay Rosen countered the piece with a Salon post of his own arguing that no one is saying citizen journalism will replace professional journalism.

Some traditional media organizations were also recognized for their skill in covering the story — the Denver Post’s Twitter coverage was run in part by its Digital First new curation team, and Digital First’s Steve Buttry drew tips for news organizations from the Post’s Twitter coverage, while Poynter looked at how the Post covered the news without a copy desk. The Washington Post’s Erik Wemple also highlighted the coverage of Denver’s 9News TV.

How to cover tragedy carefully and sensibly: But traditional news organizations were also responsible for some serious missteps and some eyeroll-inducing coverage of the Aurora shooting, too. ABC News’ Brian Ross misidentified the shooter as a Tea Party member who had the same name, a mistake which Poynter’s Craig Silverman said the network made insufficient efforts to correct and apologize for.

Rem Rieder of the American Journalism Review and Steve Myers of Poynter pinned the blame for Ross’ and similar errors on the practice of incremental or “process” reporting, in which news is reported, bit by bit, as it comes in, then later confirmed or corrected. Rieder said he doesn’t find the practice “a very confidence-inducing or satisfying approach to journalism,” and Myers described how disclaimers and corrections can be separated from initial reports on Twitter.

Beyond that specific error, coverage of the event and its aftermath followed a predictable path of sensational coverage and unfounded speculation. The New York Times’ David Carr lamented that pattern in shooting coverage, concluding that many of the problems stem from the news media’s desire to answer the question that can’t be answered: “Why?”

The Atlantic’s J.J. Gould urged media outlets and consumers to start shaming organizations that cover such events exploitatively, and numerous people circulated a 2009 video by the BBC’s Charlie Brooker that illustrated how to (and how not to) cover a mass shooting properly, which New Statesman compared to Britain’s newspapers. Jay Rosen, meanwhile, criticized the excitement that characterized so much of the coverage.

The ethics of quote approval and draft sharing: Following last week’s New York Times story on news organizations allowing candidates and their staffs to approve their quotes, more news orgs were establishing or reiterating their policies barring those practices this week, including Bloomberg, McClatchy, and National Journal. The Washington Post’s Erik Wemple parsed through a few common quoting and negotiation practices, and the Journal’s Ron Fournier told him the key element differentiating what’s OK from what’s not is who has control.

Meanwhile, a Washington Post journalist caught some flak after the Texas Observer reported that he shared drafts of a story with University of Texas officials and allowed them to suggest edits that ended up in the story. Post editor Marcus Brauchli ultimately decreed that future draft-sharing would have to be approved by an editor.

In the ensuing discussion on draft sharing, the reporter had some defenders, including Poynter ethicist Kelly McBride in the Observer story. Poynter’s Andrew Beaujon noted that the story contained quite a bit information that was unfavorable to the university, while the Post’s Erik Wemple defended the practice of draft sharing in general, saying that a refusal to do so affirms journalists’ arrogance. “It’s a convention built on the idea that journalists are so brilliant that they can get a complicated set of facts and circumstances dead-bang right on the first try without feedback from the people who know the topic best.”

What exactly is Yahoo?: A week after ex-Googler Marissa Mayer took over as Yahoo CEO, she’s begun to inspire confidence in the troops there, according to All Things D’s Kara Swisher, while Wired’s Steven Levy reported on the army of ex-Google managers Mayer could lure to Yahoo. The New York Times’ David Carr said the key question for Yahoo — as it has been for so many web companies before it — is, what is it, exactly? He concluded that Yahoo is (among other things) in the news business, but by accident more than anything.

Tim Carmody of The Verge said that question — especially whether it’s a media or tech company — could be shaped in part by where it moves most of its operations. He reported that Mayer may move many of Yahoo’s media execs to New York, making it a place where it could pursue both its media and tech sides. Ad Age’s Jason Del Rey and Michael Learmonth said Yahoo’s future is in creating more high-quality products, an area in which it hasn’t spent much money recently.

Twitter moves further toward media: We were also asking the “What is it?” question this week about another company: Twitter. The Wall Street Journal reported (paywalled) on Twitter’s plans to build out around big events, as Twitter announced the first of those partnerships — a hub for curating conversation about the Olympics with NBCUniversal. Meanwhile, Adweek reported that Twitter is in talks with Hollywood producers about launching original web shows a la “The Real World.”

In a series of posts, GigaOM’s Mathew Ingram wrote about Twitter’s move toward being a media outlet, saying that it doesn’t really need media outlets such as NBCUniversal to coordinate event-based coverage, that Twitter is moving toward an Apple- or Facebook-esque “walled garden” approach with regard to developers, and that producing ad-driven content like web shows gets away from Twitter’s core aims.

Meanwhile, The New York Times’ Nick Bilton asked whether Twitter is a media or tech company, concluding that it looks an awful lot like a media company. NYU j-prof Jay Rosen posed that Twitter is “a new kind of media company that doesn’t make any content.” Slate’s Matt Yglesias said the media/tech distinction isn’t a good one — the real distinction is between companies that sell a product and ones that sell an audience, and Twitter is quite clearly the latter.

Reading roundup: Here are the most interesting smaller stories going on this week:

— A couple of updates on the ongoing News Corp. saga: Rupert Murdoch resigned from the board of News International, his British newspaper division, and Howard Kurtz of The Daily Beast explained why Murdoch is loosening his grip on his newspapers. Meanwhile, former News International head Rebekah Brooks was charged in the phone hacking scandal, and the Telegraph wondered if the charges could lead to a deeper U.S. investigation. The New York Times wrote about the case’s impact on British newspaper culture.

— A few WikiLeaks developments: A judge ruled that the diplomatic cables released by WikiLeaks are still secret, and the Electronic Frontier Foundation noted that U.S. government officials are now talking about the possibility of prosecuting news organizations like The New York Times in addition to WikiLeaks for publishing classified information. GigaOM’s Mathew Ingram urged journalists to support WikiLeaks’ First Amendment rights, and the Times’ Bill Keller followed suit.

— Barry Diller, whose IAC now owns most of the Newsweek/Daily Beast partnership, said in an earnings call that he might eliminate part or all of Newsweek’s print edition as soon as the end of this year. Newsweek editor Tina Brown tried to calm her staff down, and the New York Observer’s Foster Kamer detailed the now-ended Sidney Harman era at the magazine.

— The New York Times Co. released its second-quarter figures this week and posted a loss, thanks to declining digital ad sales, even as digital subscriptions for the Times and its Boston Globe are up. As New York magazine’s Joe Coscarelli put up, the Times is beginning to be supported by its readers more than its advertisers.

— Finally, a very thoughtful piece here at the Lab from Jonathan Stray, who suggested three principles by which to design personalized news experiences: interest, effects, and agency.

Photos of Aurora theater by Algr, quotation mark by Quinn Dombrowski, and Yahoo ice sculpture by Randy Stewart used under a Creative Commons license.

July 19 2011

14:30

Tackable, BANG collaborate on a location-based digital newspaper

Ever since he was a beat reporter at the Palo Alto Daily News and the Contra Costa Times, Luke Stangel has been thinking about how to improve finding and consuming news by adding more specific location data to news content.

Last year, he co-founded (with Ed Lucero) a company called Tackable to develop his ideas, and in February, we described here Tackable’s first product: a pair of iPhone apps that Tackable envisions as the basis for a social network that “organizes media on a map.”

Now Tackable has rolled out, in partnership with the newspapers of the Bay Area News Group, something much more complex and ambitious: an iPad app called TapIn BayArea, which Stangel describes as “the world’s first location-aware digital newspaper.” TapIn, at launch, is already an impressive, sophisticated product that shows potential to evolve in multiple ways. And its ability to engage users at various levels bodes well for its capacity to generate revenue.

The collaboration with BANG, the San-Francisco area cluster of the California Newspaper Partnership led by MediaNews Group, includes incubation space for the Tackable crew at the San Jose Mercury News. Jeff Herr, CNP’s VP/Digital, describes it as a “strategic partnership, with both partners sharing costs and both having a stake in the potential outcomes, which include expanding the product to other units of MediaNews Group and beyond.

TapIn is the first product that aims for a space envisioned by Ken Doctor here in his recent Lab post, “The Newsonomics of the Swift Street Courtyard,” in which he asked, “Imagine a world in which consumers can move their finger around a magic tablet surface, watching, listening, reading reviews and more?” TapIn may not completely fulfill Doctor’s vision, but it’s aiming to go there. After the launch, Doctor wrote on his blog: ” Potentially — and I cannot emphasize that word too much — it may become a prototypical product for the news industry, pointing a new way out of the hollowing-out landscape into which the news industry has meandered.”

Checking the reviews

During the Lab’s summer hiatus last week, a number of good descriptions of TapIn’s functionality were posted elsewhere, and rather than reinvent the wheel I’ll give you those links and move on to my impressions of where TapIn could be headed:

Not every user is going to be thrilled with the map as the basic navigational interface. The idea that men navigate with cardinal directions, while women navigate by landmarks, has scientific backing and implications for hardware and software design. Is it possible that some people (not necessarily women) will resist the map-based UI? Stangel says, “That was one of the things that came up in our focus groups. The ultimate goal is to produce a product that delights.” To that end, users can choose to access data via one of several views, with or without maps, including OnTap, a mix of the top six things that TapIn thinks you’re going to like. “We’re finding that people are clicking on OnTap a lot,” says Stangel. Right now, OnTap’s content is ranked mainly according to human editorial judgments, but eventually, the rankings will also be influenced by the crowd — frequently-shared material will bubble up — and by user customization in which users list preferences to get more personalized content. (“I want pizza but not Italian restaurants,” or “I like this sports team but not that one.”)

Down the road, Stangel has visions for upgrades ranging from version 1.1 all the way to 2.0. The ultimate goal, he says, is “a product that delights,” and the envisioned upgrades will aim for improvements in localization, personalization and customization, for all of which Stangel offers intriguing possibilities.

For example, TapIn is likely to accumulate many more optional layers of information organized on maps, which users will toggle on and off at will. In fact, Tackable plans to provide an API later this year so that third-party developers can add such layers — essentially apps within the app — catering to niche interests. Some of these layers could begin to appear in the next version, says Stangel, who paints a picture of layers focused on real estate, classifieds, sports scores, crime reports, and user interests like wine or gardening, all location-specific, all capable of generating topical conversations. (Herr also suggests fishing conditions as a map layer; and I can imagine more esoteric-interest layers like spelunking and underground urban exploration.)

To me, this potential multi-dimensional, data-rich, customizable environment is the flip side of concerns about comfort levels with the map interface. There is simply too much mappable news and information out there not to try this.

Leaving user input fuzzy

TapIn’s social layer is based on Gigs, a feature borrowed from the original Tackable phone app. Deliberately non-specific, Gigs simply allows users to place a red pin on the map and attach a post of some kind. This could be a restaurant recommendation or comment, but most intriguingly, it could be a question — “I’m here and have an hour to kill, anything cool to do nearby?” or “Does anybody know why traffic on this road is tied up?” or “What’s the story behind this interesting-looking building,” or “Can someone recommend a plumber who will come out here on a weekend?” “Post what you need and see who can deliver,” Herr says. “[We're] definitely just nibbling at the edges of a new marketplace like that.”

Indeed. I’m often struck by how quickly location-specific questions like, How do I kill 6 hours at the Denver airport are answered on Q&A sites like Ask Metafilter (and, not quite so quickly yet, on Quora). With local critical mass (how large?) the quality of such answers could be even better and faster on TapIn.

Stangel says Gigs was left “intentionally nebulous. We don’t put a lot of rules on what you ask for. You type in what you’re interested it. it could be a request for a photo. It could be simply, I saw something here and want to leave this digital beacon here to tell people about it.” The Gig pin and its associated content disappear after 24 hours — this is a pure real-time feature. People are starting to use it, and Tackable is watching to see how. “Our goal has been to create a robust community of people who live in a particular region and to give them the tools to really easily talk to one another, to ask one another questions, with the idea that they think and share local knowledge,” Stangel says.

In the course of the week since the app went public (on July 12), Stangel says downloads have been picking up exponentially, pushed along by Twitter talk, as well as by stories and promotions in the BANG papers. People are actively using the app and sharing links through it, Stangel says.

Where the money comes from

Herr spoke and emailed with me about the business side of TapIn. The principal revenue stream, of course, is expected to be advertising. “Geo-awareness just drives everything here,” he says. The tablet enables more elegant and engaging ads than prior websites, and Herr aims to use those capabilities. “We hand-selected some of the brightest advertisers in our markets because we need them to help us model out the ideal formulation.”

Clearly, additional revenue streams are possible down the road as well — for example, commissions on ticket sales generated through the app. An expansion of TapIn to the CNP’s southern California group, Los Angeles Newspaper Group (LANG), and to MediaNews’ Denver Post seems likely if the current rollout takes off with users and advertisers.

“From the start we looked for ways to engage people through game mechanics.”

One revenue stream will come from $4.99 per month user subscriptions (which kick in after a free introductory period during the summer), but a unique feature of Tapin is that active users can easily earn back the cost — and more — by earning credits for clicking on ads, sharing content or other forms of engagement. It’s an idea that might well be considered by other publications that have put up paywalls — just as electric meters can run backwards when homeowners install solar panels, engaged users could earn back their subscription fees by doing what you want them to do. (In the print world, many readers will tell you that the main reason they buy a Sunday paper is that they save more than the cost of the paper just by using some of the manufacturers’ coupons.)

Stangel says that what the team is calling the “earnout” feature came out of the CNP side of the collaboration. Every user action on a web site or app has a value — the user doesn’t know what it is; there’s no visible counter. But the site operator, the newspaper in this case, does. The team realized that “there could be a way for us to quantify the actions that people take on the app to essentially hold on to some of that value and trade it in for other things they find of value on the app,” Stangel says. Currently, they can do that at a store on the TapIn website that offers TapIn gear and merchant gift cards; eventually, this will happen within the app itself with a richer mix of offerings.

Here, too, I believe TapIn is potentially hitting a nerve and turning it to its advantage. As illustrated most recently by the Netflix pricing kerfuffle, whether it’s the slow economy or simply consumer fatique, people are reaching the limits of their willingness to spend more on digital services and content. So, especially when an app is clearly earning money from advertisers targeting me, why not give me a chance to reverse the meter by earning back my costs (and more) when I respond to the ads or engage my friends in the app?

All of this highlights the game-like aspects of TapIn. Herr points out, “From the start we looked for ways to engage people through game mechanics. We found in Tackable a perfect partner given their heritage in the gaming industry. They all worked in leading game-development shops on impressive game projects. I mean, they figured out how to coax couch potatoes up on their feet to jam on air guitars all night long!”

Soon after the introduction of the iPad, I posted here a set of iPad strategies for publishers. There is also a somewhat expanded version on my own blog. In the latter, I urged publishers to recognize that mobile will be ubiquitous; that content needed to be created and formatted specifically with the tablet’s capabilities in mind; to make everything personalized, customized and social; to forget about trying to emulate print with “issues” and “editions” on the tablet and recognize the atomization of content and the native capabilities of the new device; and to find new ways for merchants and brands to interact with consumers.

To me, TapIn hits the bulls-eye of those strategies. I’ll go a little further out on the limb than Ken Doctor’s “potentially” and say that TapIn is, in fact, the prototype (although certainly not the last word) for an innovative new class of apps and sites that can bring news publishers engagement with a brand new generation of consumers.

February 24 2011

15:30

The Newsonomics of the digital mercado

Editor’s Note: Each week, Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of news for the Lab.

It’s as old as organized humanity itself: the mercado, the bazaar, the marketplace. We love to visit Old World marketplaces as we travel abroad. At home, our own shopping is now a mish-mash of malls, big box stores, neighborhood shops, and online commerce. Amazon, itself, is now a $34 billion business, and its Prime delivery program can deliver just about anything (my favorite buy: an electric mower) right to your door, seeming so local.

We can research almost any purchase. We can compare prices. We can get advice and reviews from hordes we’ll never meet.

Yet it’s far from nirvana. Navigating the byways of web commerce, other than great walled gardens like Amazon, can be frustrating. Numerous culs-de-sac interrupt us. Price-comparison sites like Price Grabber, Google Product Search, Shopzilla, and UK’s Kelkoo only seem to give us a partial view of what’s available. It’s tough to know when reviews may be gamed. Sites like preprint-digitizer Shop Local (“Your Local Weekly Ads, All in One Place”), owned by Gannett, seems curiously backwards, like replica E-Edition newspaper products for reading. Trying to compare model numbers, on sites like CNET or Best Buy, can give us digital nervous breakdowns.

Within the infinity of shopping choice, a lot of us would like some order.

That’s what the new Find n Save product aims to provide, and for the benefit of newspaper companies. Find n Save is the latest effort from newspaper companies to reclaim what they consider to be their birthright, maybe a third generation of such marketplaces following the ShopLocals and the earlier Storerunners.

Find ‘n Save focuses us on a decade-old-plus newspaper company problem.

While the daily newspaper — with its display and classified ads, its Sunday circulars, and its Wednesday food coupon – used to be the leading local marketplace, it now is just part of the pack. One number — print ad revenue halved in 10 years to $24.8 billion in 2009 (no final tally is yet in for 2010, which was still lower in single-digit decline) in the U.S. — gives real meaning to this splintering of commerce.

Digital media, with its search-led research/price comparison abilities and, now, with the new couponing craze, has wrought havoc with the newspaper business model.  All of that digital commerce has been disruptive and disintermediating. Yet there’s been more disintermediation (of traditional publisher/merchant relationships) than remediation.

We turn to lots of digital media to research and shop, but we have few go-to places of habit, again with Amazon making the greatest inroads into our shopping lives so far.

From a customer-centric perspective, it’s never been more confusing to find good deals. Yes, they seem to come from every quarter — print circulars, the web overall, direct mail, eBay alerts, Amazon “notifications” — but they’re disordered.

A recent study by the BIA/Kelsey group puts a number on the proliferation of marketplace choice. The annual study points to consumers using an average of 7.9 different media to make buying decisions in 2010, compared to only 5.6 in 2007. Buying’s gotten more complex.

The flipside, of course, is that merchants’ own choices about how to market have gotten more complex (“The Newsonomics of  Eight Per Cent Reach“), with small- and medium-sized businesses using 4.6 media to reach customers in 2010, as compared to 3 in 2007.

So taking a look at Find n Save, let’s look at the Newsonomics of the would-be new mercado, and what it will take to make these new marketplaces bigger business for local media.

McClatchy’s newspapers are the first big clients for Find n Save, a product of Travidia, a long-time player in the print-to-digital ad conversion business. Find n Save replaces Marketplace 360, the company’s former regional marketplace product.

Two big McClatchy papers — its hometown Sacramento Bee and the Kansas City Star — launched Find n Save in November. The company’s other big sites, from the Miami Herald to its North Carolina properties (Charlotte and Raleigh) and the Fort Worth Star Telegram, should feature it by July 1, with the rest of the company’s 30 markets putting Find n Save in place by year’s end. MediaNews’ flagship Denver Post will also launch it soon.

It’s not the only new effort at a regional marketplace.

Find n Save will soon by joined by another regional commerce portal. FYI Philly will launch this spring, in the greater Philadelphia region, two of its principals tell me. It’s conceived as a commerce portal, details to come. Significantly, it’s the result of unprecedented cooperation among four newspaper competitors in that region: Philadelphia Media Network (the new parent of the Inquirer and Daily News), the Journal Register company, Gannett, and Calkins Newspapers.

For Chris Hendricks, McClatchy’s VP/interactive, the Find n Save push is about a grand goal: reclaiming retail advertising. While the destruction of print classifieds has been well chronicled, the steady decline of local retail has been less so. You can figure that retail advertising has declined about $7 billion annually since its 2001 height. Yes, online display advertising has yielded some retail revenue, but doesn’t come close to recreating the lost revenue — or the lost sense of marketplace. 

So Hendricks talks about “blowing up retail” — and reordering it with Find n Save. “People are searching more and more for local services and products,” he says. “And they’re getting more and more confused.”

Find n Save aims to bring some simplicity to that confusion. Take a look at it, and you can see it’s a work in progress. What we notice about it — very prominently — is the deal of the day. Yes, Find n Save aims to take advantage of the Groupon revolution. Some Find n Save sites are partnered with Groupon, while others offer their own deals of the day. The idea is that the deal of the day isn’t just a new ad play, a new revenue source, for news sites; it’s also a new gateway to local commerce. The rest of Find n Save shows its ambitions:

  • It gives prominence to other local couponing, deals without the social must-buy incentives of the daily deal. Subway sandwiches, vacuum cleaners, lots of restaurants, and car care — but all in one place.
  • It incorporates product search, as have previous versions of the product. Consumers can search by product, brand, and store, among other attributes, narrowing or expanding search as they wish, and see where that product is available locally. The big allure, here, is the ability to check whether a product is in stock, at multiple, close-by locations. Search for lamps or shoes or spas, and you’ll find a motley assortment of offers.

So far, the November-launched sites have seen their marketplace traffic “quintuple,” says James Green, chief marketing officer of Travidia and an alum of Raleigh’s pioneering Nando Media. He says that’s due mainly due to “product-centric search engine optimization,” providing a new level of prominence in Google search results. If that base can keep growing, Chris Hendricks sees the sites becoming commercial magnets. Possible new, related streams can include display ads, offering prominence and placement, charging local retailers for ingestion of their inventories and conversion of their print material generally and topical directories, he says.

“Deals are the content,” says Hendricks. He notes, for instance, that news sites’ attempts to connect up editorial content with restaurant directories — using newspapers’ unique and core strengths — hasn’t produced the dividends many of us thought they would. Forget the packaging of feature content with ads; just focus on the ads.

So what can we make of this step forward?

Well, it’s a step, but probably many more are needed. Fronting a site with coupons makes some sense, and will pull in additional audience. Yet the overall research and shopping experience will have to be fuller if these are to become go-to sites with masses of local buyers.

It’s hard to know how many years we are away from the perfection of commerce — you know, getting each of us the kinds of timely and meaningful shopping offers that bring order out of the digital shopping chaos. Certainly, though, here is some of what will be needed:

  • Broader, deeper databases of products: That’s simple to say, and hard to achieve. I asked James Green whether Find n Save is a breakthrough product. Not yet, he said, saying that there’s not yet “enough conversion.” That translates as product search being too spotty; provision of retailers’ real-time inventories is still a work-in-progress. If we as consumers run into more dead-ends than usable deals, we’ll stop coming back.
  • Reviews and recommendations: Find n Save contains none. In a world of imperfect knowledge, we love seeing what dozens of others think of products and services, just like in the early mercados. What’s new, good, and fresh? Throw out the reviews that are outliers, and we’ve got a better-than-even shot of making a better buying decision. Sites without them lack the critical component found in sites from Amazon to Best Buy to Yelp.
  • Preferences and customer knowledge: While some of us are highly concerned about privacy, many others say, ‘Just use your tracking to give me what I want — including deals — and stop spamming me with useless ads.’ So the ability to state preferences and to have my digital behavior intelligently watched — for my benefit — will be a big differentiator.
  • A great tablet product. James Green says Find n Save’s mobile app will be ready soon. Apps are, of course, becoming a price of admission for mobile customers. More importantly, the winning local marketplace will figure out how to combine deep, broad shopping info, social reviews, deals — and to fully embrace the interactive and visual capabilities of the tablet. Just as the iPad — and its newer cousins — are the big do-over opportunity for news companies’ reader business models, they’re also literally a blank slate for the new mercado.

Who will build it? It could be a Travidia, or an Amazon or a Google or a Facebook or a Flipboard-for-commerce so far unborn. There are billions of dollars baiting the hook.

December 22 2010

16:00

New tools and old rules on the sports desk: Making Twitter a part of covering the Denver Broncos

Editor’s Note: Our sister publication Nieman Reports is out with its winter issue, which focuses on changes in beat reporting. We’re highlighting a few entries that connect with subjects we follow in the Lab, but we encourage you to read the whole issue. In this piece Denver Post sportswriter Lindsay Jones talks about how Twitter became part of her day job.

My name is Lindsay Jones, and I am a Twitter-holic.

OK, I admit it. I didn’t take to this Twitter revolution right away. Soon after I joined The Denver Post in the summer of 2008 to be the beat reporter for the Denver Broncos, my editor asked me to tweet as part of my routine at training camp. Twitter wasn’t well known back then, and I remember wondering why anyone would possibly want to receive a 140-character message from training camp or during a nationally televised game.

I did it anyway, and boy, was I wrong.

By the next spring, Twitter — along with other social media — was playing a huge role in my coverage. Tweets were now as big a part of my job as filing stories for the paper, just as they were for my NFL sports writing colleagues. Twitter has completely changed the way we cover football, as I’m sure it has changed all other sports beats.

The Denver Post’s Broncos Twitter account was launched during my first training camp with the team. Since then close to 14,000 tweets have been sent — the majority from me. Nearly all relate directly or indirectly to the Broncos and the NFL, a combination of breaking news from me or my Post partners, analysis (particularly during games), and some back and forth with the public. Some are auto tweets from our Broncos and NFL print and online news stories, columns and analysis.

Keep reading »

January 18 2010

17:51

Singleton’s next chapter: Can he steer MediaNews to a digital future?

[Our regular contributor Martin Langeveld spent 13 years as a publisher in MediaNews Group. That gives him an inside perspective on the company's bankruptcy filing, which he shares with us here. —Ed.]

In August 2006, as part of a deal that netted MediaNews Group the Contra Costa Times, San Jose Mercury News, and the St. Paul Pioneer Press, the Hearst Corporation agreed to make a $300 million equity investment in MediaNews. At that point, the peak of MediaNews’ company’s expansion and with revenue and cash flow at an all-time high, the holdings of the principal stockholders — the Singleton and Scudder families — net of debt, were arguably worth more than $500 million each.

But last Friday, whatever was left of that equity, as well as Hearst’s stake (not finalized until a year later), evaporated as part of an announced plan to file a “prepackaged” Chapter 11 bankruptcy. For Hearst, it’s a hefty writeoff of a bad investment. For the Scudders, it’s a bitter payoff after nearly 25 years of active participation in MediaNews management. For MediaNews CEO William Dean Singleton and his financial wizard, company president Joseph (Jody) L. Lodovic IV, it’s a fresh start (which includes a 20 percent equity stake for the duo, and retained control of the company).

Could readers of the company’s papers now see new investment in its newsgathering capabilities, long hammered by budget reductions? For MediaNews employees, could this be an opportunity to participate in the transformation of the company into a truly digital enterprise? Both answers depend on what kind of vision is shared by Singleton, Lodovic, and the former bondholders who are now their equity partners.

MediaNews’ story

In 1983, Singleton, then a brash 32-year-old newspaperman who already had bought and sold several newspapers, enlisted the help of his friend Richard B. Scudder to buy  the Gloucester County Times in New Jersey. Scudder, former publisher of the Newark Evening News (which his family owned for three generation before selling it in 1972), was founder and president of the Garden State Paper Co., the first commercial-scale producer of recycled newsprint.

Singleton and Scudder went on to create MediaNews Group in March 1985, and steered the company through a long series of deals that eventually built it into the sixth-largest newspaper group (by circulation) in the country — today it owns 54 daily newspapers with a total weekday circulation of about 2.3 million, plus a slew of weeklies and niche products. It also has a television station in Anchorage and a group of radio stations in Texas.

From the outset, Singleton and Scudder agreed to manage MediaNews for growth, and never to pay dividends. Neither of the partners ever personally owned any stock — they put it in trusts for Scudder’s children and grandchildren and for Singleton’s future children. Singleton was only 33, unmarried and childless at the time, but Scudder was 72, so the trust strategy would avoid inheritance taxes in the event of his death.

The company never went public, but because a small portion of its debt was publicly held, it was required for years to file disclosures with the SEC, providing a detailed window into the complex financial structure that enabled its growth. (That window closed in 2008 when the company reached an agreement with bondholders to avoid the filings.)

The financial wizard behind the company’s financial maneuvers was Jody Lodovic, who became chief financial officer in the early 1990s and rose to become president. Together, Singleton and Lodovic created partnerships with Gannett in Texas and New Mexico and with Gannett and Stephens Media in California to which each company contributed its newspapers, with MediaNews assuming the management. They pioneered the concept of “clusters” of papers that could realize economies of scale. They deftly exploited joint operating agreements in Detroit, Charleston, W.V., York, Penn., Salt Lake City and ultimately in Denver at the conclusion of a long battle between MediaNews’ flagship paper, the Denver Post, and the Rocky Mountain News. At times, when cash was tight or they got offers they couldn’t refuse, they sold papers, including the original New Jersey cluster dear to Dick Scudder’s heart.

For Singleton, the elimination of most his company’s debt is a long-delayed goal. As early as 1996, at a retreat for the group’s management and publishers, he outlined strategies including a few more years of acquisitions followed by a push to reduce debt. But somehow, acquisition opportunities kept coming along, and debt reduction was put off. Singleton began to feel that at some point, there would be only two or three newspaper companies left standing, and he wanted MediaNews to be one. To be in the running, the company had to keep growing. Ultimately, revenue tanked not long after the final big deals with McClatchy and Hearst, and MediaNews found itself in workout last April. Given the complexity of its financial structure, it’s not surprising that it took eight months to package the bankruptcy.

For Singleton, it’s not the first disappointing turn, but certainly the biggest. In 1975, pre-MediaNews and at the age of 24, Singleton was involved in an attempt to revive the Fort Worth Press, which had been closed by E. W. Scripps after losing money for two decades. The venture ended in failure after three months. MediaNews bought, but couldn’t make a go of the Dallas Times-Herald, which was closed a few years after Singleton sold it. Later, MediaNews bought the Houston Post but couldn’t make it profitable and sold the assets to Hearst, which owned the dominant Houston Chronicle. Hearst paid $120 million and immediately closed the Post. (The laid-off staffers, calling themselves the Toasted Posties, set up an early social networking site of sorts to stay in touch and swap gossip about Singleton; it was succeeded by a now-dormant blog, and later by a Facebook page.)

Known as a cost-cutter

Though he continues to have a reputation for ruthlessly cutting costs when necessary, Singleton takes a genuine pride and interest in his newsroom staffs. When visiting newspapers, before heading out for dinner with the publisher, he makes of point of visiting the newsroom to see what’s going on. He keeps an eye on editors, reporters and photographers with promise and has promoted some to the Denver Post. He has a mail subscription to every one of his dailies, and when he’s traveling, his sister and personal secretary Pat Robinson sends some of them to his destination in Fedex boxes so he can keep up. Editors are not surprised to get a call from Singleton asking about a local story, or exhorting them to run more local news on the front page. He lets each local paper formulate its own editorial views and endorsements. Before the going got rough, Singleton and Scudder convened annual gatherings of MediaNews publishers to talk strategy; they enjoyed these confabs far better than meetings of publishers.

And as Singleton told the Wall Street Journal in an interview relating to the current bankruptcy process, he continues to press his vision for consolidation of the newspaper industry, telling the Journal he wanted to be the “aggressor” in that effort.  The group’s employees fear that by consolidation, Singleton means more outsourcing or more centralization of operations regionally and nationally. There’s been a lot of that already, and there could be more, but Singleton and Lodovic will now be free to expand their partnerships, to seek mergers with other groups, or to rationalize the market through exchanges of newspaper properties. “Look at the map,” Singleton told the Journal in response to the question of where such consolidations might occur.

Singleton has lived with multiple sclerosis for 24 years; the disease has now robbed him of the use of his legs. In a long and particularly revealing interview last year with the Colorado Statesman, he discussed its effects:

I cheated it for many, many years. The last three years, I haven’t cheated it so well, and it has become more aggressive. I’ve lost the use of my legs and partial use of my arms and fingers. I feel fine most of the time. I’ve never missed work because of it. But clearly the current prognosis isn’t particularly good. The good news about Multiple Sclerosis is, it doesn’t kill you. But it does disable you. Not being able to walk or button your shirts or tie your tie — it’s troubling. But I’d rather be disabled and alive than fully able and headed to the other side. So I count my blessings for all the things it hasn’t taken. But it certainly has taken a lot. I look worse than I feel. I feel pretty good.

I’m still very energetic and do what I want to do. I travel if I want to travel, and get around to the newspapers and go anywhere I want to go. I enjoy life a lot, but I just enjoy it differently without some of the physical things I once had. It’s comical when I go on the road. I can’t button a button because my fingers don’t work. I can’t type anymore. I can’t use a computer because my fingers don’t work. If I go to hotels where I stay regularly, I’ve always got a concierge who’ll come up and button my shirts and help me tie my tie. If I stay in a strange hotel, I ask one of the housekeepers if she’ll button my shirts. She almost wants to call the police or something. You get all kinds of weird looks when you ask a housekeeper, “Would you come here and button my buttons for me?”

And I love it. In some places you get somebody who can’t speak English, so you have to explain how to button a shirt. And some places you get somebody who does, and they first think you’re joking. And then they understand your nod and they start laughing and everything. One of the fun things I have in life when I travel is the look on somebody’s face when I ask them to button my shirt. So you make the best of it.

Clearly, the MS puts some urgency in Singleton’s quest for a legacy. The elimination of most of his debt gives him an opportunity to rebuild newspaper operations that have been hammered for years by revenue declines and the company’s inability to invest adequately in its future (many of the papers are still operating on content management systems installed as Y2K solutions).  Whether he, or Lodovic, will have the vision to turn the company into a truly digital enterprise is an open question. Singleton has an understanding of the web (he helped lead the formation of the Yahoo Newspaper Consortium), but he’s not an active computer user. He has often expressed faith in the future of print, and has strongly espoused charging for content in order to protect the print side of the business: “I think print’s going to be important for a long time…Print is still the meat. Online’s the salt and pepper.”

With that attitude it seems unlikely that Singleton and Lodovic come to share the digital vision of another CEO leading his company out of bankruptcy, Journal Register’s John Paton, who told Jeff Jarvis recently (speaking of his previous company, Spanish-language publisher impreMedia):

The first thing we did was to decide that in our company, a print company, when it came to products we would be digital and brands first and print last. It was our radical way of focusing everyone on the future. By recognizing our competitors and our future were digital everything we built and did had to follow that decision.

Paton is free to pursue that vision at Journal Register, which is also newly unencumbered by debt. The readers and employees of MediaNews could benefit from a similarly unequivocal determination at the top to radically reinvent the business in a truly digital direction.

Disclosure: I worked for MediaNews Group as a publisher for 13 years from 1995 to 2008 at its cluster of four dailies in western New England. In a previous post, I outlined in more detail my suggestions for a more digitally-oriented MediaNews Group.

December 05 2009

22:42

Comcast-NBC merger is likely to affect journalism field

On Thursday, Comcast merged with NBC, which analysts say could be the biggest media merger of the decade. Proponents say this could lead to consumers to watch "what they want, when they want it," according to the Denver Post's Dec. 3 article "Comcast-NBC merger: Goodbye old TV, hello new media." But opponents worry:
"The combination of the country's largest cable company, a TV network, a movie studio plus sports networks could present grave dangers to a free and open Internet," warned Gigi Sohn, president of advocacy group Public Knowledge.
Do you think this will have a positive or negative impact on the field of journalism? Why?
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