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December 07 2011

19:20

Your 2011 holiday gift guide, brought to you by the news

Santa running down the street in Algers, France

If you want to save journalism, you might turn to journalism this year for all your Christmas shopping.

This weekend at NewsFoo, an O’Reilly “un-conference” for about 170 journalists and tech disrupters, the tech writer Mónica Guzmán posed a question: “Can’t we [news organizations] sell anything besides articles?” Yes, it turns out, and there are numerous examples of them trying it.

A couple of months ago Guzmán was talking to an entrepreneur in Seattle who had just sold his latest startup to Google. “We got to talking about journalism, and I’m always fascinated to listen to people who come from an innovative mindset, but not a news mindset, look at news. What he said, basically, is I don’t see how news is really going to innovate and move forward unless they can get past this idea that what they sell is just content.”

News organizations have one big advantage in business: They know their audience.

“We have a huge leg up when it comes to organizing information communities,” she said. “[News outlets] build those communities that can be really specific and really well defined.” (NewsFoo is generally off the record, but Guzmán talked with me after her session.)

Here are a few examples of all the ways news companies are selling non-news products to consumers. Some might look better wrapped up under the tree than others, but if you feel like supporting the news, maybe there’s room on your credit card for one or two of them.

Merchandise!

For the oenophile in your life, buy a gift subscription to the New York Times Wine Club. Six rare wines (four red, two white) for $90 per shipment, or $180 for the most exquisite Reserve Club varietals. Each bottle is paired with tasting notes and an NYT recipe. Europeans can sample Telegraph Wines, “one of the UK’s most respected wine merchants.” A case of six bottles of Prosecco goes for £54 and includes two complimentary Champagne flutes.

Spaceballs: The Flamethrower

The Telegraph doesn’t stop at wine. There’s a Telegraph Garden Shop, Motoring Shop, a travel shop for holiday cottages. You can buy earrings, duvet covers, snow boots, and clothes hangers. “They are the leading retailer of clothes hangers in the U.K.,” said Jeff Jarvis in an April 2010 Editor & Publisher story. The newspaper raked in a quarter of its profit in 2009 from selling things, he said.

The Onion cheaply repurposes tons of its own content into coffee-table books and framed prints. NPR, almost true to stereotype, sells “green gifts,” “gifts for gardeners,” and “gift for tea lovers.” None of those items have NPR branding, just the kind of things a typical NPR listener might like to buy. (And shoppers know their purchase helps support the news.)

The überaggregator Boing Boing sells stuff as weird as that which it aggregates, e.g., rubber finger tentacles, a remote-controlled flying shark, a bacon-scented air freshener. That site outsources the e-commerce software and payment processing.

Specialty iPhone apps

Santa's Hideout screen shot

There are plenty of smartphone and iPad apps that try to generate revenue for news organizations, but it’s less common for there to be an app that doesn’t have anything to do with the outlet’s journalism. Just today we wrote about Condé Nast’s new Santa app, which helps parents assemble and share lists of what their kids want for Christmas.

This summer Hearst Corp. launched its App Lab, a sort of digital R&D unit for the ad agencies who work with Hearst. It was Hearst that developed Manilla, a financial management product for consumers, earlier this year.

Events

In September, the web-only Texas Tribune launched the Texas Tribune Festival, a first annual symposium that brought together politicians, wonks, lobbyists, and others from the universe of Texas politics. (I interviewed editor Evan Smith about it this summer.) Tickets cost $125, but the real money comes from corporate sponsorships. In 2010, before the festival existed, the Tribune raised about $600,000 in event sponsorship, Smith told me. The Tribune festival was modeled on the New Yorker Festival, which also sells tickets and big-name sponsorships. Forbes follows a similar model for its CEO conferences around the world, but those tickets are a lot pricier.

Digital marketing services

Rubber finger tentacles

435 Digital is a Chicago consulting firm that does web design, SEO, and social media — actually, it’s a division of Tribune Co., but you would never know that from looking at its home page. The group is made up of the people who gave us Colonel Tribune and the ChicagoNow blog network.

GannettLocal, too, offers marketing services for local businesses that advertise in Gannett-owned papers. Condé Nast sells its in-house creative talent to advertisers, competing with the very agencies whose work fills the pages of its magazines.

Using reporters’ smarts

The Chronicle of Philanthropy, as I wrote this summer, packages its reporters’ in-house expertise about particular topics as paid webinars that cost as much as $96 apiece.

The premium content, the merch, the events, the consulting, the apps — they are all specialty products for niche audiences. Whether all of the offerings are making money is for another story.

“Last-minute shopping?” by Louise LeGresley used under a Creative Commons license.

April 21 2011

14:00

The newsonomics of a single investigative story

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 a week to celebrate great investigative work. ProPublica made some history with its Pulitzer for online-only work about the financial meltdown, and the Los Angeles Times crowned its success with the larger-than-life Bell corruption tale, winning its own top prize. Both well deserved.

Meanwhile, as journalists sat around their terminals awaiting the Pulitzer bulletin, an investigative series broke across California, perhaps reaching more audience more quickly than any previous investigative piece. There were no bodies to count, nor billions or millions of ill-gotten gains to uncover.

Rather, California Watch’s “On Shaky Ground” series is aimed at preventing disaster, getting ahead of the Grim Reaper. The series took a big look at the likely safety issues in the state’s schools when (not if, right?) The Big One hits. It found, not surprisingly, that although state law mandated seismic preparations, all kinds of bureaucratic nonsense has contravened that intent. It found that about 1,100 schools had been red-flagged as in need of repair, with no work done, while tens of thousands of others were in questionable and possibly illegal shape. The so-what: Some of the very institutions providing for the kids of California have a certain likelihood of actually falling on top of them and killing them.

It’s old-fashioned, shoe-leather, box-opening, follow-the-string journalism, and it is well done.

While it’s fun to celebrate great journalism, anytime, it’s vital to look at the newsonomics of this kind of investigative journalism. What did it take to get it done? How much did it cost and who paid for it? And, to look at the plainly fundamental question: How do we get lots more of it done in the future?

The series took more than 20 months to complete. The interactive timeline, “On Shaky Ground: The story behind the story,” tells that tale with tongue in cheek; it’s a great primer for any beginning journalism class. Corey G. Johnson, freshly hired from North Carolina and part of a young reporting contingent that has been mixed and mentored well by veterans like editorial director Mark Katches, stumbles on a list of 7,500 “unsafe schools” as he’s doing a routine story on the 20th anniversary of the Loma Prieta earthquake.

Along the way, the story grows in import and paperwork. California Watch, the less-than-two-year-old offshoot of the Berkeley-based Center for Investigative Journalism (CIR), adds other staff to the effort, including reporter Erica Perez, public engagement manager Ashley Alvarado, distribution manager Meghann Farnsworth, and director of technology Chase Davis, among other reporters.

In the end, the series rolled out in three parts — with maps, databases, historical photos, its own Twitter hashtag, a “My Quake” iPhone app — and a coloring book (“California Watch finds a new consumer group, kids“), intended to reach kids, the most important subject and object of the reporting. Already, the state legislature has scheduled hearings for April 27.

The reach of the roll-out is one of the new lessons here. Six major dailies ran at least some part of the series. ABC-affiliate broadcasters took the story statewide. Public radio news leaders KQED, in the Bay Area, and KPCC, in L.A. ran with it. KQED-TV. The ethnic press signed on: La Opinion ran two seismic stories Sunday and Monday, while at least two Korean papers, one Chinese paper, and one Chinese TV station included coverage as well. More than 125 Patch sites in the state (California is major Patch turf) participated.

A number of the distributors did more than distribute. They localized, using data from California Watch, and reporting on their local schools’ shape. KQED-TV produced a 30-minute special that is scheduled to air on at least 12 PBS affiliates in the state.

San Francisco Chronicle managing editor Steve Proctor is frank about how priorities and resource use have changed in the age of downsizing. When Proctor came to the paper in 2003, he says, the paper had five to seven people assigned to a full-time investigative team. Now there’s no team per se, with the Chronicle investing investigative resources in an “investigate and publish” strategy, getting stories out to the public more quickly and then following up on public-generated leads they create. It’s an adjustment in strategy and in resource allocation — and the California Watch relationship makes it even more workable. “We’ve been pretty sympatico with them from the beginning,” he said. “We’ve used the majority of what they’ve produced.”

So let’s get deeper into some numbers, informed by this series, and see where this kind of work can go:

  • “On Shaky Ground” cost about $550,000 to produce, most of that in staff time, as the project mushroomed. That’s now a huge sum of money to a newsroom, even a metro-sized one. Ask a publisher whether he or she is willing to spend a half a million on a story, and you know the answer you’ll usually get. It’s a sum few newsrooms can or will invest. Consequently, the economics of getting a well edited, well packaged series for a hundreth of that price is an offer few newsrooms can (or probably should) refuse.
  • California Watch, not yet two years old, runs on a budget of about $2.7 million a year. That budget supports 14 journalists, whose funding takes up about 70 percent of that $2.7 million number. That’s an intriguing percentage in and of itself; most daily newspaper newsrooms make up of 20 percent or less of their company’s overall expenses. So, disproportionately, the money spent on California Watch is spent on journalists — and journalism.

The project is about midway through its funding cycles. The ubiquitous Knight Foundation (which has contributed about $15 million to a number of investigative projects nationwide through its Investigative Reporting Initiative), the Irvine Foundation, and the Hewlett Foundation, all of which have provided million-dollar-plus grants, are reviewing new proposals.

The key word, going forward here, is “sustaining.” Will foundations provide ongoing support of the “public good” of such journalism? There’s lots of talk among foundations, but no clear consensus among journalism-facing ones. “There really isn’t a foundation community that thinks with a common brain — same situation as in the news community,” Knight’s Eric Newton told me this week. “Each foundation makes its own decisions using different criteria. Some foundations see their role as launching new things and letting nature take its course.” CIR executive director Robert Rosenthal is among those trying to find a new course. Although he’s a highly experienced editor, he finds that most of his time is found fund- and friend-raising.

  • California Watch is building a syndication business, feeling its way along. Already, six larger dailies — the San Francisco Chronicle, the Sacramento Bee, the Orange County Register, the San Diego Union-Tribune, the Fresno Bee, and the Bakersfield California — are becoming clients, paying a single price for the all-you-can-eat flow of daily and enterprise stories California Watch produces. They, a number of ABC affiliates (L.A.’s KABC, the Bay Area’s KGO, 10 News San Diego, 10 News Sacramento, KSFN in Fresno), and KQED public radio and TV in the Bay Area are also annual clients pay between $3,000 and $15,000 a year each. A la carte pricing for individual projects can run from $3,000 to $10,000. The California Watch media network, just launched in January, is an important building block of the evolving business model. It is clear that while syndication can be a good support, at those rates, it’s a secondary support.
  • So, if California Watch were to be totally supported by foundation money, it would take an endowment of $54 million to throw off $2.7 million a year, at a five percent spend rate. Now $54 million raised one time isn’t an impossible sum. Consider just one gift: Joan Kroc left NPR more than $200 million eight years ago. Consider that the billionaires’ club started by Bill Gates and Warren Buffett (encouraging their peers to give away half of their wealths) is talking about newly raising a half a trillion dollars for the public good. Last summer, I suggested the group tithe a single percentage point of the club’s treasury for news-as-a-public-good. It seems to me that stories like “On Shaky Ground” make that pivotal education/health/journalism connection; send “Shaky Ground” to your favorite billionaire and urge him to sign on.
  • Let’s do some cost-benefit analysis. How much is a single child’s life worth? How about a school of 250? We could consult a liability lawyer, who undoubtedly would put assign a six- and seven-figure number per life, and then tie up the courts, post-disaster, making the math work. So if California, bereft as it is of capital, were to invest in the infrastructure, per its own laws, wouldn’t it be ultimately cost-effective? Of course it would be, and in this case we see in microcosm, the question of American infrastructure writ large. Are we a country that will let more bridges fall into mighty rivers, more schools fall onto our children and more poor roads cause preventable injury and death? You don’t need my political rant here. Rather, let us just make the point that journalism — old-fashioned journalism, newly digitally enhanced — is a key part of forcing America to face its own issues, whatever the solutions.

In this project and in California Watch generally, we see the reconfiguring of local media. An owner — whether AOL, Hearst, or private equity — can hardly reject the offer of paying one-hundreth of the cost for space-filling, audience-interesting content. Welcome to a new kind of content farm, to use that perjorative for a moment. Yes, California Watch operates on the same Demand Media-like principle of create-once-distribute-many, realizing the digital cost of the second copy is nil. Let’s consider it the organic, cage-free content farm. It makes sense for a state the size of a country (California = Canada); smaller versions of it make equal sense for Ohio, North Carolina, or Illinois.

Older media outsources journalism and in-sources (affordable) passion. There are lots of lessons here (“3 Reasons to Watch California Watch“), but that fundamental rejiggering of who does the work and how it is distributed and customized is a key one. As Mark Katches points out, “They [distributing partners] put their voices on our story.” That’s a new system in the making.

Old(er) editors can learn new tricks. For a good show-and-tell of that principle, check out Rosenthal’s talk to TEDxPresidio two weeks ago. I first saw him give the talk at NewsFoo in Phoenix in December. Amid more tech-oriented talks, his stood out and was much applauded. It’s a clarifying call for real journalism, perfected for the digital age. Share it.

December 10 2010

15:00

This Week in Review: The WikiBacklash, information control and news, and a tightening paywall

[Every Friday, Mark Coddington sums up the week's top stories about the future of news and the debates that grew up around them. —Josh]

Only one topic really grabbed everyone’s attention this week in future-of-news circles (and most of the rest of the world, too): WikiLeaks. To make the story a bit easier to digest, I’ve divided it into two sections — the crackdown on WikiLeaks, and its implications for journalism.

Attacks and counterattacks around WikiLeaks: Since it released 250,000 confidential diplomatic cables last week, WikiLeaks and its founder, Julian Assange, have been at the center of attacks by governments, international organizations, and private businesses. The forms and intensity they’ve taken have seemed unprecedented, though Daniel Ellsberg said he faced all the same things when he leaked the Pentagon Papers nearly 40 years ago.

Here’s a rundown of what’s happened since late last week: Both Amazon and the domain registry EveryDNS.net booted WikiLeaks, leaving it scrambling to stay online. (Here’s a good conversation between Ethan Zuckerman and The Columbia Journalism Review on the implications of Amazon’s decision.) PayPal, the company that WikiLeaks uses to collect most of its donations, cut off service to WikiLeaks, too. PayPal later relented, but not before botching its explanation of whether U.S. government pressure was involved.

On the government side, the Library of Congress blocked WikiLeaks, and Assange surrendered to British authorities on a Swedish sexual assault warrant (the evidence for which David Cay Johnston said the media should be questioning) and is being held without bail. Slate’s Jack Shafer said the arrest could be a blessing in disguise for Assange.

WikiLeaks obviously has plenty of critics: Christopher Hitchens called Assange a megalomaniac who’s “made everyone complicit in his own private decision to try to sabotage U.S. foreign policy,” and U.S. Sens. Dianne Feinstein and Joe Lieberman called for Assange and The New York Times, respectively, to be prosecuted via the Espionage Act. But WikiLeaks’ many online defenders also manifested themselves this week, too, as hundreds of mirror sites cropped up when WikiLeaks’ main site was taken down, and various online groups attacked the sites of companies that had pulled back on services to WikiLeaks. By Wednesday, it was starting to resemble what Dave Winer called “a full-out war on the Internet.”

Search Engine Land’s Danny Sullivan looked at the response by WikiLeaks’ defenders to argue that WikiLeaks will never be blocked, and web pioneer Mark Pesce said that WikiLeaks has formed the blueprint for every group like it to follow. Many other writers and thinkers lambasted the backlash against WikiLeaks, including Reporters Without Borders, Business Insider’s Henry Blodget, Roberto Arguedas at Gizmodo, BoingBoing’s Xeni Jardin, Wired’s Evan Hansen, and David Samuels of The Atlantic.

Four defenses of WikiLeaks’ rights raised particularly salient points: First, NYU prof Clay Shirky argued that while WikiLeaks may prove to be damaging in the long run, democracy needs it to be protected in the short run: “If it’s OK for a democracy to just decide to run someone off the internet for doing something they wouldn’t prosecute a newspaper for doing, the idea of an internet that further democratizes the public sphere will have taken a mortal blow.” Second, CUNY j-prof Jeff Jarvis said that WikiLeaks fosters a critical power shift from secrecy to transparency.

Finally, GigaOM’s Mathew Ingram and Salon’s Dan Gillmor made similar points about the parallel between WikiLeaks’ rights and the press’s First Amendment rights. Whether we agree with them or not, Assange and WikiLeaks are protected under the same legal umbrella as The New York Times, they argued, and every attack on the rights of the former is an attack on the latter’s rights, too. “If journalism can routinely be shut down the way the government wants to do this time, we’ll have thrown out free speech in this lawless frenzy,” Gillmor wrote.

WikiLeaks and journalism: In between all the attacks and counterattacks surrounding him, Julian Assange did a little bit of talking of his own this week, too. He warned about releasing more documents if he’s prosecuted or killed, including possible Guantánamo Bay files. He defended WikiLeaks in an op-ed in The Australian. He answered readers’ questions at The Guardian, and dodged one about diplomacy that started an intriguing discussion at Jay Rosen’s Posterous. When faced with the (rather pointless) question of whether he’s a journalist, he responded with a rather pointless answer.

Fortunately, plenty of other people did some deep thinking about what WikiLeaks means for journalism and society. (The Atlantic’s Alexis Madrigal has a far more comprehensive list of those people’s thoughts here.) Former Guardian web editor Emily Bell argued that WikiLeaks has awakened journalism to a renewed focus on the purpose behind what it does, as opposed to its current obsession with the models by which it achieves that purpose. Here at the Lab, USC grad student Nikki Usher listed a few ways that WikiLeaks shows that both traditional and nontraditional journalism matter and pointed out the value of the two working together.

At the Online Journalism Review, Robert Niles said that WikiLeaks divides journalists into two camps: “Those who want to see information get to the public, by whatever means, and those who want to control the means by which information flows.” Honolulu Civil Beat editor John Temple thought a bit about what WikiLeaks means for small, local news organizations like his, and British j-prof Paul Bradshaw used WikiLeaks as a study in how to handle big data dumps journalistically.

Also at the Lab, CUNY j-prof C.W. Anderson had some thoughts about this new quasi-source in the form of large databases, and how journalists might be challenged to think about it. Finally, if you’re looking for some deep thoughts on WikiLeaks in audio form, Jay Rosen has you covered — in short form at PBS MediaShift, and at quite a bit more length with Dave Winer on their Rebooting the News podcast.

How porous should paywalls be?: Meanwhile, the paid-content train chugs along, led by The New York Times, which is still planning on instituting its paywall next year. The Times’ digital chief, Martin Nisenholtz, dropped a few more details this week about how its model will work, again stressing that the site will remain open to inbound links across the web.

But for the first time, Nisenholtz also stressed the need to limit the abuse of those links as a way to get inside the wall without paying, revealing that The Times will be working with Google to limit the number of times a reader can access Times articles for free via its search. Nisenholtz also hinted at the size of the paywall’s target audience, leading Poynter’s Rick Edmonds to estimate that The Times will be focusing on about 6 million “heavy users of the site.”

Reuters’ Felix Salmon was skeptical of Nisenholtz’s stricter paywall plans, saying that they won’t be worth the cost: “Strengthening your paywall sends the message that you don’t trust your subscribers, or your subscribers’ non-subscriber friends: you’re treating them as potential content thieves.” The only way such a strategy would make sense, he said, is if The Times is considering starting at a very high price point, something like $20 a month. Henry Blodget of Business Insider, on the other hand, is warming to the idea of a paywall for The Times.

In other paid-content news: News Corp.’s Times of London, which is running a very different paywall from The New York Times, may have only 54,000 people accessing content behind it, according to research by the competing Guardian. The Augusta (Ga.) Chronicle announced it’s launching an metered model powered by Steve Brill’s Press+, a plan Steve Yelvington defended and Matthew Terenzio questioned.

While one paid-content plan gets started, another one might be coming to an end: Newsday is taking its notoriously unsuccessful paywall down through next month, and several on Twitter guessed that the move would become permanent. One news organization that’s not going to be a pioneer in paid online news: The Washington Post, as Post Co. CEO Don Graham said at a conference this week.

Reading roundup: Other than the ongoing WikiLeaks brouhaha, it’s been a relatively quiet week on the future-of-news front. Here’s a bit of what else went on:

— Web guru Tim O’Reilly held his News Foo Camp in Arizona last weekend, and since it was an intentionally quiet event, it didn’t dominate the online discussion like many such summits do. Still, there were a few interesting post-Newsfoo pieces for the rest of us to chew on, including a roundup of the event by TBD’s Steve Buttry, Alex Hillman’s reflections, and USC j-prof Robert Hernandez’s thoughts on journalists’ calling a lie a lie.

— A few iPad bits: News media marketer Earl Wilkinson wrote about a possible image problem with the iPad, All Things Digital’s Peter Kafka reported on the negotiations between Apple and publishers on iTunes subscriptions, and The New York Times’ David Nolen gave some lessons from designing election results for the iPad.

— The Guardian’s Sarah Hartley interviewed former TBD general manager Jim Brady about the ambitious local online-TV project, and Lost Remote’s Cory Bergman looked at TBD and other local TV online branding efforts.

— Advertising Age’s Ann Marie Kerwin has an illuminating list of 10 trends in global media consumption.

— Finally, two good pieces from the Lab: Harvard prof Nicholas Christakis on why popularity doesn’t equal influence on social media, and The New York Times’ Aron Pilhofer and Jennifer Preston provided a glimpse into how one very influential news organization is evolving on social media.

December 09 2010

17:00

The Newsonomics of Do Not Track

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

Just in time for Christmas, we have cookie madness. No, not the sugared kind — the tracking kind. With pugnacious FTC Chair Jon Leibowitz taking on yet another big topic (saving media, net neutrality), we’re talking about tracking technologies — what’s fair, what’s legal, and what’s right.

On Dec. 1, Leibowitz put forward a 122-page Do Not Track proposal, officially inviting public comment due Jan. 31. Industry groups of many kinds, including the Online Publishers Association, are busily preparing responses. It’s unclear, as often the case with things digital, where the FTC jurisdiction ends and where Congress’ assent is required. There will be all kinds of twists and turns in the politics of Do Not Track (where, for instance, will the Tea Partiers stand, pro-unfettered individual liberty or anti-government regulation?), but when the dust settles, expect the following:

  • It’ll be easier for consumers to opt out of being tracked. That may be a simple one-click cookie, or something still a little complicated, but considerably easier than the multi-step approach required today. (I asked a group at NewsFoo, a tech-savvy bunch, how many knew how to turn off tracking. Only five out of 40 raised their hands.)
  • The advertising industry will seek to find new ways to further target, no matter what new hurdles are put in front them.

This isn’t an abstract debate about consumer rights or Big Brother. It’s a debate that could have profound implications for news media. If rules are re-written, we could see a re-balancing of power among news media, advertisers, ad agencies, and the ad networks. Therein may lie billions of dollars in ad spending — and revenue splits — in the years ahead.

If you attend an digital ad conference or talk to leaders in the industry, you’ll see the same PowerPoint (or Keynote): The perfection of commerce is coming soon. Ad-targeting technologies are getting smarter each day, creating better analytics about…us, collectively and individually. The coming perfection: I only get the kinds of commercial messages that make sense to deliver to me, based on all the known info about me, my reading patterns, and shopping habits. Sure, some mass branding — Coke in both Times Square and Tokyo’s Shibuya Crossing — will always be valuable. Most advertising messages, though, will be targeted. Targeted advertising is more effective, cheaper to deliver, and cuts out waste.

In that paradigm, media isn’t an enemy, exactly. It’s just friction. Media that helped deliver audiences for many decades now is a kind of friction. In the last several years, particularly, old media brands have eschewed ad networks as much as they thought they could, selling “premium” inventory. That means leveraging the authority of the news brand and its association with the deep pockets of affluent readers. We’ve seen some success there, but have to wonder how long it might last as targeting technologies get better and better. Why deal with the friction of separate media buys, if you can cherry-pick the audiences you want wherever they may be at the moment?

In classic web theory, it’s disintermediation: The connection between media and consumers is dissolving, with marketers able to reach end users more directly.

Enter a new age of Do Not Track. Maybe, in that world, news media’s role — and its engagement with audiences — becomes much more valuable. Maybe, it’s a reintermediation of a kind, as news media’s role in the shopping/buying lives of its readers re-emerges, digitally.

How might this happen? If we look at the potential newsonomics of Do Not Track, we can see at least two ways that real revenue can be driven out of the reordering of the tracking world.

First, the FTC proposal treats first-party tracking differently than third-party tracking. First-party tracking means that media, or really any company, tracks the behavior of its customers, those who have chosen to have a relationship with the brand. First-party tracking would allow online publishers to use analytics, drawn from web usage and registration data, to better target content for readers and viewers. And first-party tracking should allow some ad targeting of readers by a publisher on its own site — though that question will get muddier, depending on how Do Not Track actually works.

If publishers — especially big publishers, with the scale of audience of the Times, the Journal, Reuters, and portals — can help advertisers target consumers, then their audiences may become relatively more valuable, and advertising messaging higher priced. The “relative” here is relative to what advertisers can do off big brand sites. If Do Not Track constrains that in a significant way, that big news brands can offer relatively better targeting. That means a $10 CPM ad may be instead sold for $16, for instance, and the value of targeting can add up to tens of millions for each company annually. For a U.S. online ad industry now galloping to 17 percent 3Q growth (and expected similar growth next year) to a $25.8 billion expected 2010 final number, that targeting advantage could mean billions.

Second, publishers might further monetize the voluminous data they are harvesting. They could sell it. Data, media have come to understand, isn’t exhaust — it’s gold, if properly mined, and deeply valuable to advertisers and agencies.

Krux Digital, which works with publishers to track data usage, recently put out a report saying that “data skimming” by third-party networks was costing “premium publishers” $850 million a year. In other words, networks were placing cookies on publisher sites, alighting with lots of data that they then used to target other advertising. The number could be high (Krux has an interest in a high number; the higher the number, the more apparent need for its services), but there’s significant money left under some table, largely unbeknownst to publishers. If Do Not Track puts more power back into the hands of the publisher, then publishers may be help to re-sell the information — and that could help build toward the new business model news publishers’ need.

The FTC, of course, isn’t setting out to provide publishers with a new revenue stream. It’s trying to protect consumers.

Consequently, in industry responses to the FTC, OPA and other news industry groups have to be smart. They have to not only give lip service to being pro-consumer. They have to talk about how they can be pro-consumer, and much more transparent about how they use consumer data. They can proudly talk about delivering better news products. They can talk about improving the researching/shopping/buying experience. They can get beyond what some note as the “creepiness factor” of tracking, by offering up fundamental rules about how they’d be clear with their readers and viewers about what is being shared, what’s not and about consumer choices. They could also offer consumers incentives to share info.

They can re-establish, and reinforce, new stronger relationships with readers, in perfect synchronicity with the efforts of some to charge for digital news content.

The big opportunity, perhaps, is the ability of news publishers to transparently offer reader/consumers the opportunity to “opt in” to a wider world of reading and shopping targeting. Then, they could re-emerge, in the tablet era no less, as community and national centers of news — and commerce. Forget Foursquare; readers could check into their favorite news companies.

Track photo by HKmPUA used under a Creative Commons license.

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