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September 04 2012


April 24 2012


Collaborating for Dollars: How to Raise Revenue With Others

At the recent Collab/Space 2012 event, more hands shot up when Journalism Accelerator's Emily Harris asked who was interested in generating revenue than for any other question. Clearly, there's big interest in collaborating to earn money.

Here, then, are some pointers on collaborating to earn revenue and otherwise improve business performance.

Share The Pie to Make It Bigger

The common model in the media business used to be that one party would pay another a flat fee for a specified service or product. A publisher, for example, paid a vendor for printing or distribution. A freelancer got a check for a specified amount, agreed upon in advance.

PieThese days, however, it's increasingly common for two parties in a media deal to share revenue as it grows, rather than for one to fork over a single lump sum -- an approach that aligns interests and keeps both sides working toward the same goal.

Content creators for platforms like YouTube, BlogTV and Yahoo Voices can earn more revenue as what they produce gets more traffic. Vendors like AdSense and ad networks collect a share of revenue as it's earned, rather than simply charging a fee upfront for their technology.

Sure, if you're a content creator, it can be hard to let go of the impulse to keep all the money your efforts earn -- after all, the more participants there are, the more revenue has to be generated to support them. But your chances of earning more revenue grow if more people are collaborating to help make a project a success.

Help Promotion and Distribution

The more people or organizations there are collaborating on a media effort, the more promotional and distribution outlets become available, from websites to social networks, broadcast outlets, emails, mobile platforms, word of mouth, and so on. 

A New York Times executive recently told me that the paper's collaboration with WNYC on SchoolBook generates a lot more awareness of the education website because of the radio station's reach. (Read our previous coverage of SchoolBook.)

Lowell Bergman

Such active linking and sharing can, in turn, increase a product's search engine visibility, thus generating more traffic over time. And every additional pageview that carries revenue opportunities such as ads equals more money over time.

For non-profits, increased traffic can lead to increased funding.

"Collaborations could lead to ... more recognition, more distribution and more impact for stories," MediaShift's Mark Glaser, who co-hosted Collab/Space with UC Berkeley's Investigative Reporting Program (Berkeley IRP), wrote on a discussion thread started by Harris on the Journalism Accelerator website. "That could lead to more donations, memberships and foundation interest for funding."

At Collab/Space, co-host Lowell Bergman of Berkeley IRP pointed out that a Frontline collaboration with another news organization generated twice the viewership of a typical episode of the investigative documentary series.

Increase Efficiencies and Decrease Costs

In today's resource-starved news business, with reporters being laid off and fact-checking and copy desks eviscerated, it's increasingly difficult for any individual news organization to have the person-hours needed to carefully report a story and get it right.

"Collaboration has become something that is not just optional," Glaser said at the event. "It's become something that's really required and necessary."

Collaborating creates efficiencies by enabling partners to report and produce different parts of the same story. Rather than having multiple partners send a reporter or camera operator to a news conference, the partnership can send one coverage team, and other staff can focus on complementary work. People who are good at writing can write; those who specialize in video production can focus on that; and so forth. Organizations can share resources on the business side, too.

"Do we all want to be islands, or do we want to collaborate, share things like back-office operations?" asked Evelyn Larrubia of the Investigative News Network collaborative, which helps its dozens of members share "back-end" resources such as billing and accounting. "The problem we're solving is not a content problem. It's a resource problem and a depth problem."

Change the Mentality and Learn "Coopetition"

arm wrestling

Journalists needed to learn, as technologists in Silicon Valley have, that sometimes, cooperation with competitors is the best thing for your business, Glaser said. Facebook, Google, Twitter, Foursquare and many other media and technology companies share some level of information and code with competitors, knowing they'll be stronger for having done so.

As The Huffington Post, Business Insider, and Gawker have shown, others will share your material and build a business on it with or without your active participation; in that case, it's better to form proactive partnerships for mutual benefit.

Many news organizations and some journalists still tend to be proprietary about their efforts. But in a linked economy, why invest resources in "matching" a story that's just a click away?

"We have to have this kind of cultural shift," Glaser said. "There's a kind of ownership of the story that ... becomes about us. 'I want this scoop, I want the award.' What we have lost along the way is it's not about us, it's about serving people -- uncovering things that are important."

Oakland Local's Susan Mernit talked at Collab/Space about a for-profit news organization that "doesn't link out" and refused to help fund her organization's efforts to contribute to their site for fear her not-for-profit group would eventually overtake them. Both, actually, could have benefited and earned more revenue from the content.

Build Smart Networks to Build Value

Collaboration can take advantage of the network effect, the concept that the more nodes there are in a network, the more value there is to the network and to each of those nodes -- even when the nodes are competitors.

One apt illustration is "private label" ad networks that allow similar, sometimes competitive websites to aggregate their page views and communities through platforms such as Addiply, BSA Private Label and AdKiwi and increase each site's ability to appeal to advertisers they'd have more trouble reaching on their own.

In one example, a group of local websites that reach different neighborhoods around Chicago are banding together and increasing their ability to sell throughout the region with one sales staff.

Large media companies such as NBC Universal and Cox media have formed their own private label networks to group sites by subject, such as health, sports and food. Collaborating in this way can lead to more revenue for all.

Limit Liability

Imagine if CBS News had collaborated with computer experts to vet documents allegedly showing George W. Bush shirked his duties in the National Guard, or if Jason Blair had collaborators on his false stories published in Times. In each case, the news organization could have saved huge embarrassment and cost, and even kept the focus on the issues in the stories rather than the mistakes.

Also, the more contributors and organizations there are behind a story, the less easy it is for someone offended by it to take legal action. As Bergman noted, "If you can spread the liability on a story," you can make those who might sue think a little more before they do.

By its nature, business is a collaborative venture. All sides must derive value for a deal to succeed, and that's never been truer than in today's media business. Journalists who've grown up in a lone wolf, competitive culture would do well to emulate the lessons of their brethren in other domains.

Related Stories

> Collab/Space 2012: Building Trust, Tools and Relationships for Collaborating by Meghan Walsh

> Live Coverage of the Collab/Space 2012 Event by Ashwin Seshagiri

> Collab/Space 2012 Detailed Agenda

Keep up with all the new content on Collaboration Central by following our Twitter feed @CollabCentral or subscribing to our RSS feed or email newsletter:

Get Collaboration Central via Email

An award-winning former managing editor at ABCNews.com and an MBA (with honors), Dorian Benkoil handles marketing and sales strategies for MediaShift, and is the business columnist for the site. He is SVP at Teeming Media, a strategic media consultancy focused on attracting, engaging, and activating communities through digital media. He tweets at @dbenk and you can Circle him on Google+.

Pie photo courtesy of Flickr user Mackenzie Mollo; arm wrestling photo courtesy of Flickr user Fabio Venni.

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February 10 2012


This Week in Review: Facebook’s future and the open web, and finding balance on breaking news

Is Facebook a threat to the open web?: There was still a lot of smart commentary on Facebook’s filing for a public stock offering rolling in last late week, so I’ll start with a couple pieces I missed in last week’s review: Both The Atlantic’s Alexis Madrigal and Slate’s Farhad Manjoo were skeptical of Facebook’s ability to stay so financially successful. Madrigal said it’s going to have to get a lot more than the $4.39 in revenue per user it’s currently getting, and Manjoo wondered about what happens after the social gaming craze that’s been providing so much of Facebook’s revenue passes.

How to supplement those revenue streams? A lot of the answer’s going to come from personal data aggregation, and law professor Lori Andrews wrote in The New York Times about some of the dark sides of that practice, including stereotyping and discrimination. Facebook also needs to move more deeply into mobile, and Wired’s Tim Carmody documented its struggles in that area. On the bright side, Wired’s Steven Levy approved of Mark Zuckerberg’s letter to shareholders and his articulation of The Hacker Way.

Facebook’s filing also spurred an intriguing discussion of the relationship between it, Google, and the open web. As web pioneer John Battelle said best and The Atlantic’s James Fallows summarized aptly, several observers were concerned that Facebook’s rise and Google’s potential decline is a loss for the open web, because Google built its financial success on the success of the open web while Facebook’s success depends on increased sharing inside its own private channels. As Battelle argued, this private orientation threatens the core values that should drive the Internet: decentralization, a commons-based ethos, neutrality, interoperability, and data openness. Mathew Ingram of GigaOM countered that users don’t care so much about openness as usefulness, and that’s what could eventually do Facebook in.

Another Facebook-related discussion sprung up around Evgeny Morozov’s piece for The New York Times lamenting the death of cyberflânerie — the practice of strolling through the streets of the web alone, taking in and reflecting on its sights and sounds. Among other factors, he pinpointed Facebook’s “frictionless sharing” as the culprit, by mandating that all experiences be shared and tailored to our narrow interests. Sociologist Zeynep Tufekci pushed back against Morozov’s argument, countering that there’s still plenty of room for sharing-based serendipity because our friends’ interests don’t exactly line up with our own. And journalist Dana Goldstein argued that a lot of what yesterday’s flâneurs did is still echoed in the web today, for better or worse — cyberstalking, trying out new identities, and presenting our ideal selves to the public.

The clampdown on breaking news via Twitter: One of international journalism’s leaders in social media innovation, News Corp.’s Sky News, issued a surprisingly stern crackdown on its journalists’ Twitter practices, banning them from retweeting information from any other journalists without clearing it past the news desk and from tweeting about anything outside their beats.

There were a few people in favor of the new policy — Forbes’ Ewan Spence applauded the ‘better right than first’ approach, and Fleet Street Blues rather headscratchingly asserted that “it makes no sense for them to pay journalists to report through a medium outside its own editorial controls.” But far more people were crying out in opposition.

Reuters’ Anthony De Rosa reiterated that argument that a retweet is simply a quote, rather than an endorsement, and Breaking News’ Cory Bergman said not all the broadcast rules apply to Twitter — it’s okay to be human there. GigaOM’s Mathew Ingram and POLIS’ Charlie Beckett made the point that Sky should want its reporters to be seen as go-to information sources, period — no matter where the information comes from. As Beckett put it: “We the audience now privilege interactivity and added value over conformity. We trust you because you share, not because you have hierarchical structures.”

The BBC also updated its social media guidelines to urge reporters not to break news on Twitter before they file it to the BBC’s internal systems. BBC social media editor Chris Hamilton quickly clarified that the policy wasn’t as restrictive as it sounded: The BBC’s tech allows its journalists to file simultaneously to Twitter and to its newsroom CMS (an impressive feat in itself), and when that tech isn’t available, they want their journalists to file to the newsroom first — “a difference of a few seconds.”

J-prof Alfred Hermida said the idea that journalists shouldn’t break news on Twitter rests on the flawed assumption that journalists have a monopoly on breaking the news. And on Twitter, fellow media prof C.W. Anderson asserted that the chief problem lies in the idea that breaking news adds significant value to a story. “The debate over “breaking news on Twitter” is a perfect example of mistaking professional values for public / financial / ‘rational’ ones,” he wrote. Poynter’s Jeff Sonderman, meanwhile, praised the BBC for putting some real thought into how to fit Twitter into the breaking news workflow.

An unclear picture of the Times’ paywall: The New York Times released its fourth-quarter results late last week, and, as usual with their recent announcements, it proved something of a media business Rorschach test. The company reported a loss of $39.7 million for the year, thanks in large part to declines in advertising revenue — though most of that was due to About.com, as revenue in its news division was slightly up for the quarter.

As for the paywall, media analyst Ken Doctor reported 390,000 digital subscribers and estimated the Times’ paywall revenue at $86 million and said the paper has climbed a big mountain in getting more than 70 percent of its print subscribers to sign up for online access. Reuters’ Felix Salmon saw the paywall numbers as “unamiguously good news” and said it shows the paywall hasn’t eaten into ad revenues as much as it was expected to.

Others were a bit less optimistic. GigaOM’s Mathew Ingram said the Times’ new paywall revenue still isn’t enough to make up for its ad revenue declines, and urged the times to go beyond the paywall in hunting for digital revenue. Media analyst Greg Satell made a similar point, arguing that the paywall is a false hope and calling for the Times build up more “satellite” brands online, like the Wall Street Journal’s All Things Digital. Henry Blodget of Business Insider had a different solution: Keep cutting costs until the newsroom is down to a size that can be supported by a digital operation.

A nonprofit journalism merger: After a few weeks of speculation, two of the U.S.’ more prominent nonprofit news operations, the Bay Citizen and the Center for Investigative Reporting, have announced their intent to merge. Both groups are based in California’s Bay Area, and the CIR runs the statewide news org California Watch. The executive director of the new organization would be Phil Bronstein, the CIR board chairman and former San Francisco Chronicle editor.

Opinions on the move were mixed: Oakland Local founder (and former California Watch consultant) Susan Mernit thought it would make a lot of sense, combining the Bay Citizen’s strengths in funding and distribution with California Watch’s strengths in editorial content. Likewise, the Lab’s Ken Doctor saw it as an opportunity to make local nonprofit journalism work at an unprecedented scale.

There are reasons for caution, though. As Jim Romenesko noted, the Bay Citizen has recently gone through several key departures and the unexpected death of its co-founder and main benefactor, Warren Hellman (and even forgot to renew its web domain for a bit). And California Watch pointed out some of the potential conflicts between the two newsrooms — California Watch has a partnership with the Chronicle, whom the Bay Citizen considers a competitor. And the Bay Citizen has its own partnership with The New York Times for its regional edition, something PBS MediaShift’s Ashwin Seshagiri said could now prove as much a hindrance as an advantage.

J-prof Jay Rosen said the two orgs aren’t a good fit because of their differing institutional bases — the CIR is more established and has been on a steady build, while the Bay Citizen’s short history is full of turmoil. And the San Francisco Bay Guardian’s Steven Jones argued that Bronstein’s rationale for the merger is misrepresenting Hellman’s wishes.

Reading roundup: Lots of other stuff going on this week, too. Here’s a quick rundown:

— Another week, another few new angles to the already enormous News Corp. phone hacking scandal: The FBI is investigating the company for illegal payments of as much £100,000 to foreign officials such as police officers, a political blogger told British officials that the Sunday Mirror’s top editor personally authorized hacking, and The Times of London admitted it hacked into a police officer’s email to out him as the author of an anonymous blog. How much is this whole mess costing News Corp.? $87 million for the investigation alone last quarter.

— News Corp.’s tablet news publication The Daily got the one-year treatment with an update on its so-so progress in The New York Times. News business analyst Alan Mutter also gave a pretty rough review of the status of tablet news apps as a whole.

— A couple of other news developments of interest to folks in our little niche: The tech news site GigaOM announced it was buying paidContent from the Guardian (PBS MediaShift’s Dorian Benkoil loved the move, and the Knight Foundation announced the first of its new News Challenge competitions, this one oriented around networks.

— A couple of cool studies released this week: One from HP Labs on predicting the spread of news on Twitter, and another from USC on ways in which the Internet is changing us.

— Finally, for those of us among the digitally hyper-connected, The New York Times’ David Carr wrote a poignant piece on the enduring value of in-person connections, and sociologist Zeynep Tufekci offered a thoughtful response.

Original Twitter bird by Matt Hamm used under a Creative Commons license.

February 03 2012


This Week in Review: Twitter’s censorship compromise, and Facebook files with big numbers

Twitter spells out its censorship policy: Just a couple of weeks after the SOPA/PIPA fight came to a head, Twitter pushed the discussion about online censorship a bit further when it announced late last week a new policy for censoring tweets: When Twitter gets requests from governments to block tweets containing what they deem illegal speech, its new policy will allow it to block those tweets only to readers within that country, leaving it visible to the rest of the world. Twitter will send notice that it’s blocked a tweet to the censorship watchdog Chilling Effects.

As the Guardian and The New York Times noted, much of the initial response among Twitter users consisted of complaints about censorship and the chilling of free speech in countries with oppressive regimes. The policy had critics elsewhere, too: BoingBoing’s Xeni Jardin said “it’s hard to see this as anything but a huge setback and disappointment,” and the international group Reporters Without Borders sent an open letter to Twitter questioning the policy and urging the company to reconsider. And later, BoingBoing’s Rob Beschizza pointed out that even though Twitter implied that it had already been blocking tweets at the request of governments (which would have made the new policy a reduction in censorship), it’s never actually done so — only in response to legal challenges on copyright issues.

But perhaps surprisingly, Twitter had far more defenders than critics among media observers. Alex Howard of GovFresh put together the most comprehensive roundup of opinions on the subject, praising Twitter himself for “sticking up for users where it can.” Two free-speech advocates, Mike Masnick of TechDirt and the Electronic Frontier Foundation’s Jillian York, made similar arguments: When a government is demanding censorship, Twitter can either refuse and be blocked entirely in that country, or it can comply. Twitter, they said, has chosen the latter in as limited and transparent fashion as possible.

Others, like The Next Web’s Nancy Messieh, commended Twitter for shifting the censorship focus to the government — as Reuters’ Paul Smalera argued, the gray box noting that a tweet has been censored in a certain country is a black mark for that government, not Twitter. The broadest argument in Twitter’s defense came from sociologist Zeynep Tufekci, who, in addition to these arguments, also praised Twitter for its transparency and for allowing users an easy way to circumvent censorship.

Still others weren’t firmly on either side regarding the policy itself, but pointed to larger issues surrounding it. Media prof C.W. Anderson said that while Twitter did the best it could under the circumstances but showed it doesn’t have any values that override its place as a business: “non-market values are, in the long run, incompatible with the logic of the market, and what Twitter is trying to do now is reconcile what it believes with what the market needs it to do.” Tech pioneer Dave Winer called for people to learn to be able to organize themselves outside of Twitter’s infrastructure and the possibly of censorship.

In a pair of thoughtful posts, GigaOM’s Mathew Ingram advised caution in trusting Twitter, recognizing that like Google and Facebook, it’s a business whose interests might not align with our own. The EFF’s York and Eva Galperin encouraged users and observers to keep a close eye on Twitter in order to keep them accountable for adhering to their professed beliefs.

Facebook goes public: Facebook’s much-anticipated filing for a public stock offering came on Wednesday, and The New York Times and Danny Sullivan at Marketing Land have the best quick-hit summaries of the S-1 document. The big numbers are mind-bogglingly big: 845 million monthly active users, $5 billion in stock, $3.71 billion in revenue last year, $1 billion in profit. Of that revenue, 85% came from advertising, and 12% came from the social gaming giant Zynga alone. (All Things D has the background on that relationship.) And when you average it out, Facebook’s only getting $4.39 in revenue per active user.

Aside from the numbers, among the other items of interest from the filings was its risk assessment — as summarized by Mashable, it sees slowing expected growth, difficulty in making money off of mobile access, competition from the likes of Google and Twitter, and global government censorship as some of its main risk factors. There’s also Mark Zuckerberg’s letter to shareholders, annotated with delightful snark by Wired’s Tim Carmody, which includes the explanation of a company code Zuckerberg calls “The Hacker Way.” Forbes’ Andy Greenberg made one of the first of what’s sure to be many comparisons between The Hacker Way and Google’s “Don’t Be Evil.” GigaOM’s Mathew Ingram took note of the grandiosity of Zuckerberg’s stated mission to rewire the world.

Two main questions emerged in commentary on the filing: How much is Facebook really worth? And what happens to Facebook now? To the first question, as The New York Times pointed out on the eve of Facebook’s filing, the company’s massive net worth is a stark indicator of the booming value of personal data collected online. The Columbia Journalism Review’s Ryan Chittum took the opposite tack, wondering why Facebook gets so little money out of each of its hundreds of millions of users before concluding that “Facebook is still a young business figuring out how to sell ads and figuring it how aggressive it can get without ticking off users.”

To the second question, Mathew Ingram noted that going public is usually a way for tech companies to get the financing they need to build up for some major growth — something Facebook has already done. So, he asked, is this just an attempt for Facebook’s employees and backers to cash out, and the end of the company’s most productive growth phase? Leaning on tech entrepreneurship leader John Battelle, Wired’s Tim Carmody and Mike Isaac reasoned that Facebook is mature enough already that in order to attain the growth it’s promising, it needs to be in the midst of some massive changes as a company. A couple of guesses at some of those specific changes: More ads and purchases of tech companies (Fast Company) and a big ramp-up in mobile ads (Marketing Land).

Murdoch’s candor amid scandal: The phone-hacking scandal at Rupert Murdoch’s News Corp. has continued to spread (rather quietly here in the States, but much more prominently in the U.K.), and it may have turned yet another corner with the arrest last weekend of four journalists from News Corp.’s Sun, significantly deepening the scandal beyond the now-defunct News of the World, where it began.

News Corp. has also turned over an enormous new trove of data which, along with the arrests, could begin to seriously threaten News Corp.’s other British newspapers, including the Times, according to the Guardian’s Nick Davies. British j-prof Roy Greenslade reported that many Sun staffers are worried that they may not be part of News Corp. much longer.

In the midst of all this, Murdoch’s feisty Twitter account continues unfettered, prompting praise from The New York Times’ David Carr for his refreshing candor. Mathew Ingram agreed that this “sources go direct” approach should be viewed as a boon, not a challenge, to serious journalism. The AP’s Jonathan Stray had perhaps the best summation of the relationship between sources using their own platforms and journalism: “When they want you to know, sources will go direct. When they don’t… that’s journalism.”

Reading roundup: It was a relatively quiet week outside of the big Twitter and Facebook stories, but there were still some cool nuggets to be found:

— Facebook’s relatively new Twitter-like Subscribe feature continues to draw complaints of rampant spam. Those criticisms have been led by Jim Romenesko, but this week the New York Daily News and Slate’s Katherine Goldstein chimed in, voicing concerns in particular about inappropriate comments directed toward women. Meanwhile, Mashable’s Todd Wasserman said Subscribe is ruining the News Feed.

— Big news in the journalism-academy world: Columbia and Stanford are teaming up to create a new Institute for Media Innovation, thanks to a $30 million gift from longtime Cosmopolitan editor Helen Gurley Brown.

— Jay Rosen posted an inspiring interview with the Chicago Tribune’s Tracy Samantha Schmidt, gleaning some useful insights on how to nurture an innovative and entrepreneurial spirit within a large organization, rather than a startup.

— Megan Garber of The Atlantic presented the results of a Hot or Not-style study that determined what type of Twitter content people like. Here’s what they don’t like: Old news, Twitter jargon, personal details, negativity, and lack of context.

Rupert Murdoch photo by David Shankbone and original Twitter bird by Matt Hamm used under a Creative Commons license.

July 12 2011


Yahoo prepares new ad network to deliver content personalized to sites

Wall Street Journal :: Digital media company Yahoo Inc. launches a new content and advertising network later this year. It will be a market offering for entertainment websites and popular blogs to install Yahoo software on their pages that would deliver "content personalized", articles and videos to visitors tailored to their personal interests to increase time-spend-on site. It will be an ad revenue share model. Ad networks typically take half the revenue, industry experts say.

Continue to read Amir Efrati, online.wsj.com

June 14 2011


Al-Jazeera English: "revenue is not a driving force right now"

AdAge :: Al-Jazeera English may be one of the only fast-growing networks that doesn't want to tell potential sponsors its growth story. The global news network has seen its profile escalate in recent months due to its leading coverage of major events such as the Japan earthquake and uprisings in the Middle East. Web visits in April 2011 surged past 66 million -- 42% from the U.S. -- and talks to expand its limited distribution in major territories such as the U.S., U.K. and India have accelerated.

Continue to read Andrew Hampp, adage.com

June 11 2011


Raju Narisetti, Washington Post: news brands, get more creative, engaging and useful

Forbes :: There has never been a better time to be a journalist for The Post, writes Raju Narisetti, Managing Editor, The Washington Post. In 2010, 29.3 million readers read some 270 million pages of Post journalism each month, a record for The Washington Post. Of that, 28.1 million did so online and, while The Post brought in 4.2 million new readers on average each month compared to the previous year, they also lost some 35,000 print subscribers in 2010 alone.

[Raju Narisetti:] Revenues from online advertising too haven't really caught up. Cost cutting and trying to make online readers pay, may not be the answer. The news brands need to get creative and make their content easier, more engaging and useful.

So, what's the big deal you might ask?


Continue to read Raju Narisetti, www.forbes.com

May 25 2011


Facts and figures - The New York Times's paywall

Business Insider :: The New York Times's paywall launch seems to be off to a fine start, with management proudly announcing 100,000 new web-only subscribers shortly after the launch. If each of those subscribers stick around and pay $15 a month, that's $18 million of high-margin annual revenue the company just added. If the company can grow the digital-only subscriber base to, say, 500,000, the impact will be a much more meaningful $90 million a year.

Continue to read Henry Blodget, www.businessinsider.com

January 12 2011


Advertising Resources for Local Sites: Ad Avengers

By Jennifer McFadden

Describe your product/service.
Ad Avengers helps advertisers and publishers connect directly. We also provide a listing and briefing process for the creative element of display advertising. Our experience has been that ad networks and ad exchanges overlook smaller publishers who have vibrant communities, so we help publishers monetize these communities and advertisers connect with these communities.

How can Ad Avengers help local publishers?
Local publishers have a problem because their audience numbers aren’t necessarily the right size for traditional ad networks and ad exchanges. On the opposite side of the equation, local advertisers have a problem finding publishers through large ad networks. We’re a marketplace that can connect advertisers and publishers on a local level.

How do you simplify the process of advertising online for local businesses?
We stay away from promising super-targeting and we don’t use traditional digital pricing (CPMs and CPCs). We focus instead on finding sponsorship opportunities for publishers and then provide retrospective CPCs to advertisers, but the real value is building a brand and supporting the (relatively) little guy.

Who is currently using your product?
We’re launching a trial with a couple of smaller publishers using the Moonfruit platform and other blogging/publishing tools. We’re UK-based but are also looking for US publishers and advertisers who would like to be part of our trial.

How can local publishers increase revenue on their sites?
Focus on your content and community and let a product like Ad Avengers help you monetize. The more content you build, the more interest you’ll get from users and from advertisers.

Who are your primary competitors? What value do you provide that makes Ad Avengers a better solution?
Our primary competitors are ad networks and ad exchanges. Google AdWords and other products can be a big beast to compete with. Our advantage is that we provide a service that helps the smaller publisher, which is a segment that often gets overlooked by the big players. We’re better because we’re leaner and are offering a service that will fit different publishers of different sizes rather than needing publishers to fit us.

What is your revenue model?
We take a commission on a successful sponsorship placement. The rate depends on how big and how valuable is the audience we’re supporting. With some publishers the revenue split is 80% to the publishers, 20% to us. In other cases, we’re taking a 5% commission.

How does a local site implement your products?
There’s two parts to implementation: helping us develop a publisher profile and inserting the ad code into your site to display the ads. We’re trying to make it as simple as possible and no more difficult then implementing a Google AdWords campaign.

What is your outlook for the local advertising marketplace over the next 2-5 years?
Local advertisers are moving more of their budgets away from traditional media and into online. Ad Avengers is hoping to help make this easier and more efficient for local advertisers.

What do you see as the biggest hurdle for local advertisers? How does Ad Avengers address this issue?
Finding the right publisher is definitely the biggest hurdle. Even if you are an expert at search and can find the right publisher, it’s difficult to contact the right person, discuss rates and content terms, and manage the process. Ad Avengers addresses this by making it transparent, showing an advertiser the rate, the audience, and excerpts of content to help answer the difficult questions right off the bat.

Ad Avengers
Farhan Lalji — farhan@adavengers.com
+44 7960 437 383
Twitter — @adavengers | @farhanlalji
Watch the Ad Avengers video.
See more advertising resources for local sites.


Advertising Resources for Local Sites: Adility

By Jennifer McFadden

Describe your product/service.
Adility is a hyperlocal distribution hub that connects online publishers and local advertisers in a way that enables local advertisers to promote local advertising content (coupons, daily deals and prepaid cards) to a publisher’s customers. Publishers benefit by providing their users with unique local commerce content thereby increasing retention, engagement, and revenue; and local advertisers benefit by driving new customers into their stores at a lower cost than traditional cpm based advertising. We provide everything a publisher needs to add a daily deal offering to their portfolio of products either through our white label daily deal site or our API.

How can Adility help local publishers?
Adility helps local publishers monetize their installed customer base through the offer of local deals from local merchants

How do you simplify the process of advertising online for local businesses?
We take the guesswork out of local advertising. A local merchant doesn’t pay until he/she gets a customer who has purchased a product. So the local merchant knows there is a direct relationship between the money spent and a customer acquired.

Who is currently using your product?
We provide deal aggregation services to more than 6,000 small businesses nationwide, and we distribute them across our network of publishers who in the aggregate generate more than 100MM Unique Visitors per month. We currently provide products and services to a variety of traditional and mobile publishers such as: Coupons.com, CBS Interactive, Interactive One, DailyDealster, Wegeo, and many others.

How can local publishers increase revenue on their sites?
Know your users. If you know your users well, you will know the types of deals that will appeal to them. Matching the right deals to the right customer certainly impacts conversion

Who are your primary competitors? What value do you provide that makes Adility a better solution?
We currently compete with the likes of NimbleCommerce, Group Commerce, and Tippr. Our biggest competitive advantage is that not only can we provide publishers with a custom white label site, but we can provide that publisher with unique local deals in the city of their choice. So, we can help that publisher drive revenue immediately on launching a daily deal product on their site. Our competitors offer a software solution but no deals.

What is your revenue model?
We derive our revenue from sharing revenues with the publisher. We generally split net revenue with our publishers 50/50.

How does a local site implement your products?
Creating a turnkey white label solution is very easy and generally takes around 2 weeks. Using our API is even easier and we can get a publisher up and running using our API platform in several days.

What is your outlook for the local advertising marketplace over the next 2-5 years?
CPC based advertising will take significant market share from CPM based brand advertising where small businesses and local merchants are concerned. The simplicity and accountability of CPC based advertising makes it an ideal product for small businesses and local merchants that don’t have large advertising budgets.

Do you have any new products in your pipeline that will serve the needs of local publishers?
Our white label and API products are designed to help local publishers monetize their customers.
What do you see as the biggest hurdle for local advertisers? How does Adility address this issue?
The biggest problem for local advertisers is the ability to aggregate large audiences for their messages at a reasonable cost. Until Groupon came along, local advertisers had very limited options in using the power of the Internet to aggregate large audiences. Groupon and sites like Groupon have shown that there are sustainable business models that allow local merchants to aggregate scalable audiences at low cost.

What sites do you think are effectively targeting and reaching the local market?
I think that Groupon has done a great job in illuminating a business model that helps small businesses advertise their products. I think the market will evolve over time and there are ways in which they can improve but as the market leader, they’ve done a good job.

Courtney Williams — courtney@adility.com
See more advertising resources for local sites.


Advertising Resources for Local Sites: InstiAds

By Jennifer McFadden

Describe your product/service.
InstiAds is an easy-to-use, self-serve ad buying and management toolset that can be used on any platform. It was designed especially for small and local businesses.

How can Instiads help local publishers?
The cost of advertising sales is extremely prohibitive to local publishers, which are often small, extremely focused operations. Instiads makes it possible for a one or two-person team to generate sales, manage advertiser campaigns, and handle billing while continuing to run the day-to-day content and news-gathering operations. Self-serve isn’t magic – there are still *plenty* of opportunities to talk directly with your advertisers – but it reduces the cost of sales to a sustainable level. We also have engineered our service to be extremely network friendly. In fact, you could use Instiads to build an advertising network in a very short time.

How do you simplify the process of advertising online for local businesses?
The simplest way for a local business to buy an ad would be for them to call up the local publisher, talk through a rate card, and hand over a credit card number. We’re not that simple! But we do turn the transaction of buying an ad into a step-by-step process that leads a local business advertiser from a menu of available inventory right through the creation of an ad using an image provided by the advertiser. Our goal was to make it no more complicated to buy an ad on a local blog than it *used to be* to buy an ad via Google AdWords. Google has since made many changes that cater more to big agencies than small and local businesses. This has over-complicated the transaction process.

Who is currently using your product?
Our biggest success has been the deployment of Instiads to create the Seattle Indie Ad Network. More than twenty Seattle area news sites and local blogs, using a variety of publishing platforms, have created a combined inventory pool that allows Seattle advertisers to reach a substantial local audience. Some of the sites include: Pubicola, My Green Lake, Wallyhood, and Seattle Transit Blog.

How can local publishers increase revenue on their sites?
First: Optimize your own inventory and use an ad-serving technology capable of advanced serving, even if you sell only flat-rate placements. Join and create networks.

Second: Join and create networks. Creating a secondary flow of revenue – especially one that is traffic sensitive, i.e., you make more when you have more visitors – is one of the few opportunities we’ve seen work beyond the first tier of simply selling your own site inventory.

Who are your primary competitors? What value do you provide that makes
Instiads a better solution?

OpenX and Google Ad Manager are widely used. Of the two, we’re most similar to Ad Manager, although that system does none of the self-serve on the buy side (yet!) that we do. We’re a much simpler “installation” than OpenX – our system isn’t about massive amounts of flexibility and integration with back-end coding, etc. We’re a service – if you want Instiads on your site, you create an account, set up a couple inventory positions, and add the javascript widgets to your site template where you want the ad to appear.

What is your revenue model?
We share revenue on any credit card transactions in the system – our share is 20 percent. Revenue shares are a funny thing when you’re talking local publishing. I talk to a lot of people worried about 20 percent of zero. I understand it. From what I’ve seen, though, you have to have a solution more advanced than sticking a bunch of graphics in a page and then trying to collect checks. You don’t have to use Instiads, but we think the value is a fair trade and, frankly, we’ve pounded it down as low as possible to the point where the share is mostly about covering credit card transaction costs and technology fees for serving.

How does a local site implement your products?
Sign up here, create some ad positions, cut and paste the javascript widgets in your site template, profit.

What is your outlook for the local advertising marketplace over the next 2-5 years?
There remains a massive underserved market of businesses that “don’t advertise” – we think one of the biggest reasons they don’t is because there really haven’t been a lot of sites that have good ROI for the locals. As new sites and services are created to give local advertisers a good audience to reach, we think that will drive growth. Not just display advertising, but every type of marketing – even search.

We’re also seeing a mashing together of social media and display advertising that attracts local advertisers. The social media appeal is obvious – it’s relatively affordable. The display component comes in both to augment their decision to commit to a social media effort and, interestingly, to better surface things like Facebook and Twitter accounts. We assume there will be more and more self-serve paid promotion type opportunities in the social media space. We think this will help create more advertisers out of the “don’t advertise” mass.

Finally, self-serve is bigger than most people think. There is always going to be a barrier to a local business owner spending the time and effort to learn how to use online advertising tools. But as more and more systems become accessible, we’re seeing smaller and smaller “agencies” – probably better to start calling them agents. These agents will have the same needs as big agencies and the tools will eventually scale down to serve them. In the meantime, there will be lots of manual, sloppy display purchasing. Eventually, targeting and the like will scale down to the local agent/social media expert level. But self-serve abilities will be at the core of this scaling down. It’s really important and I’d be skeptical of any large players who don’t move quickly to make self-serve the model for how their ad buying and management operates.

We also see the growth of group buying services.

What do you see as the biggest hurdle for local advertisers? How does Instiads address this issue?
The biggest hurdle for a small business is knowing how much to spend on advertising. Since Instiads offloads the technical and business processes from the publisher, we can help them attract more local ad dollars by allowing them to keep their ad rates lower.

What sites do you think are effectively targeting and reaching the local market?
There are 2,002: a couple thousand independent news sites that I’ve never even heard of. Plus Twitter and Facebook.

Justin Carder — justin@instivate.com
See more advertising resources for local sites.


Advertising Resources for Local Sites: isocket

By Jennifer McFadden

Describe your product/service.
isocket helps websites sell their own ads directly to advertisers. The seller/website can package their ads they way they want to, with their own rules and pricing. We offer a clean interface for buyers to easily purchase ad campaigns and for sites and bloggers to manage those campaigns. We take care of all the painful parts: invoices, payments, ad serving, statistics, scheduling, etc.

How can isocket help local publishers?
Local media shouldn’t have to think small just because they are small. Ad networks alone often don’t cut it. Even though local advertisers are buying less radio and newspaper ads, they still want to reach local people. Local websites and blogs are the way to do it – so we give them the tools to go from stuck-with-AdSense to a hyperlocal ad-selling machine.

How do you simplify the process of advertising online for local businesses?
The key to local ad sales is simplicity. People don’t want to jump through hoops to buy a $100 monthly sponsorship, or to learn how complicated ad-targeting exchanges work. We make the process as painless as possible.

Who is currently using your product?
Check out TechCrunch. They were our first customer and are one of the largest technology news sites in the world. We’ve also been working with a few Brooklyn-based bloggers during our beta. These are some of the amazing sites:
Brooklyn Heights Blog

How can local publishers increase revenue on their sites?
• Think of selling your own ads like you’re opening up a local retail store. You have a store where you want to sell products to customers. That means promotion, relationships, money, etc.
• If you’re new to direct sales, it can take a while to ramp up. Again, your store doesn’t turn a profit on opening day.
• Don’t overprice your inventory. Focus on pipeline, then raise the prices to an equilibrium.
• Promote!!! How will anyone buy from your store if they don’t know you’re open for business?

Who are your primary competitors? What value do you provide that makes Isocket a better solution?
In terms of similar tools for hyperlocal, the biggest competitor is actually “paper and pencil.” Many publishers use a combo of email, a spreadsheet, PayPal, and maybe an ad server. The status quo needs to change!

What is your revenue model?
The revenue share is a whopping 0%! isocket was the first commission-free ad platform. Publishers pay a flat monthly fee based on how large they are. For example, you can serve 1 million ad impressions per month for $49.

How does a local site implement your products?
We strive to make it as simple as possible, but it’s by nature not something that’s ready to go in 5 minutes. For example, you need to configure your ad packages and set the pricing. It can take 30 to 60 minutes to get out the door, but we’re always here to help.

What is your outlook for the local advertising marketplace over the next 2-5 years?
Maturing, hopefully. Advertisers want to reach these audiences in a meaningful way – it’s just too hard and inefficient to do so right now. The local ad industry will flourish when the transactional friction drops and the quality of inventory rises.

What do you see as the biggest hurdle for local advertisers? How does Isocket address this issue?
Local advertisers need an easy way to buy. They are used to the behavior of calling up their local radio station and saying “Hey Joe, put me down for another $5,000 this week.” They need it to be that simple for buying an ad online.

What sites do you think are effectively targeting and reaching the local market?
Brooklyn Heights Blog has run a prodigious number of ad orders through our system. The site has a combination of a well-known blog and an easy-to-manage interface (via isocket). They also put an incredible amount energy toward contacting advertisers to buy on the site.

Jason Chen – hello@isocket.com
See more advertising resources for local sites.


Advertising Resources for Local Sites: PaperG

By Jennifer McFadden

Describe your product/service.
Flyerboard is a virtual bulletin board for local publishers to show interactive local ads made from flyers, posters, or other print ads.

How can PaperG help local publishers?
The Flyerboard can enable publishers and their sales reps to easily display local ads made from existing print creatives. The simple interface makes ad serving, management, and selling extraordinarily easy.

How do you simplify the process of advertising online for local businesses?
Flyerboard only requires you have stuff you already have like a flyer. It makes ad space available on a fixed price basis so local advertisers and sales reps understand the pricing and value easily. It also reduces the complexity of online ad serving.

Who is currently using your product?
Hearst, Gannett, McClatchy, Chron.com, Boston.com, New Haven Independent and many other local publishers use our product.

How can local publishers increase revenue on their sites?
They need to be proactive and go out and sell. Being aggressive in sales is critical.

Who are your primary competitors? What value do you provide that makes PaperG a better solution?
Legacy print-to-web systems providers like Travidia are the primary competitors to Flyerboard. Our system is designed to support premium ad units and not simply take print materials and bring them online. It’s built around delivering real value to the publisher and advertisers by powering premium ad units.

What is your revenue model?
We do a revenue share depending on volume with publishers getting 70-80% and PaperG receiving 20-30%.

How does a local site implement your products?
It’s very easy to implement once an account is set up. You just use the interface to specify what size ad unit you want, what pricing, and what type of ads – then you get code to copy and paste onto your site. It takes a couple of minutes to get started.

What is your outlook for the local advertising marketplace over the next 2-5 years?
It is going to get bigger and more competitive. Being able to reduce the complexity of local online advertising will be the key to success.

Do you have any new products in your pipeline that will serve the needs
of local publishers?

PlaceLocal is an ad technology that makes display ad creation as easy as typing a business name and address into the program.

What do you see as the biggest hurdle for local advertisers? How does PaperG address this issue?
When local advertisers don’t understand the pricing or don’t have a creative ready to go, then sales come to a stop. We built our system to be simple and easy to get started with existing print creative material.

What sites do you think are effectively targeting and reaching the local market?
New Haven Independent has done a great job. The site has a high penetration of local readership and its ability to attract advertisers and get them to respond is very strong.

Victor Wong — victor.wong@paperg.com
See more advertising resources for local sites.


Advertising Resources for Local Sites: Shoutback

By Jennifer McFadden

Describe your product/service.
We provide a white label (private branded) Daily Deal application.

How can Shoutback help local publishers?
We primarily assist publishers by bringing incremental revenue along with new clients.

How do you simplify the process of advertising online for local businesses?
Our automated process allows for custom look and feel while sharing best practices.

Who is currently using your product?
We have numerous media partners ranging from Gannett, Media News Group, Media General, Hearst, Scripps, and others. For a sample site, please look at Sign on San Diego.

How can local publishers increase revenue on their sites?
Analytics and account management assure the best possible chance for success in the market, along with consistency of a definitive marketing plan

What is your revenue model?
There is no upfront cost. Our revenue is dependent on the success of the product.

How does a local site implement your products?
We have adapted best practices to the site in terms of development and usage so implementation takes very little time.

What is your outlook for the local advertising marketplace over the next 2-5 years?
Flash marketing has gone mainstream and is expected to be an integral marketing tool for local advertisers into the future.

What do you see as the biggest hurdle for local advertisers? How does Shoutback address this issue?
Minimize risk and increase their social media exposure. Our platform is a wonderful tool that accomplishes both of those objectives.

Robert Scher — rscher@shoutback.com
See more advertising resources for local sites.


Advertising Resources for Local Sites: Trafficspaces

By Jennifer McFadden

Describe your product/service.
Our primary product is the Trafficspaces – a self-service ad management tool. Take a look at our demo.

How can Trafficspaces help local publishers?
Each publisher gets its own Ad Store, which is dedicated ad management site. A publisher’s Ad Store
• allows advertisers to buy ads directly from publishers instead of going through middlemen, thereby helping the publisher save costs;
• gives publishers more control over ad quality, reducing the number of irrelevant ads on their sites;
• features a simple interface that lets local advertisers to get started very quickly.

How do you simplify the process of advertising online for local businesses?
Our system makes advertising simple by:
• reducing the number of steps it takes to get started;
• providing ad templates so that local advertisers can customize great ads with their own text and logo;
• allowing advertisers to purchase on a pay-per-day/month basis in addition to CPM and CPC pricing, which is easier to understand for some advertisers

Who is currently using your product?
Current clients include:
County Parents
New Internationalist
News Cloud
Three Sheets North West

How can local publishers increase revenue on their sites?
• Provide online, self-service ad sales. Don’t insist that advertisers call or email before they get started.
• Simplify your pricing model. Use pay-per-day/month instead of CPM.
• Promote your self-service Ad Store with coupons.

Who are your primary competitors? What value do you provide that makes Trafficspaces a better solution?
Our primary competitors include AdReady, Google Ad Manager, and OpenX. Our key value is that our system is designed primarily around the needs of the advertisers rather than technical administrators. As a result, the user experience is powerfully simple.

Publishers need to provide better geo-targeting and interest-targeting for advertisers. With Trafficspaces, publishers can do just that – help their advertisers target their ads very accurately and improve their return on investment.

What is your revenue model?
We charge a flat monthly fee that starts at $19.99.

How does a local site implement your products?
Integration is as simple as dropping a piece of JavaScript into the publisher’s site. We also have a WordPress plugin that makes it even simpler. The whole process can be completed in less than 10 minutes.

What is your outlook for the local advertising marketplace over the next 2-5 years?
I believe that more local sites will be accessed through mobile devices so it’s going to be important to make sure that local sites are optimized for mobile access and they can serve ads based on a user’s proximity to a location.

Do you have any new products in your pipeline that will serve the needs
of local publishers?

We are working on a marketplace/directory that will list Ad Stores from multiple local publishers and help to drive advertisers to their sites.

What do you see as the biggest hurdle for local advertisers? How does Trafficspaces address this issue?
The biggest hurdle is getting a positive Return on Investment on their ad campaigns. If they spend a $1000 on a local site and get no boost in sales then, needless to say, they won’t be spending any more. To solve this problem, we work with publishers to improve the quality of their ad targeting so that local ads are only shown to relevant audiences.

What sites do you think are effectively targeting and reaching the local market?
PlentyOfFish, the online dating site, is killing it right now with their targeted advertising system. They have a wealth of information about their members, which they use to create both better matches and serve more targeted and relevant localized ads.

Niyi Gbodimowo — niyi@trafficspaces.com
See more advertising resources for local sites.


Advertising Resources for Local Sites

When it comes to selling ads, managing inventory, or helping local businesses create online advertising campaigns, most local sites readily admit they need all the help they can get. And while there is no secret sauce that magically increases revenue, a number of new companies have emerged to provide a variety of advertising solutions for small publishers. The following series profiles some of the latest entrants into the local online advertising space, including Ad Avengers, Adility, InstiAds, isocket, PaperG, Shoutback, and Trafficspaces.

The lineup of companies presented here is by no means comprehensive, nor is it an endorsement of their products and services. Our goal is to create a conversation around the new tools that are available to local sites. Let us know what’s working for you. Thanks to all the folks who were interviewed. We appreciate your time.

December 22 2010


Keeping Martin honest: Checking on Langeveld’s predictions for 2010

Editor’s Note: This year, we’re running lots of predictions of what 2011 will bring for journalism. But our friend Martin Langeveld has been sharing his predictions for the new-media world for a couple of years now.

In the spirit of accountability, we think it’s important to check back and see how those predictions fared. We did it last year, checking in on his 2009 predictions. And now we’ll check in on 2010.

Check in next year around this time as we look back at all the predictions for 2011 and how they turned out.

Newspaper ad revenue

PREDICTION: At least technically, the recession is over, with GDP growth measured at 2.8 percent in Q3 of 2009 and widely forecast in Q4 to exceed that rate. But newspaper revenue has not followed suit, dropping 28 percent in Q3. McClatchy and the New York Times Company (which both came in at about that level in Q3) hinted last week that Q4 would be better, in the negative low-to-mid 20 percent range. This is not unexpected — in the last few recessions with actual GDP contraction (1990-91 and 2001), newspaper revenue remained in negative territory for at least two quarters after the GDP returned to growth. But the newspaper dip has been bigger each time, and the current slide started (without precedent) a year and a half before the recession did, with a cumulative revenue loss of nearly 50 percent. Newspaper revenue has never grown by much more than 10 percent (year over year) in any one quarter, so no real recovery is likely. This is a permanently downsized industry. My call for revenue by quarter (including online revenue) during 2010 is: -11%, -10%, -6%, -2%.

REALITY: CLOSE, ONE CIGAR. Actuals for Q1, 2, and 3: -9.70%, -5.55%, – 5.39%. And Q4, while not a winner, will probably be “better” than Q3 (that is, another quarter of “moderating declines” in news chain boardroom-speak). So, a win on the trendline, and pretty close on the numbers.

Newspaper online revenue

PREDICTION: Newspaper online revenue will be the only bright spot, breaking even in Q1 and ramping up to 15% growth by Q4.

REALITY: CLOSE, ONE CIGAR. Actuals for Q1, 2, and 3: +4.90%, +13.90%, and +10.7%. Since Q1 beat my prediction and was the first positive result in eight quarters, I’d say that’s a win, and pretty close on the ramp-up, so far. Q4 might hit that 15%.

Newspaper circulation revenue

PREDICTION: Newspaper circulation revenue will grow, because publishers are realizing that print is now a niche they can and should charge for, rather than trying to keep marginal subscribers with non-stop discounting. But this means circulation will continue to drop. In 2009, we saw a drop of 7.1% in the 6-month period ending March 31, and a drop of 10.6 percent for the period ending Sept. 30. In 2010, we’ll see a losses of at lest 7.5% in each period.

REALITY: HALF A CIGAR. Actual drop in the March 31 period was 8.7%; actual drop in the Sept. 30 period was 5.0%. So, half a win here.

Newspaper bankruptcies

PREDICTION: I don’t think we’re out of the woods, or off the courthouse steps, although the newspaper bankruptcy flurry in 2009 was in the first half of the year. The trouble is the above-mentioned revenue decline. If it continues at double-digit rates, several companies will hit the wall, where they have no capital or credit resources left and where a “restructuring” is preferable and probably more strategic than continuing to slash expenses to match revenue losses. So I will predict at least one bankruptcy of a major newspaper company. In fact, let’s make that at least two.

REALITY: CORRECT — TWO CIGARS. Well, MediaNews Group filed its strategic bankruptcy in January, as did Morris Publishing. So this was a quick win. Canwest Ltd. Partnership, publisher of 12 Canadian papers, filed in January as well.

Newspaper closings and publishing frequency reductions

PREDICTION: Yup, there will be closings and frequency reductions. Those revenue and circulation declines will hit harder in some places than others, forcing more extinction than we saw in 2009.

REALITY: WRONG. Nope, everybody managed to hang on, nobody of any size closed.


PREDICTION: It’s interesting that we saw very little M&A activity in 2009 — none of the players saw much opportunity to gain by consolidation. They all just hunkered down waiting for the recession to end. It has ended, but if my prediction is right and revenue doesn’t turn up or at least flatten by Q2, the urge to merge or otherwise restructure will set in. Expect to see at least a few fairly big newspaper firms merge or be acquired by other media outfits. (But, as in 2009, don’t expect Google to buy the New York Times or any other print media.)

REALITY: WRONG. Google didn’t buy the Times or any other newspaper, but by the same token, there were no significant mergers or acquisitions all year. So much for Dean Singleton’s promise of “consolidation” in the industry after MediaNews emerged from its quick bankruptcy.


PREDICTION: Given the fact that newspaper stocks generally outperformed the market (see my previous post), it’s not surprising that there were few changes in the executive suites. But if the industry continues to contract, those stock prices will head back down. Don’t be surprised to see some boards turn to new talent. If they do, they’ll bring in specialists from outside the industry good at creative downsizing and reinvention of business models. Sooner would be better than later, in some cases.

REALITY: NOT FLAT WRONG, BUT NOT CLOSE. Perhaps the closest any company came to truly shaking things up was Journal Register Company, which in January appointed as its CEO John Paton, an executive with experience in Hispanic media. He’s not an outsider, but he’s preaching a very different gospel that includes a clear vision for a web-based future for news. Elsewhere, Tribune, still dealing with bankruptcy, tossed CEO Randy Michaels, not for strategic reasons but because accusations of sexism and other dumb behavior were “tarnishing” the company’s name.


PREDICTION: There will be more and more launches of online and online/print combos focused on covering towns, neighborhoods, cities and regions, with both for-profit and nonprofit bizmods. Startups and major media firms looking to enter this “space” with standardized and mechanized approaches won’t do nearly as well as one-off ventures where real people take a risk, start a site, cover their market like a blanket, create a brand and sell themselves to local advertisers.

REALITY: CORRECT. This is happening in spades. AOL’s Patch launched hundreds of sites. It may be a “standardized” approach, but it’s not “mechanized,” and hired more journalists than any company has in decades. At the same time, one-off ventures continue to sprout in towns and cities everywhere.

Paid content

PREDICTION: At the end of 2008, this wasn’t yet much of a discussion topic. It became the obsession of 2009, but the year is ending with few actual moves toward full paywalls or more nuanced models. Steve Brill’s Journalism Online promises a beta rollout soon and claims a client list numbering well over 1000 publications. Those are not commitments to use JO’s system — rather, they’re signatories to a non-binding letter of intent that gives them access to some of the findings from JO’s beta test. Many publishers, including many who have signed that letter, remain firmly on the sidelines, realizing that they have little content that’s unique or valuable enough to readers to charge for. JO itself has not speculated what kind of content might garner reader revenue, although its founders have been clear that they’re not recommending across-the-board paywalls. So where are we heading in 2010? My predictions are that by the end of the year, most daily papers will still be publishing the vast majority of their content free on the Web; that most of those experimenting with pay systems will be disappointed; and that the few broad paywalls in place now at local and regional dailies will prove of no value in stemming print circulation declines.

REALITY: CORRECT. Most papers are still publishing the vast majority of their content free on the web. ALSO CORRECT: Broad paywalls have done little to stem the decline in print. JURY STILL OUT: But it’s too soon to tell whether those experimenting with paywalls are disappointed. All eyes are on the impending paywall start at the New York Times.


PREDICTION: The recently announced consortium led by Time Inc. to publish magazine and (eventually) newspaper content on tablets and other platforms will see the first fruits of its efforts late in the year as Apple and several others unveil tablet devices — essentially oversized iPhones that don’t make phone calls but have 10-inch screens and make great color readers. Expect pricing in the $500 ballpark plus a data plan, which could include a selection of magazine subscriptions (sort of like channels in cable packages, but with more a la carte choice). If newspapers are on the ball, they can join Time’s consortium and be part of the plan. Tablet sales will put a pretty good dent in Kindle sales. One wish/hope for the (as yet un-named) publisher consortium: atomize the content and let me pick individual articles — don’t force me to subscribe to a magazine or buy a whole copy. In other words, don’t attempt to replicate the print model on a tablet.

REALITY: CORRECT, MORE CIGARS. My iPad description and data plan price point were right on the mark. It’s hard to say for sure whether iPad sales have put much of a dent in Kindle sales, since Amazon doesn’t release numbers, but Kindle sales are way up after a price cut. The magazine consortium, now called Next Issue Media, still has no retail product, but it does look like it intends to “replicate the print model on a tablet” rather than recognizing atomization. Meanwhile, the Associated Press is recognizing atomization with its plan for a rights clearinghouse for news content.

Social networks

PREDICTION: Twitter usage will continue to be flat (it has lost traffic slowly but steadily since summer). Facebook will continue to grow internationally but is probably close to maxing out in the U.S. With Facebook now cash-flow positive, and Twitter still essentially revenue-less, could Zuckerberg and Evan Williams be holding deal talks sometime during the year? It wouldn’t surprise me.

REALITY: WRONG, MOSTLY. Twitter is still fairly flat in web traffic, but it’s growing via mobile and Twitter clients, so its real traffic is hard to gauge. No talks between Twitter and Facebook, though.


PREDICTION: The Federal Trade Commission will recommend to Congress a new set of online privacy initiatives requiring clearer “opt-in” provisions governing how personal information of Web users may be used for things like targeting ads and content. Anticipating this, Facebook, Google and others will continue to maneuver to lock consumers into opt-in settings that allow broad use of personal data without having to ask consumers to reset their preferences in response to the legislation. In the end, Congress will dither but not pass a major overhaul of privacy regs.

REALITY: CORRECT. Indeed, we don’t have any major overhaul by Congress, but we’re actually seeing more responsible behavior from all of the big players with regard to privacy, including better user controls on privacy just announced by Microsoft.


PREDICTION (with thanks to Art Howe of Verve Wireless): By the end of 2010 a huge shift toward mobile consumption of news will be evident. In 2009, mobile news was just getting on the radar screen, but during the year several million people downloaded the AP’s mobile app to their iPhones, and several million more adopted apps from individual publishers. By the end of 2010, with many more smartphone users, news apps will find tens of millions of new users (Art might project 100 million), and that’s with tablets just appearing on the playing field. During 2009, Web readership of news (though not of newspaper content) overtook news in printed newspapers. Looking out to sometime in 2011 or 2012, more people will get their news from a mobile device than from a desktop or laptop, and news in print will be left completely in the dust.

REALITY: JURY STILL OUT, BUT LOOKING CORRECT. To my knowledge, nobody has a handle on how many news apps have been sold or downloaded, but certainly it’s in the tens of millions, counting both smartphone and tablet apps. One the other hand, a lot of people with apps on their phones don’t use them. As to where mobile ranks among news delivery media, the surveys haven’t picked up the trends yet, but wait till next year.


PREDICTION: I accurately predicted the Dow’s rise during 2009 and that newspaper stocks would beat the market (see previous post), but neglected to place a bet on the market for 2010, so here goes: The Dow will rise by 8% (from its Dec. 31 close), but newspaper stocks will sink as revenue fails to rebound quarter after quarter.

REALITY: ON THE MONEY. As of mid-afternoon December 15, the Dow is up 10.19% for the year, so I claim a win on that score. The S&P 500 is up 11.11%, and the NASDAQ is up 15.63%. Among newspaper groups, McClatchy (up 33%), Journal Communications (up 26%) and E.W. Scripps (up 44%) handily beat the market, but all the other players indeed sank or underperformed the market: New York Times Company is down 23%, News Corp. is up 5%, Lee Enterprises is down 30 percent, Media General is down 30% and Gannett is up 4%.

October 28 2010


Engagement: Where does revenue fit in the equation?

Our post earlier this week about philly.com’s seven-part equation to measure user engagement has sparked a lively debate in the comments. The central question: Should a news site’s engagement equation factor in revenue? If so, how?

To recap, Philly.com’s equation puts a numerical value on user engagement by calculating what percentage of the site’s users fulfill certain criteria, including viewing multiple pages, spending more than six minutes on the site, leaving comments, sharing content through social media, or returning regularly. The equation allows philly.com to track how the site is doing in terms of these individual categories of engagement, as well as averaging them out to obtain an overall engagement percentage.

But several people, starting with Sonia Meisenheimer of the St. Petersburg Times in the post itself, questioned the usefulness of an equation that doesn’t take into account how user behavior affects the news organization’s bottom line. Ravi Pathak propsed adding revenue as a coefficient, and Ophir Prusak suggested that factoring in banner-ad clickthrough rates might be a good way to do this. Jim Novo put a different spin on the question, asking:

Another way to say this: does it matter more to you what kind of content engaged visitors in the past, or what kind of content attracts visitors who are likely to remain engaged in the future?

He suggested focusing exclusively on “recency,” or the likelihood that a user will visit the site again, as an engagement metric that speaks more directly to revenue.

But Eric T. Peterson, the author of the white paper upon which philly.com’s engagement equation was based, jumped in to defend the idea of keeping revenue calculations separate from engagement:

Even in the media and publishing model, engagement and revenue are different aspects of consumer behavior. A consumer can be very engaged with your site but not be tremendously profitable…but you still want a way to measure their engagement independent of profit. Same for satisfaction and engagement — they are different aspects of the consumer experience…Work to understand what my (or any) engagement metric can tell you about your audience first, then go looking for the relationship between engagement and money.

More than a dozen people have chimed in on the issue, and the debate is still going on. You can read the full thread here.

October 18 2010


Move over, LiLo! Public-interest news can be more valuable to publishers than traffic bait

Conventional wisdom: What people really want from their journalism is some combination of celebrity gossip, naked celebrities, and gossip about naked celebrities. That may be a slight exaggeration, but it’s more than an assumption: Through the magic of web analytics, news publishers have access as never before to the collective Id of the people they serve…and again and again, such lowbrow fare as LiLo’s legal troubles and Favre’s photographic adventures rack up the pageviews, while their less sensational counterparts are rewarded for their dignity by being left alone. The more high-minded journalism — the public-interest investigations, the news about the economy and public policy — is still valuable, of course. But it’s also, we’ve assumed, a loss leader.

A study released today provides a hopeful counterpoint to all that (hopeful, that is, if you’re not Lindsay Lohan): For publishers, hard-news-focused, public-interest-oriented reporting might actually be more valuable than celebrity gossip and similarly LiLotastic fare. And not just in a good-for-democracy sense, but in a bottom-line sense. Perfect Market, a firm aimed at helping publishers maximize online revenue from their content, tracked more than 15 million news articles from 21 of its client news sites — including those of the Los Angeles Times, San Francisco Chronicle, and Chicago Tribune — from June 22 to September 21 of this year. And it found that, while the Lohan sentencing and other celebrity coverage drove significant online traffic, articles about public-interest topics — unemployment benefits, the Gulf oil spill, mortgage rates, etc. — were the top-earning news topics of the summer. The latter stories offered their publishers, overall, more advertising revenue per page view (which is to say: more bang for their advertising buck) than their fluffy counterparts.

The caveat: Perfect Market has a vested interest in the financial viability of quality content. (“At Perfect Market we believe that content matters,” the firm says in its press release. “By delivering the right content in the right format to the right user with the right relevancy, Perfect Market has increased the revenue for partners in our program by at least 20-fold.”) That said, though, the study’s holistic scope — moving beyond pageviews to focus on revenue — is an instructive approach. Traffic is notoriously fuzzy as a metric; it’s also notoriously stingy when it comes to return-on-investment. (Take The Huffington Post, which, for all its skill — PHOTOS! VIDEO! SLIDESHOW! — at leveraging our love of scandal, and for all the traffic it brings to its site, has struggled with profitability.)

For publishers struggling to sustain their operations, let alone grow them, it’s revenue that matters. And in Perfect Market’s study, via context-optimized advertising, it was consumer interest — not the casual variety that leads to quick headline-views, but the more engaged variety that leads to high time-on-site numbers and increased chances of ad clicks — that translated to revenue. Articles about social security were the most valuable to news publishers, the analysis found, generating an average of $129 in revenue for every thousand pageviews. Articles about mortgage rates were next, at $93 for every thousand views, followed by Gulf recovery jobs ($34 for every thousand).

LiLo, on the other hand? She generated only $2.50 for every 1,000 pageviews.

(It’s worth noting that the high-paying topics are united less by their hard-news nature than by their proximity to companies interested in hawking their wares. Immigration lawyers want their ads next to immigration stories; mortgage brokers and “Refinance now!” types want to be next to mortgage-rate stories; job sites want their ads on those Gulf-recovery-jobs stories. That makes sense, but it doesn’t do much for the sea of worthy news stories that won’t have an easy e-commerce hook. There aren’t many good contextual ads for Lohan court stories, but there also aren’t many for corruption investigations.)

We talk about the convergence of mediums: TV and print products and the web, video and text and multimedia, collapsing into one mega-medium. What the Perfect Market study suggests, though, is that there’s another type of convergence we would do well to cultivate: the conflation of editorial content and commercial. Earlier this year, Ken Doctor compared the revenues per unique user at the HuffPo and The New York Times; he estimated that, while the Times brought in $1 per unique user per month, the HuffPo brought in only 12 cents per user. And he attributed the discrepancy in large part to the Times’ advertising savvy: Its longtime presence in the ad-sales business means that it “owns key agency relationships.” It’s able to invest in making its ads contextually relevant to its content and, thus, to its users: AdSense, writ large. None of that is to say that the old church/state wall that has separated ads from journalism should be allowed to crumble; it is to say, though, that engagement may be just as important to news sites’ commercial content as to their editorial.

Image by Globovision used under a Creative Commons License.

September 20 2010


A warning to nonprofit news organizations: Government funding may not boost the bottom line much

At a time when some Americans are talking about increasing government support for journalism, here’s an interesting new study that adds a useful data point to the discussion: When governments provide financial support to nonprofit organizations, 73 percent of the extra money is counterbalanced by a decline in support from private donors. In other words, the value of government money received is decreased by a reduction in funds from elsewhere.

The paper is by Jim Andreoni of UC San Diego and A. Abigail Payne of Canada’s McMaster University, and it examines over 8,000 nonprofit organizations. The idea that government funding reduces private giving is not new, but this paper attempts to figure out why — and how — the trade-off occurs. Is it because private donors think that government grants eliminate their own need to give — the idea that they “already gave at the office” through their tax dollars? Or is it because getting government money causes nonprofits to relax, to reduce how aggressively they pursue outside money through fundraising?

Andreoni and Payne come down squarely on the side of the latter — it’s primarily nonprofits’ own reduction of their own fundraising efforts that lead to less outside support, not any change of heart by donors. When the government gives, nonprofits take that as an opportunity to cut back on fundraising, even though fundraising is highly cost-effective; the paper finds an average $5 return in gifts for every $1 spent on raising money. Reducing fundraising may save some cash in the short term, but it doesn’t appear to be a smart strategy.

If charity managers find fund-raising a “necessary evil,” or fear it may hurt their evaluation from charity watchdog groups, then a government grant will allow them to redirect efforts from fund-raising to providing charitable services. This means that after getting a grant, charities may simply cut back fund-raising.

The paper finds that for every $1,000 given through a government grant, nonprofits reduce their spending on fundraising by an average of $137. But that decrease leads to a drop of $772 in donor gifts. (The paper found that, contrary to the fears of some, government grants encourage outside donors to give instead of discouraging them — but the impact is small, only about $45 per $1,000 in government grants.)

In other words, adding it all together, $1,000 in government money only nets out to $410 in the end, on average.

The study didn’t look specifically at nonprofits engaged in journalism, and it’s difficult to apply its findings directly to the ongoing debate over government support for news. Check out the full paper for much more detail. But if I were in charge of a nonprofit news organization, here’s what I’d take away from Andreoni and Payne:

Government help is not a cure-all. Even setting aside the very legitimate arguments over the wisdom or ethics of government support for news, it doesn’t appear to be quite the financial boon some are foreseeing, at least for nonprofit organizations more broadly.

Fundraising is worth investing in. Andreoni and Payne say it’s surprising to economists that $1 spent on fundraising could lead to $5 in revenue, but it’s a robust finding that lines up with what the industry reports internally. They also point out that not every nonprofit approaches fundraising with the same sort of enthusiasm (the “necessarily evil”); those who find the task distasteful will pay for it in the pocketbook.

Success in one source of revenue can’t lead to the abandonment of others. The smartest nonprofit news organizations are busy trying to build a multi-pronged model for financial sustainability — often blending advertising, sponsorship, small individual donors, money from big foundations, content-sharing alliances, and more. Over-reliance on any one source is dangerous; just ask the publisher of a major metro newspaper about classified advertising circa 1995.

Photo by Thomas Hawk used under a Creative Commons license.

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