Modernize Newspapers

Newspapers as Local Tech Resellers

Much attention has been given to old business models as folks in the local media business struggle to figure out how to make newspapers economically viable.

I have an idea that I'd like to throw into the ring -- turn newspapers into resellers of technology products to the local market.

Newspapers have a large local sales force that understands the need of local businesses.  Sure, in some cases, the sales force at your local newspaper is nothing more than a group of semi-qualified "order takers", but if that remains the case then it would behoove each local paper to get rid of everyone on staff and outsource sales to a call center in India.  "Order takers" have to become more economically viable, or they'll be replaced or eliminated over time.

Local businesses need help navigating technology.  Even in 2009, a lot of people don't understand the value of technology and how it can (and often is) harnessed to help businesses be more productive, advertise better, or provide better products and services to customers.

Yahoo has tapped into this to some extent with their Newspaper Consortium.  But I'm thinking of something bigger with a lot more potential.  I'm thinking of something akin to Microsoft's partner channel.  Microsoft doesn't sell directly to customers as a focus of their business.  Instead, they employ a variety of resellers to serve as front-line help, sales, and support for Microsoft products.

It's a radical idea, but it makes a lot more sense to me than hanging on to an old way of doing business.

On a less radical front, I do think that newspapers could be an effective reseller of products that help local businesses reach customers.  Just about all local businesses need help advertising themselves in their local market.  Local media can help make that a reality.  That's why we're beginning to offer our products MinutesNotice to select local media families.  I think it's a model that can help newspapers and local television companies find margin where there simply wasn't any before.  More to come as we progress.  For more information, check out our recently improved web site.

How Newspapers & Local Media can "Out-Google" Google

 

Google's financial success can explained fairly simply. When people are searching for something on Google, they have a certain mindset. They are looking for something - some sort of knowledge. They are actively pursuing it, not passively consuming it. Some people, it turns out are searching for something to buy or a place to buy it.  Those people are perfect targets for the ads that appear on the right side of the screen. Google calls these ads the "Search Network" So perfect, in fact that it's not uncommon to see those ads clicked by 3-7% of all Google users.

 

Contrast that with a different situation. Google also shows ads on other websites - they call this the "Content Network". Message boards, news sites, online magazines. They're exactly the same ads that show on Google's search page, but they get click through rates closer to 0.05% than 5%. Why? Because someone passively clicking around the internet is not actively looking for anything at all. The difference in consumer behavior is striking. 100X increases in click through rate are not uncommon between the Search and Content networks.

 

So how can newspapers be more like Google's Search Network and less like the Content Network?

 

By reaching users when they are in a search mindset. No, newspapers should not, and frankly cannot, compete with Google's search functionality. But they do have something that Google does not. Local knowledge.

 

Newspapers can use that local knowledge to drive search-minded traffic to their sites. For example, you might be at the office and wondering where to go eat lunch. You know all of the places within a mile or two, and have eaten at most of them. It would be handy to know which ones had specials running today to help break the indecision. Without a lot of effort, a specialized hyperlocal site could be created with the sole purpose of aggregating lunch specials by neighborhood. People who go to that site will be actively looking for a place to eat. The local paper knows whom to approach to sell ads on the site, and can do so effectively with a knowledgeable sales force. The result? A massive increase in advertising effectiveness.

 

Another example: Here in Austin, we have two major music festivals each year. South By Southwest and Austin City Limits. You can bet there are specific industries that are just begging to get in front of the festival attendees. Many of those concert goers are from out of town and need  help with basic things. Where to eat? Where to stay?  Where are the best local bars? These are all questions that newspapers can answer - both with content and with intelligent advertising.

 

The goal is to reach a consumer who is asking a question, not a consumer who is killing time.

 

With a little imagination and planning, newspapers can find ways to drive search-minded traffic to their sites. It's not an overnight solution, but it is durable solution with lots of growth potential.

 

This is one area where newspapers can and should out-Google Google.

The Dallas Morning News' "Premium Value" Strategy

Sunday, the Dallas Morning News published an article on how they are modernizing to become a 21st Century Newspaper.  I thought I'd share some of the highlights of that plan & comment.

• increased pricing on print newspaper -- raising rates as much as 43% on home delivery,
• digital "e-EDition" -- $12.99/month for an electronic replica of the printed paper.
• niche advertising opportunities via specialty publications -- targeting high income, Spanish speakers, and young adults with new niche publications.

They've also done some interesting work with NeighborsGo, a hybrid print/online hyperlocal property.

All of these things are great moves designed for more experimentation.  Nobody has the answers, but that isn't stopping the Dallas Morning News from doing new things to see what will work.  Kudos to the team there for dealing aggressively with an ambiguous future.

A Few Interesting Articles

I thought I'd share a few interesting links from last week about the future of newspapers.  Enjoy.

Google's Eric Schmidt's commentary on newspapers -- clearly Google has taken a lot of grief for the troubles of the newspaper industry.  Certainly, Google has wrenched economic value from newspapers not to mention a lot of other types of businesses -- but local media folks would probably do a lot better listening to Google than fighting Google.

Clay Shirky pointed out that a lot of "local newspapers" don't really have a lot of truly local content.  Yep.  You'll get no argument here.  This is why I've suggested before that a lot of newspapers can get unique content through crowdsourcing and other lower cost methods than they've perhaps used for many years.  Newspaper problems are fixed if you solve both the top and bottom line, and that's going to be painful on a few levels.

Finally, Fred Wilson mentioned something that we've seen for the better part of a year -- if local media is to survive, it needs to take advantage of its current (and possibly fleeting) local advertising sales force advantage.  Local media companies may very well survive as resellers of third-party or proprietary technologies that further monetize their local news audience.  More on that later!