Newspaper Self-Help Guide Aims to Shake Up Old Habits

As newspaper publishers become convinced current online growth rates will not counteract the downward spiral of print readership and ad revenues, more and more solutions are being brought to the table. The latest is a self-help strategy of sorts from newspaper business training organization The American Press Institute (API) and education consulting and training firm Innosight. The step-by-step guide aims to help newspaper publishers move away from the news-heavy, display and classified ad-driven model of the past to one that serves local communities and advertisers in a variety of ways.

Niche, user-generated and data-driven content as well as more targeted and cost-per-action advertising are among the recommended ways newspapers can open up new revenue streams. Another that most agree is important, but fewer are sure can be accomplished, is creating a network of newspaper sites to compete with portals and other large sites.

“We need to move from the old monolithic business model… to a diverse and growing portfolio,” declared Steve Gray, managing director of API and Newspaper Next. The year-long Newspaper Next project developed and tested business innovation methods at seven newspapers, including The New York Times Company’s The Boston Globe, Gannett’s California-based The Desert Sun, Belo Corp.’s The Dallas Morning News and Advance Publications’s The Oregonian.

The recommended “portfolio solution” encompasses an array of free and paid products beyond just news. In order to determine which content and ad offerings best serve particular communities, the report suggests publishers seek out untapped markets of “non-consumers,” i.e. the people who don’t read the paper or advertise in it currently.

“The online strategy chosen by most newspapers — essentially reproducing the newspaper online — falls into a common disruption trap…. attempting to reproduce the old product in the new technology, and thereby missing many of the best new opportunities,” notes the recently-released “Newspaper Next: The Transformation Project” report.

In its work with the Newspaper Next project, Media General’s The Richmond Times-Dispatch discovered the number of local businesses not advertising in the paper was at least four times greater than those that were. Talking with businesses in that underserved market revealed, “Hyper-local businesses (e.g., drycleaners and grocers) and businesses with distinct audiences (e.g., baby stores and luxury goods retailers) wanted to target their marketing message more narrowly,” according to the report.

However, according to Innosight Managing Director Scott Anthony, standard display ads and classifieds don’t necessarily fulfill the needs of advertisers looking to build brands or connect directly with customers or ease internal office administration work. “The newspaper industry has fooled themselves into thinking the problem the business customer has to [satisfy] is to advertise,” he observed.

What might appeal instead to local and small businesses, notes the report, is cost-per-action lead generation and paid search. Such offerings would work best in conjunction with non-news content “like transaction verticals and alongside classified search results,” the report adds. Perhaps the most appropriate newspaper content for lead generation through user registration has yet to be designed. “It’s a matter of creating content, surveys, the fill-in-the-blank solutions,” commented API’s Gray.

The way ads are sold is also a factor. Rather than relying on a high-cost salaried sales force to sell paid search and lead generation ads, the report suggests publishers may want to implement self-serve buying platforms through third party vendors like AdMission and AdDynamix.

Serving niche audiences through vertical content is one obvious way newspaper companies can offer contextually-targeted advertising. The report suggests categories such as entertainment, travel and high school sports, as well as even more ad-themed verticals like autos, homes and coupons.

Data-driven information resources and opportunities for users to create content are also recommended. For example, E.W. Scripps Company’s naplesnews.com, the Web edition of Florida’s Naples Daily News, has searchable databases for local team and athlete comparisons. And sites like Enterprise NewsMedia’s Plymouth, MA-based WickedLocal provides news content and lets users write blogs, join in discussion forums, and submit photos.

In a survey of newspaper businesspeople conducted for the report, 72 percent of respondents agreed the industry is missing out on online opportunities because of a failure to collaborate. Many agreed that firms need to partner in sales efforts, ordering and invoicing structure, inventory monitoring and control, ad-serving, traffic metrics, and ad standards, all “key components of a national, unified online ad sales program,” said Gray. Still, less than half — 49 percent — agreed paper publishers are capable of successfully organizing and managing joint online initiatives. The Newspaper Association of America is among the organizations working to build a broad newspaper site network.

“In our home market newspapers are the disrupted [businesses]….We have the opportunity to think like disruptors ourselves,” Gray concluded.