Newspaper advertising in the U.S. has dropped by a stomach-churning 64 percent since 2006, and the industry has been scrambling to replace what once generated 80 percent of its revenue. American newspapers now capture a smaller percentage of digital advertising revenue than they did a decade ago, and the rise of mobile has complicated an already difficult ad landscape.
Consumers are rapidly shifting to mobile platforms, but as with any emerging platform, proven monetisation strategies lag consumer adoption. What is the way forward?
One of my favourite lines about the challenge comes from Jim Brady, former executive editor and vice president of WashingtonPost.com and the former editor-in-chief of Digital First Media.
At the Online News Association conference in 2010, he said, “There are no silver bullets, only shrapnel” when it comes to solving the revenue challenge for newspapers.
It is clear that there will not be a single source of revenue that replaces that billions in print advertising that the U.S. industry has lost in less than a decade. If we have any hope for our future, we’ll have to come up with new, diverse forms of revenue.
There will not be a one-size fits all solution, especially for large local newspapers groups that have print and digital readership that ranges from a few thousand a day to several hundred thousand. Fortunately, we’re starting to see some successful strategies.
Some of these strategies are just the logical, digital evolution of advertising and marketing, but they are delivering meaningful revenue.
Events – community and revenue
B2B media companies have long made events a key part of their business, but consumer-focused media, especially local newspapers, have only recently begun to consider events as a potential revenue stream.
Margaret Sullivan, the New York Times’ Public Editor, recently said that events could grow into a “$20 million enterprise” for the paper. At the moment, the “Gray Lady” will be running only eight conferences, three in the U.S. and five internationally, but the newspaper is obviously looking to grow this business aggressively.
It is easy to look to international news organisations for inspiration. While their capacity has been diminished after years of cuts, they still have the resources to execute big projects. But events aren’t just for the big gorillas; as a revenue stream, events scale down as well.
From the New York Times, we look to other end of the newspaper world in the U.S: The Times of Ottawa, Illinois. It has a circulation of 15,500, and the small daily has built up a sub-brand called Starved Rock Country which started as a quarterly magazine in 2012, according to Editor & Publisher.
That brand branched out into events which now include a concert series and a marathon. Events can also be part of a comprehensive strategy to transform subscriptions into more of a membership program. At Gannett, where I’m an executive editor over a small regional group of newspapers, we have our Insider program.
Subscribers have exclusive access to events and discounts at local businesses.
It is hardly breaking news to say that native advertising is huge. Buzzfeed’s business is built on it, and newspapers are rushing to take advantage of what they see as a way to deliver premium digital results and deliver brand messages to mobile consumers.
Native advertising is really just a new form of content marketing, and it nicely leverages newspapers expertise in content generation.
Most publishers are getting into native advertising because brands believe well written content that carries their message will cut through the cacophony of digital advertising, and publishers can charge a premium prices, as opposed to traditional display advertising, where excess inventory continues to put downward pressure on CPMs and returns.
To compete in this hot space, major publishers are creating content studios staffed with crack design and editorial staff to create truly premium native advertising content. The New York Times, Forbes, the Wall Street Journal and broadcaster CNN have all launched content studios.
Obviously, big media brands are rushing to build their offerings, but I see an, as yet untapped, opportunity for newspaper groups. While it would be financially unworkable for my group of small newspapers to have its own content studio, we are part of a regional cluster designed to help encourage new growth.
Such clusters can share key production resources, benefitting from economies of scale on services while still delivering hyperlocal content. I think that one of these services has include a content studio. It would allow us to deliver innovative native advertising solutions with very high end content to some of our major advertisers.
We currently have a native advertising program, but we often struggle to generate meaningful incremental revenue from current advertisers who simply shift their budget from their current advertising service to native.
I believe a content studio would efficiently deliver the value to advertisers to generate significant new revenues.
Digital marketing services
One of the conundrums of local digital media is that while we reach more people than we ever did in print, we still have not found a way to effectively monetise that expanded reach.
As an editor, I would love for the remaining resources we have to be focused on content, but I know that just as we need to aggressively build audience through digital investments, we need to even more aggressively build digital revenue through strategic investments.
Jim Maroney is the publisher of the Dallas Morning News and chairman, president and Chief Executive Officer of A. H. Belo Corporation.
Belo was once a sprawling media empire, but it is now focused almost entirely on the Dallas-Fort Worth area in Texas. Maroney accepts that print is in decline so he is looking for new areas of growth.
To achieve that growth, he has been on a bit of a buying spree. Most newspaper groups over the past decades have tried to build scale by buying up as many newspapers as possible.
Maroney is buying up digital marketing companies, including social media and word-of-mouth marketing as well as data automation companies. The nice thing about digital marketing services is that they scale down to smaller newspapers like the four I oversee.
At one of my newspapers, The Sheboygan Press, we recently sold a digital marketing package to a local business with operations not only in other states but also in Canada for tens of thousands of dollars.
That’s great revenue for a single sale, and it brings digital sales in line with some of the income that we used to get from print. This commercial innovation gives me hope that we can build new digitally native business models for local news media.