Before the internet made it easier for advertisers to become publishers, they were already growing tired of the limitations (and inflated price) of traditional display advertising. In the magazine industry one of the big growth areas of the past 20 years was client publishing: helping – to varying degrees – companies create magazines which were then given or sold to customers, staff, members, or anyone interested in their field.

With some traditional advertising revenue streams dropping like a stone, newspapers belatedly started to see similar potential in their own markets. Trinity Mirror’s Media Wales are among a few newspaper publishers to sell video production services and the organisation has followed US newspapers in selling SEO services; while the FT followed Conde Nast when it recently bought an app production company.

While the execution varies, the idea behind it is consistent: this is no longer about selling content, or audiences, but expertise – and quite often expertise in distribution as much as in content production.

But the picture continues to change. And a new initiative from Facebook is worth watching closely in this regard:

“Facebook is encouraging advertisers to create ads based solely on the content they publish to their own Facebook pages

“… what Facebook really wants is for advertisers to spend time creating stuff that looks and acts just like the stuff Facebook users already like. (Worth noting that this is quite similar to Twitter’s ad strategy, which treats ads like tweets, and vice versa. Also worth noting: Just like Twitter’s ad strategy, this one should work very well on the limited real estate available on mobile phones.) It’s supposed to promote “earned” media — the industry’s name for promotion that fans/users/consumers end up doing for free, on their own.”

This is a natural extension of owning the platform. But whereas traditional publishers might try to sell users’ content (and, significantly, always feared Facebook staking a claim over their own), Facebook recognises that selling its distribution is the business they’re really in.

This starts to put Facebook in more direct competition with traditional media organisations, and has some significant potential implications:

• Firstly, it weakens publishers’ offerings on social media optimisation – they may have to advise clients to pay Facebook (and Twitter) as well as themselves.
• Secondly, it makes news organisations more direct competitors. In the same way that Apple initially blocked publishers from directing users to subscriptions outside apps, Facebook may see itself squaring up to media organisations.
• Finally, there’s always the chance that this will drive some advertisers out of the walled garden of Facebook and into the arms of the open web where they have more control. Maybe.

Whichever it is – and the whole project may fail to take off – publishers need to watch what Facebook is doing in this space, and adapt accordingly.

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In this guest post Ofcom’s Damian Radcliffe cross-publishes his latest presentation on developments in hyperlocal publishing for September-October, and highlights how partnerships are increasingly important for hyper-local, regional and national media in terms of “making it pay”.

When producing my latest bi-monthly update on hyper-local media, I was struck by the fact that media sales partnerships suddenly seem to be all the rage.

In a challenging economic climate, a number of media providers – both big and small – have recently come together to announce initiatives aimed at maximising economies of scale and potentially reducing overheads.

At a hyperlocal level, the launch on 1^st November of the Chicago Independent Advertising Network (CIAN), saw 15 Chicago community news sites coming together to offer a single point of contact for advertisers. These sites “collectively serve more than 1 million page views each month.”

This initiative follows in the footsteps of other small scale advertising alliances including the Seattle Indie Ad Network and Boston Blogs.

These moves – bringing together a range of small scale location based websites – can help address concerns that hyper-local sites are not big enough (on their own) to unlock funding from large advertisers.

CIAN also aims to address a further hyper-local concern: that of sales skills. Rather than having a hyperlocal practitioner add media sales to an ever expanding list of duties, funding from the Chicago Community Trust and the Knight Community Information Challenge allows for a full-time salesperson.

Big Media is also getting in on this act.

In early November Microsoft, Yahoo! and AOL agreed to sell each other’s unsold display ads. The move is a response to Google and Facebook’s increasing clout in this space.

Reuters reported that both Facebook and Google are expected to increase their share of online display advertising in the United States in 2011 by 9.3% and 16.3%.

In contrast, AOL, Microsoft and Yahoo are forecast to lose share, with Facebook expected to surpass Yahoo for the first time.

Similarly in the UK, DMGT’s Northcliffe Media, home to 113 regional newspapers, recently announced it was forging a joint partnership with Trinity Mirror’s regional sales house, AMRA.

This will create a commercial proposition encompassing over 260 titles, including nine of the UK’s 10 biggest regional paid-for titles. Like The Microsoft, Yahoo! and AOL arrangement, this new partnership comes into effect in 2012.

These examples all offer opportunities for economies of scale for media outlets and potentially larger potential reach and impact for advertisers.  Given these benefits, I wouldn’t be surprised if we didn’t see more of these types of partnership in the coming months and years.

Damian Radcliffe is writing in a personal capacity.

Other topics in his current hyperlocal slides  include Sky’s local pilot in NE England and research into the links between tablet useand local news consumption. As ever, feedback and suggestions for future editions are welcome.

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Ofcom’s Damian Radcliffe produces a regular round-up of developments in hyperlocal publishing. In this guest post he cross-publishes his latest presentation for this summer, as well as the background to the reports.

Ofcom’s 2009 report on Local and Regional Media in the UK identified the increasing role that online hyperlocal media is playing in the local and regional media ecology.

New research in the report identified that

“One in five consumers claimed to use community websites at least monthly, and a third of these said they had increased their use of such websites over the past two years.”

That was two years ago, and since then, this nascent sector has continued to evolve, with the web continuing to offer a space and platform for community expression, engagement and empowerment.

The diversity of these offerings is manifest in the Hyperlocal Voices series found on this website, as well as Talk About Local’s Ten Questions feature, both of which speak to hyperlocal practitioners about their work.

For a wider view of developments in this sector, you may want to look at the bi-monthly series of slides I publish on SlideShare every two months.

Each set of slides typically outlines 20 recent hyperlocal developments; usually 10 from the UK and 10 from the US.

Topics in the current edition include Local TV, hyperlocal coverage of the recent England riots, the rise of location based deals and marketing, as well as the FCC’s report on The Information Needs of Communities.

Feedback and suggestions for future editions – including omissions from current slides – are actively welcomed.

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Remember all that fuss about newspapers bidding on Google Adwords to drive traffic to their site? Well here’s a Web 2.0 twist on the idea: Al Jazeera using sponsored tweets to raise awareness of their Egypt coverage.

Twitter itself has the background. Some notable differences to Adwords are that the promoted tweets can be replied to and retweeted just like any other Tweet.

Also, interestingly, “according to Riyaad Minty, head of social media at Al Jazeera English, the @AJEnglish team is operating their Promoted Tweets campaign just like a news desk.” That’s because the content is the advertising, rather than the advertising driving users to the content.

Some metrics to come out of this, according to Twitter (they’re linking to evidence here):

• “Twitter is one of the top referrers to a site that’s seen a 2,500% jump in traffic since January 25.
• “Al Jazeera English is going to emerge with about three times more followers than it started with
• “And @AJELive, the channel’s high-volume account, has seen huge growth as well.”

H/t Laura Oliver

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Last week Karl Schneider, Reed Business Information’s Editorial Director, spent an hour chatting with students in my Online Journalism class. Most of it is available on video here, but of particular interest to me was a point Karl made about how Reed separated its online advertising into a separate company very early on, and are now reaping the benefits (embedded above).

“Because we had print businesses to protect we spent at least as much time worrying about not doing something on the web that would undercut the money coming in in print as worrying about ‘How do we make this new stuff grow’ … One of the big revenue streams for us was recruitment ads … So when we started to do online jobs one of the big challenges was ‘How can we do this without damaging all of the money tied up in print?’ And very quickly we realised that if we worry about that, we’re going to be rubbish at online job ads, because we’re always going to be operating with one hand tied behind our backs. And we’ll be competing against pure-play onlines who won’t have that worry.

“So what we ended up doing was setting up our online jobs advertising operation as a separate business and allowed it to compete head-to-head with our print business, and it caused all sorts of internal arguments – but it was absolutely the right thing to do because we’re making more money now out of online jobs than we ever did from print jobs. Less per job – there’s a lot more job ads – but it took separating it off [as a separate business] to do it.”

I’ve written about this problem before. Although on paper there are economies to be made by combining print and web ad sales, that’s not a strategy for future growth.

Instead, it appears to result in a prolonged addiction to the dying cash cow of print ads (and, anecdotally, a frustrating experience for advertisers wishing to move money from print to online). Judging by the recent research into magazine ad sales (PDF) in the US (image below), the magazine industry may need to listen to Karl’s experiences.

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Media organisations who only offer partial RSS feeds might be interested to look at a couple of posts from 2 websites with different experiences of monetising their feeds. First, Jason Snell of MacWorld:

“RSS doesn’t generate revenue directly. There are ads in RSS, sure, but they’re cheap and lousy and don’t have remotely the return as ads on web pages.”

Then, John Gruber of Daring Fireball (cached here if you find it as slow as I do):

“The ads in most sponsored RSS feeds are indeed cheap and lousy. The ads in DF’s [Daring Fireball's] RSS feed are neither. They’re priced at a premium, and have attracted (if I do say so myself) premium sponsors.

“If you’ve got a model where revenue is tied only to web page views, switching to full-content RSS feeds will hurt, at least in the short term. The problem, I say, isn’t with full-content RSS feeds, but rather with a business model that hinges solely on web page views. The precious commodity that we, as publishers, have to offer advertisers is the attention of our readers. Web page views are a terribly inaccurate, if not outright misleading, metric for attention. Subscribers to a full-content RSS feed are among the readers paying the most attention, but generate among the least web page views.”

Snell’s response: “What works for [Gruber's one-man] kind of site doesn’t necessarily work for our kind.”

It’s also worth noting the tertiary benefits of full RSS feeds. Offering full RSS feeds makes it more likely a developer is going to create something useful out of it (expensive development time for free), bringing more readers and attention to your advertising or, in the case of the BBC (which may have licensing issues holding it back), fulfilling its public service remit.

Do you or your organisation do anything interesting with your RSS feeds? Are they full or partial? I’d love to know.

(Note, OJB uses the <more> tag to to ensure the homepage isn’t dominated by a single post. Unfortunately, this results in partial RSS feeds. Some day I’ll sort this.)

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The first study (PDF) of magazines and their various approaches to websites, undertaken by Columbia Journalism Review, found publishers are still trying to work out how best to utilise the online medium.

There is no general standard or guidelines for magazine websites and little discussion between industry leaders as to how they should most effectively be approached.

Following the responses to the multiple choice questionnaire and the following open-ended questions -

• What do you consider to be the mission of your website, does this differ from the mission of your print magazine?
• What do you consider to be the best feature of aspect of your website?
• What feature of your website do you think most needs improvement or is not living up to its potential?

- the researchers called for a collective, informed and contemporary approach to magazine websites with professional body support.

The findings were separated into the following 6 categories:

Staff Structure and Decision Making

The researchers found decision making on the website to be the single most important factor in how its website functions.

Most websites were staffed by people who primarily worked on the print editions, and less than a quarter of staff were hired with web experience (29 per cent).

Independent web editors were the only decision makers in the most profitable websites, and the higher a magazine’s circulation and monthly web traffic, the more likely it was to have an independent web editor making budget and content decisions.

Standards and Practices

The researchers found the approach to fact-checking and sub-editing for online content website standards were in general much less rigorous than for printed editions; 51 per cent of original content that appears on web sites is either not copy-edited at all, or is copy-edited less rigorously than in print.

Just under half (43 per cent) of respondents reported either a lower standard for fact-checking online (35 per cent), or no fact-checking at all (8 per cent).

Strangely, they found that websites are more likely to have lower standards in these areas as web traffic rises and when content decisions are made by independent web editors.

Many website editors correct errors without acknowledging the mistake; they are often more likely to be corrected than print, but less likely to publicise the correction – particularly when an independent web editor is involved.

The most common reason for material to appear online is because it ran in the print edition, often because it is breaking news, multi-media content or to maintain freshness and, sometimes, because the quality is not high enough to run in the print edition.

Business Model

For 68 per cent of surveyed publishers, advertising is the largest revenue source – just over half of the magazines (52 per cent) offer all their print material online for free, and profitable sites offer all of their content online for free more often than non-profitable ones.

Only about a third of magazine web sites make a profit, and magazines that publish more frequently, and those that have a higher web traffic, tend to have more profitable web sites.

However, they found magazine circulation generally has little bearing on web site profitability.

62 per cent of the web sites with between 1.5 million and 2 million unique monthly visitors were profitable, compared with 21 per cent of those with less than 50,000 unique monthly visitors.

Social media and community building

Unsurprisingly, most web sites, (47 per cent), have adopted social media tools and techniques, and do so more when independent web editors are in decision-making roles.

However, editorial standards tend to slip even more in this environment. Blogs are rarely copy-edited or fact-checked and comments are moderated at editors’ discretion.

Most magazines have blogs on their Web sites (64 per cent), and those are mostly maintained by staff members (87 per cent); 39 per cent use freelancers or contract-writers for blogs.

Web sites are more likely to have blogs when independent web editors are in charge of the budget. Most magazines allow comments on blogs or other online content (73 per cent).

Technology

The researchers found most magazines are not keeping pace with mobile display and interactivity technology.

Less than one in five are designed for smartphones and very few are formatted for e-book readers (4 per cent).

Again, web sites are more likely to have multiple display options when independent web editors are in charge of budget or content decisions.

Roughly half of magazines surveyed use metrics to guide content decisions (47 per cent), but only 8 per cent closely monitor and rely on them.

Less than half use traffic statistics (43 per cent), and those that do so regularly for content decisions are significantly more likely to be profitable.

Web sites that receive more traffic are more likely to use traffic statistics in content decisions.

Most magazines name Google Analytics as the online metric that is most helpful to their web sites.

Content management systems vary, with custom-designs proving most popular.

Mission

Most editors said their website and their print magazine shared a common mission.

16 per cent of respondents said their Web site’s mission involved community-building with readers.

Interestingly, only 5 per cent mentioned new or unique content as integral to the site’s mission, with 96 per cent reporting the primary use of content from the print magazine online.

In conclusion, the researchers call for a “Habermassian convention” to continue the discussion of issues raised by the study.

They suggest an inclusive and wide-ranging approach to help foster the democratic ideal of the public sphere in online publishing, to address the challenges for the future of journalism and of online business models.

Specifically they call for the following questions to be addressed:

• What is keeping web experience out of magazines and why?
• Why doesn’t the industry create codes of conduct and guidelines on matters such as online fact-checking, copy-editing, and error-correction?
• Is it true, as one respondent said, “if it’s fact-checked, it’s not a blog,” and is this an existential or a definitional question?
• Subject for discussion: Why have earlier attempts at standardizing the world of blogs and social media notoriously failed? Is it, at long last, possible to identify best practices for using the tools and techniques of digital journalism?

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AOL is making plans for its post-Time Warner life that show just how news could be organised if you started with a blank canvas and two words: user data:

In December, when it becomes a stand-alone company, AOL will begin to tap a new digital-newsroom system that uses a series of algorithms to predict the types of stories, videos and photos that will be most popular with consumers and marketers.

The predictions, it says, are based on a wide swath of data AOL collects, from the Web searches people make on its site to the sites visited by subscribers to its Internet services.

The system is designed to track breaking newsand trends and identify the best times to write about seasonal events, such as Halloween or Monday Night Football.

Based on these recommendations, the company’s editorial staff, which totals about 500, will assign articles to a network of free-lancers across the country via a new Web site called Seed.com. AOL says it now works with about 3,000 free-lancers, but it is hoping to sharply increase that number through the Web site, which is open to anyone looking to submit a story.

It’s brave stuff. For years we’ve heard traditional publishers state flatly that, while user data is useful, they would never think of handing over the editorial agenda. Whether that’s pride, vanity, professionalism, or all three, AOL doesn’t have it.

And I lied: it’s not two words on that blank canvas, but 4: user and advertiser data. The article goes on:

AOL says it will pay free-lancers based on how much its technology predicts marketers will pay to advertise next to their articles or videos. It says that will range from nothing upfront, with a promise to share ad revenues the article generates, to more than $100 per item.

In addition to selling standard ads to run alongside the story or video on a Web page, AOL says it will offer custom content. For instance, AOL says, if its algorithms show consumers are searching for information about the Zhu Zhu Pets robotic hamster, a retailer could pay AOL to sponsor an article about where to find the hot toy. Some traditional media outlets, including magazines and TV studios, offer similar services.

This is Google’s auction-based contextual advertising model applied to journalism, essentially matching supply and demand from readers and advertisers to set the market rate. The one variable that is notable by its absence is the supply of journalists: AOL don’t say whether payment rates will go up if no one decides to volunteer their writing for a mere ‘share of ad revenues’ (I’m guessing in that instance one of AOL’s editors will have to write it themselves – but at least they’ll be being paid. Hopefully.)

Indeed, with an upper rate of ‘more than $100 per item’ you wonder how large the supply of writers will be – yes, there’s lots of people writing for nothing online, but they generally write out of choice and for pleasure, not based on the arbitrary demand of an algorithm. And clearly, based on the number of editors they look set to employ, AOL are not expecting writers with great knowledge and talent (the payment of journalists also sounds similar to the content factories of the search engine optimisation industry).

Ryan Singel points out that Demand Media are already doing something similar. That’s true, but AOL have access to data that Demand could only dream of, along with a number of growing brands.

Ultimately, it’s a clever idea, but one that looks like it has already been taken to an extreme too far for advertisers who like to see their brand next to quality journalism. A lot rests on whether AOL can manage the churn of contributors, and the bottleneck of editing, long enough for advertisers to get used to the model. It’s a peculiarly new media model, with its own downfall built in.

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More questions from a student that I’m publishing as part of the FAQ section:

1. If News Corp starts charging for news stories, do you think readers would pay or they would just go to different newspapers?

Both, but mostly the latter. Previous experiments with paywalls saw audiences drop between 60 and 97%. And you also have to figure in that a paywall will likely make content invisible to search engines (either directly or indirectly, because no one will link to them which will drop their ranking). Search engines are responsible for a significant proportion of visits (even the Wall Street Journal receives a quarter of its traffic from Google). Still, some people will always pay – the question is: how many?

2. A newspaper website which introduces paid content is very likely to see a decline in number of visitors. How would this affect advertisers and the amount they agree to pay to that website/newspaper?

Advertisers will pay more per user, firstly. Both because they will know more about that user through registration details (and therefore advertising will be more targeted), and also because they know that that user has paid to see content, making them both more engaged and likely to be more affluent.

Of course, there will be fewer of those users, so the challenge is compensating for the loss of quantity through the increase in quality.

3. In your opinion, how could the concept of ‘charging for content’ affect the quality of journalism?

The interesting thing about the recent announcement by the editor of The Times is that he said they wouldn’t charge per article because that would influence their commitment to expensive journalism such as covering Sri Lanka.

An optimist would hope that charging for content would mean that a news organisation would focus more on unique journalism that doesn’t replicate what is available elsewhere for free. Sadly, I don’t think we’ll see that happen, at least in the near future.

It’s worth pointing out that many web operations churn out content because the advertising rates are so low they need to get as many views as possible.

On the flip side, if your paywall is preventing you from attracting enough readers to fund decent journalism, then you save the same problem.

More generally, putting up a paywall means that your journalism is seen – and criticised – by fewer people, which I would argue does present a quality issue. The future of journalism is collaborative, so if you’re putting up barriers you’re not enabling that opportunity to tap into the enormous knowledge in your former audience.

4. Do you think other newspaper publishers would follow News Corp and start charging for content or there would always be “free” places for news?

If News Corp makes it viable, then yes, others will surely follow. Until then I think almost all will sit back and see what happens with News Corp. But there will always be free places for news for a range of reasons: firstly, publicly funded organisations like the BBC and those with a social remit such as The Guardian; secondly, those funded by voluntary or foundation income such as The Bureau of Investigative Journalism and organisations like Amnesty; and finally, passionate citizens and those who simply like to chat.

5. Do you think that ‘charging for content’ is a vital business model which would last for long time?

I think it’s a business model that can work in some circumstances, if managed intelligently. The FT, for example, seems to be making it work, mainly because that content is financially valuable (I’d argue it’s information they’re charging for rather than content) but also because they’ve not cut it off entirely.

But broadly I think it’s the most difficult model because people never paid for ‘content’; they paid for a package and a service that included content. They bought a newspaper, not ‘the news’.

As for its longer term viability, as the means of production and distribution become more widely available, and advertisers themselves become content producers, it’s going to be increasingly difficult, and we’ll see increasing pressure on government to legislate to shore up publishers’ monopolies because of that, I fear.

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ReadWriteWeb reports on Google’s inclusion of “Real-Time Updates” in selected users’ Gmail messages. Google’s Help explanation says:

“If you’re subscribed to receive email from certain senders, the messages you receive from them will be enhanced with an interactive gadget that has up-to-date content from their website (you’ll also see an icon in your inbox identifying these messages).

“For example, if you receive a Pregnancy Bulletin newsletter from Babycenter, you’ll be able to view up-to-date content, including the baby name of the day, and browse though the current top 100 baby names within the message. Aside from the convenience of being able to interact with certain websites from inside Gmail, the branded content will help identify that your messages are legitimate and not spoofed (we’ll only show branded content when the sender authenticates their mail). We’re currently testing this with a small number of senders and will decide whether to make it widely available based on user and partner feedback.”

This has a two major implications for publishers: the first is the possibilities it opens to create genuinely lucrative email newsletters either for their own publications or – just as likely – for advertisers (think of it as the email equivalent of the corporate magazine). But will they have to get in bed with Google to benefit from them?

The second implication is this: advertisers are already beginning to spend their budgets on their own publishing operations – i.e. websites and viral marketing. This is another possible candidate for those budgets.

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