Listening to news executives talk about micropayments, Kindles, public subsidies, micropayments, collusion, blocking Google and anything else that might save their businesses, it occurs to me that they may have missed some developments in, ah, well, the past ten years. For those and anyone else who is interested, I offer the following primer on how things have changed.

Any attempt to create a viable news operation needs to recognise and take advantage of these changes. I will probably have missed some – I’m hoping you can add them.

UPDATE: Jay Rosen suggests reading this post alongside this one by David Sull: “newspapers are essentially a logistics business that happens to employ journalists”. He’s right – it makes some great points.

1. Atomisation of news consumption

In the physical world news came as a generic package. You had your politics with your sport; finance news next to film reviews. You might buy a paper for one match report. No longer.

It’s probably no coincidence that majority news consumption recently shifted from regular consumption to sporadic ‘grazing‘.

2. Measurability of users

If you placed an ad on page 3 in a newspaper with a circulation of 100,000 or a broadcast watched by 5million, you didn’t think about the readers who only bought that paper for the sport; or the viewers who popped out to put the kettle on – and that’s before we talk about circulation figures inflated by the assumption that every paper was read by 3 or 4 people.

Online you know exactly how many have looked at a specific page. Not only that, you know exactly how many have clicked on an ad. And you know exactly how many made a purchase (etc.) as a result.

There’s more: you know what page the user was coming from and went to; you know what search terms they were using; you know what country they are in, how high spec their computer; and depending on how much data they’re provided, a whole lot more besides.

There are two huge implications of this measurability (which many advertisers are only just waking up to). 

Firstly, advertisers expect more. Online, advertising has moved from a print/broadcast model of paying per thousand viewers (CPM) to paying per thousand clicks (CPC) to paying per action – i.e. purchases, etc. (CPA).

Secondly, it means that editors and managers now know in much more detail not only what readers actually read – but what they want to read (what they are searching for). My name’s Britney Spears, by the way.

3. Mutually conflicting business models

In print you could have your cover price and your ads; online, any paywall means vastly reduced readership because you are cutting out distribution channels – not just Google, but the readers themselves who would otherwise pass it on, link to it and blog about it. You either square that circle, or look for other revenue streams.

4. Reduced cost of newsgathering and production

The technologies were dropping in price long before the internet – satellite technologies , desktop publishing. But the web – and now mobile – technology has reduced the cost of newsgathering, production and distribution to almost nil. And new tools are being made all the time that reduce the cost in time even further. When publishing is as easy as making a phonecall, that causes problems for any business that has to maintain or pay debts on costly legacy production systems.

UPDATE: Robert Brand takes me to task on this one in the comments but also on his blog, where I have responded in more detail.

5. End of scarcity of time and space

Sometimes people need reminding of the basic laws of supply and demand. From a limited availability of journalism to more than you can ever read, any attempt to ‘sell content’ must come up against this basic problem.

6. Devaluation of certain types of journalism

If a reader wants a book review most will go to Amazon. Music? Your social networks, Last.fm, iTunes or MySpace. Sport – any forum. Anyone producing journalism in those or similar areas faces a real issue. 

7. The end of monopolies

Just as the scarcity of space has been broken; the scarcity of distribution networks has been blown apart. To distribute information in a pre-web era required significant investment. To distribute information in the web era requires an email account or a mobile phone. Social networks are more powerful and efficient than delivery vans, and you don’t need to sell a certain amount of information to make them viable. 

Oh yes, and that makes news even more perishable than it was before.

Meanwhile, the monopoly on advertising has gone. Where before an advertiser might have had a choice between you and a local freesheet, now they can choose from dozens of local media outlets, national directories, international outlets, search engines, social networks, or spending money on becoming media producers themselves. This competition has driven the cost down and innovation up. What have you done to stay competitive?

8. Cutting out middlemen

Because anyone can publish and anyone can distribute, retailers can talk to customers directly. If Threshers can release a money off voucher directly to customers and it become wildly (too) successful, why should they advertise in a newspaper or magazine? If councils can publish news on their own website, or indeed publish and distribute their own publications, why should they publish announcements in a newspaper? If Coca-Cola can create a ‘brand experience’ on its website, and gather consumer data at the same time, why should they limit themselves to 30 seconds in the middle of Britain’s Got Talent?

9. Creating new monopolies

Google rules this space, not you. Amazon rules this space. iTunes rules this space. eBay rules this space. Facebook rules this space. Craigslist rules this space. If you want to thrive in the new environments you have to understand the contexts within which users operate. Search Engine Optimisation is one aspect of that. Social Media Marketing should be another. Understand how one website’s domination of a particular space of the web impacts on your strategies, and acknowledge you no longer control your own destiny. Yep, Google stole the delivery trucks and Amazon stole the newsstand. Oh, and you gave away a whole lot more too.

10. Digitisation and convergence

When everything is digital, new things become possible. Audio, video, text, photography, animation – all becomes 1 and 0. You need to understand the efficiencies that makes possible, from broadcasting live from your mobile phone to releasing images on a Creative Commons licence or publishing raw data to allow users to add value through mashups. The value of your organisation lies not just within its walls but beyond them too.

11. The rise of the PR industry

The PR industry is often overlooked as an economic influence on the news industry.  Its first influence lies in the way it has provided cheap copy for news organisations, meaning an increased reliance by news organisations on fake events, reports and releases. This will become increasingly problematic as the PR industry starts to cut out the middleman and appeal directly to audiences.

Secondly, the PR industry has an enormous effect on recruitment and retaining of talent in the news industry. In short, news organisations have become a training ground for the PR industry. Journalists who cannot live on newspaper wages have been leaving for PR for some time now, meaning increased costs of training and recruitment (partly because there are few older journalists able to train informally). Furthermore, good graduates of journalism schools are often recruited by PR even before they enter the news industry, meaning the news industry has a problem attracting the very brains that could save them.

12. A new currency

Oh yes, and that money thing? It has competition. The rise of social capital is a key development that must be considered. Anyone who thinks nonprofessional media is not important because it doesn’t have a ‘brand’ or because people will lose interest, doesn’t understand the dynamics of social capital. Many people read blogs and other UGC because they trust the person, not the ‘brand’; many people self-publish because of the benefits in terms of reputation, knowledge and connections. And many people link to news articles or contribute user generated content because a journalist invested social capital in their communities, or an organisation built a platform that helped users create it.

That’s it. Unless you can come up with some more…?

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The biggest problem for newspapers is not falling readerships, it is falling advertising revenue. It is the move from local monopolies to a global platform where competition is everywhere, and advertising less lucrative.

For all the talk of how journalists can get a grip on new media, there’s been far too little on how ad sales people can do the same. So here I present ten ways ad sales people (and their managers) can save their jobs.

1. Stop treating web ads as second class

The first and most important change is a structural one. While management enthuse about a digital future, the bottom line for most ad sales people is this: incentives are based around print ads; web ads are typically sold as add-ons, and much cheaper ones at that. When it comes to earning your wage and your bonus, web ads are simply not the priority.

If newspapers are serious about a multiplatform future, they need to look at ways to change incentive structures to better reward web ad sales.

And part of this means making web ads more lucrative – because why would you put all your effort into selling a £50 banner ad when you could be selling a £500 half page ad?

2. Stop selling adverts on static pages

Most advertising on news websites still tends to take the shape of banners, sold against particular sections. This is the ad equivalent of shovelware or brochureware.

But the web is not a brochure: it is dynamic, constantly updated, and flexible. So why not drop the print mindset, and start selling against some of the following:

• how about a slot against the ‘most popular’ story of that minute (if it helps, think of it as the equivalent as the front page ad), second most popular, and so on (you could even auction these slots in the same way as Google does with AdWords).
• How about a slot next to breaking news? (Obviously you would put provisions into place to prevent embarrassing juxtapositions).
• Or exclusives? (If they still exist)
• Or personalised services such as SMS alerts on election results, school closings or local events (as the Cincinnati Enquirer’s James Jackson mentions)?

3. Sell advertising against search terms

While we’re stealing ideas from Google, here’s another one: instead of selling an ad on a particular page, sell advertising that will be targeted at people who search for particular things.

As soon as someone searches for a particular term, that advert is served up to them. Simple.

Then, why not turn the usual process on its head and sell the print ad as an add-on? Even when people spend money on search marketing, they often back it up with print ads, and the stats on user behaviour suggest they should do more:

“Two-thirds (67%) of search engine users are driven to search by an offline channel, and 39% of those offline-influenced search users ultimately make a purchase from the company that prompted their initial search. Moreover, it also shows television advertising to be the leading offline channel that drives users to search (37%).”

4. Give ad sales people access to the internet

Incredibly, many ad sales people are not allowed access to the internet at work. This amazes me. What happens when a client calls to ask about their online ad? Do they have to put them on hold while they find a computer? What happens when a client mentions a website they’d like to imitate? What happens when a client uses a web 2.0 buzzword that the ad sales person needs to quickly look up?

Most of all, what happens if an ad sales person is expected to sell online advertising, but has never used the internet and doesn’t understand its possibilities?

If this is your future direction, it helps if the place where most of your money comes from knows something about it…

Especially when they have access to online reports which say local newspaper websites are one of the most trusted places for advertising.

5. Enable the long tail of small businesses to advertise without you doing it for them

Online advertising means that small businesses who previously were not typical print or broadcast advertisers can now afford to advertise.

In other words, there is a potential long tail of small advertisers that could prove a significant source of new revenue.

Google’s own AdSense is one (particularly successful) example of this; Rick Waghorn‘s Addiply is another (built in response to his frustrations with AdSense).

Many newspaper websites carry AdSense adverts, but if a small operation like Waghorn’s can build a service to allow local businesses to buy and place their own advertising, why aren’t major publishers? Why give more money to Google? Why ask ad sales people to spend hours cold-calling for small web ads when you can cut out the middleman and focus your ad sales team on more creative work, like…

6. Think beyond the banner: get creative about online advertising

The web is not a one-way medium. We expect interactivity from a modern news website – comments, polls, bookmarking, chat – so why do we not extend this capability to the advertising? Here are some simple ideas:

• How about letting users work out their body mass index as part of an ad for a health club?
• How about selling that cute little widget to the health club website as well? Or showing them how to allow users to embed it on their own sites?
• How about allowing users to email an ad to a friend at a click?
• How about creating a branded game for the client – again, that can go on their own website too.
• How about a mobile-based weekly dining-and-entertainment advertorial touted as a roundup of things to do offered as part of a joint print/online promotional package for bars and restaurants.

If an ad sales person can pitch ideas like that to a client, they may be more successful. And they can charge more too.

Remembering that many businesses have websites too is key here – an advert can be sold twice: once on the news site, again as a piece of content on the client’s site.

As web readers become increasingly banner-blind, and CPMs/CPAs/etc. less reliable, standing out from the crowd becomes increasingly important.

7. Think about vouchers/coupons

This will not be new to readers in the US, where coupons are a big part of newspaper advertising. In the UK, however, what are better known as vouchers don’t seem to have the same importance in newspaper advertising, and I’m not sure why (if anyone can enlighten me, please do).

Vouchers online, however, are a power in themselves, with dozens of sites dedicated to simply passing on voucher codes. As a result, they can not only be a great way of driving business to advertisers, but also traffic through your site.

One publisher took this idea further at DeliveringQC.com (background in this report (PDF), p39), while the Tampa Bay Tribune took the idea mobile with XtraCoupons.mobi (background here):

“One of the biggest drivers of revenue for the [parent] mobile site has been the sales staff themselves. Media General made extra efforts to train ad sales reps to sell the mobile, including arming reps with demonstrations, PowerPoint presentations and other sales collateral.”

8. Sell advertising aimed at the non-local market

Your online audience is different to your print audience: typically only a third of local newspaper website users will be readers of the newspaper; another third will be local non-readers; and a further third will not be local.

That means you have a new market for ads, and therefore new clients you can pitch to.

The most obvious is to sell ads to local hotels, resorts and attractions for those people who read their old local paper and occasionally pop back for a break (most obvious places: sports pages; nostalgia features).

This also works the other way: with non-print readers you can create non-print products: take the old sponsored print supplement idea and do it online. Create a service. Build a platform. Do something with multimedia…

9. Sell video ads, as well as the production of video content

Video has enormous potential as a source of ad revenue – not just in terms of traditional ‘spots’ at the start of some video editorial, but as content in itself.

The drop in the cost of producing such video means that there is a new potential market for not only selling video ads, but selling the production of that video itself (and of course production of video generally). Small businesses who would otherwise not have considered video can now afford it.

Newspapers are starting to build experience in video. Production standards for web video are not expected to be as high as broadcast – a simple ‘video diary’ format can be filmed cheaply – and there’s the rub: on the web, production is incidental, but a good idea and good content is key, and newspapers could offer both.

The idea doesn’t stop at video: the NAA reports of TBO.com’s mobile operations:

“sales and online staffs are also selling services to help local businesses build their own mobile advertising and marketing campaigns. Using their experience and services in mobile, Media General is helping businesses build mobile microsites as well as offering text messaging services, which setting up and managing SMS campaigns. “That is proving to be where the major revenue is coming from,” [director of mobile Tim] Repsher says.”

10. Work in networks

We are in a networked era. A modern journalist should know how to team up with people outside their organisation, to connect with communities and readers…

Ad sales people should build the same skills.

On a basic organisational level this should obviously start with selling ads across titles, top-down – the most obvious being beer ads in football sections. That should be happening anyway. But it can equally work the other way – selling ads from one title across parts of the network, bottom-up.

Targeted advertising technologies make it possible to have ‘local’ advertising in newspapers 200 miles away from the client, if it’s relevant to the reader.

Then there’s looking outside your own organisation. A national newspaper executive recently told me they have an advertising and revenue share agreement with a number of blogs. Sounds like a sensible idea to me.

Bonus: don’t take digital growth for granted

Whisper it quietly: online ad sales by newspaper businesses are beginning to decline: “Upselling print advertisers is a losing business when those advertisers are fleeing print.”

Your ad sales staff may already be doing some of these things, or planning to – sing their praises here.

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