Tag Archives: business models

Print's advertising problem – tying one hand behind its back

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.

87% of ad staff work across both print and web

Image taken from CJR research into magazine websites (link above). 'To' should say 'Two'

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RSS feeds, advertising and selling attention

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.)

Summary of "Magazines and their websites" – Columbia Journalism Review study by Victor Navasky and Evan Lerner

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: Continue reading

When your website is a platform you can collect taxes

A good example of how seeing your website as a platform for other people to do things can lead to one of the oldest business models around: taxes. From TheNextWeb:

“Facebook still has one major trick up its revenue-sleeve: taxes. With companies such as Zynga raking in millions from the Facebook platform, Facebook could easily implement a 10% tax with little damage to its community, instantly raising tens of million more in revenue.”

Internet news as a market for news lemons

This article frames the problem of news dissemination as a problem of market lemons, analogous to the issue raised by George Akerlof in 1970. Framing news as a mechanism of vetting common knowledge as opposed to entertainment allows one to see that instant common knowledge in the byzantine and uncertain way in which humans communicate and live in is unattainable. Given this frame of the problem a potential solution is posited which allows traditional newspaper companies to serve and focus on the role of validating news rather than simply creating or capturing it. The most value added service that traditional news organizations can provide is validation of truth and quality assurance.

“It is hard to get the news from poems, but everyday, men die miserably for lack of what can be found there.” (William C. Williams)

Introduction

Gauging quality of entertainment is fairly simple and self-evident. Consumers know instantly whether a product is entertaining and consumers continue to pay attention if they find the material to be entertaining.

News providers tend to serve both an individual’s desire for entertainment and information in one product bundle. Although it is very easy for consumers to test the quality of the entertainment component of news it is much more difficult to gauge the information quality of news.

Consumers face the intangible dilemma of assessing whether news is accurate or true, which poses a problem of asymmetric information for consumers. Continue reading

FAQ: How would paywalls affect advertisers? (and other questions)

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? Continue reading

What thelondonpaper’s death means for freesheets on the web

On 18 September 2009, beloved London evening freesheet thelondonpaper folded. In its wake, London Lite remains.

While the closure is part of a larger effort by owners News International to trim the fat from their portfolio and erect paywalls around profitable titles, it also speaks to the future of freesheets on the web.

Back in April, thelondonpaper re-launched their web site. What was interesting about that was that London Lite had effectively no web site. It still doesn’t — just a ‘e-edition’. Its content is “incorporated” with morning freesheet Metro.co.uk. Looking back, one has to wonder what would have happened if the money hadn’t been sank into the web presence. Would thelondonpaper still be around?

In a comment on a Guardian article about the closure, a now-former londonpaper web developer had the following to say about the redesign: Continue reading