Content Is Advertising... In The Newspaper Industry

from the not-that-they-realize-it dept

Tue, Apr 1st 2008 2:09pm — Mike Masnick

Continuing my series of posts on content being advertising, I wanted to look at the newspaper industry. This seems rather fitting, as the industry seems to be freaking out about a new report claiming the largest ad revenue plunge in the newspaper business in over fifty years. While there's some movement to online ad revenue, it's not making up the difference and there are signs that the online ad business is slowing as well (which is what kicked off this series of posts anyway). First off, though, it's worth pointing out, as Chris Anderson does that things aren't nearly as bad as they look. While there is a downturn, the industry is still making a ton of money, much more than even 20 years ago.

However, I did still want to take a look at how the newspaper business has struggled to deal with changing times in the context of the discussion of "advertising is content, content is advertising." The simple fact is that, for many years, newspapers acted as "advertising" for eyeballs. That is, the "news" content was there merely to bring in eyeballs in order to sell print ads and classified ads. So the news itself (the content) was advertising to get the attention of people who might then go on to look at the ads in the rest of the paper (or, ideally, place some ads themselves). When there were relatively few competing sources of news, this system worked. Readers were effectively a captive audience, who would come back day after day, and even put up with less than stellar news coverage and slightly annoying or unhelpful ads.

Unfortunately for newspapers (but fortunately for everyone else) that equation has changed drastically. That captive audience is gone, and with so many different options for news, simply reposting AP reports that everyone saw online yesterday, combined with weak local coverage just isn't that compelling. What happens is that the content isn't advertising anything worth looking at any more -- so people go elsewhere. Google gets them the relevant news and Craigslist handles the classifieds in a much more efficient (and cost efficient) manner. Newspapers, unfortunately, are still acting as if they have a captive audience. Many have done little to differentiate themselves or to provide content that matters to their select readers that distinguishes them from the same content that can be found elsewhere. In other words, they're missing out on that final key element of understanding this space: the advertising/content needs to be useful and valuable.

So how should newspapers adjust? Well, it's time to redefine what news is, and start providing useful information to communities of individuals who value that. That means not playing to the broadest possible audience, but enabling specific audiences to get very specific content that they want and value, which is more difficult for others to provide. And, as we were just discussing, that includes making that community a part of the process. Stop focusing on trying to sell ads and focus on ways to deliver useful and valuable information in a manner that a specific community can gain value out of it and then suddenly your content acts as effective "advertising" again, leading to business models that make sense.

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Jake, 1 Apr 2008 @ 3:17pm

National Variations
The situation seems to be somewhat different here in the UK, as the division between local and national newspapers is extremely clear-cut; us being a relatively small country, there isn't much of a middle-ground between nationals like the Times and the Guardian and local papers that generally confine any mention of a world beyond the county boundary to a single form's-sake-only page cribbed straight off the Internet, the evening's TV listings and occasionally some film reviews. Apparently enough people still lack ready access to the Internet to need the small ads and careers page, or care sufficiently deeply about whatever it is county councils do all day -election to any political body below Parliament being pretty meaningless in Britain- to put up with the generally dire standard of journalism and continue to keep the local papers afloat.
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Steve, 1 Apr 2008 @ 3:22pm

Newspaper
I work for an internet marketing firm who sells a service to newspapers to get daily content online (display ads)

Newspapers have a serious organization to develop content on a daily basis, so regardless of how it is presented to the customer, via the web or on paper, they will continue as the dominate force in providing daily content.

Newspapers are not going anywhere. Their current model pretty much gives away the newspaper for the cost of printing and distributing it, so they actually have a chance to seriously increase their profits while reducing operating costs.
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Glenn Isaac, 1 Apr 2008 @ 3:49pm

1. Traditionally, News Media has sold the attention of its audience to advertisers.
2. Today, News Media publishes content that doesn't upset its biggest advertisers (large corporate entities, mostly), and thus risk losing their business.
3. However, the rise of online information sharing -- blogs, aggregators, techdirt -- is forcing News Media to bring unfiltered NEWS to its READERS just to compete.
4. The world of the future will be better than the world of the past! Hooray!
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mike, 1 Apr 2008 @ 4:36pm

Online News
Creating interesting, useful content is really only half the equation. Unfortunately for the newspaper world, and pretty much everyone else in online publishing, the ads used to monetize the news are not highly valued.

Sure niche sections of an online news site (health, business, etc.) may be able to deliver decent CPM's - but the audience numbers are small. The sections where people actually want to go (front page, sports, etc.) carry CPM's that are dismally small. There are a host of reasons for this (CTR's, competition, segmenting capabilities, etc.), but they all boil down to the fact that the current crop of publishing ads aren't very effective and are valued as such. This is especially compared to the perfectly priced (auction), 100% trackable and only-charge-when-clicked search ads.

So yes, useful content is important. But creating new and interesting ad products is equally, if not more, important.

If interested, here's my list (a bit dated, but sadly, still true) of the other problems the newspaper world has online.
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Paul Camp, 1 Apr 2008 @ 5:04pm

Newspapers are cooler than Google!
Truth is Google is great if you know what you want to learn more about. But newspapers are cooler than Google if you don't know everything that might interest you. Example, the other day when I was reading a newspaper I learned about a study that found that even numbers used as prices of homes seem higher to many people than odd numbered home prices that actually were higher! Who knew? Who cares, you ask. Well anyone who prices things as a part of what they do, which is a whole lot of people.

Sure if your job is primarily to price things for WalMart you probably keep up on all the latest research on pricing. But if you run a small company as I do and pricing is just one of 100s of jobs you do on a regular basis, then you don't keep up. Instead a headline catches your eye in the newspaper and you read something you didn't know you were interested in. The Web is great for searching out more information about a topic you just discovered (in the newspaper).

My friend Jack Fuller former editor and publisher of The Chicago Tribune likened reading a newspaper to a walk through a curio shop. You turn a corner or in the case of the newspaper a page and you bump into something fascinating that you had no clue would interest or might help you.

That's what makes newspapers cool and will preserve their existence for many decades to come. Maybe they won't be in the form of ink on paper, but they will be newspapers and cooler than Google or most commodity news on the internet.
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ehrichweiss, 1 Apr 2008 @ 7:02pm

not the entire picture
"While there's some movement to online ad revenue, it's not making up the difference"

Trust me, if you knew how little online ad revenue is worth compared to print advertising, you wouldn't bring this up ever again. For most newspapers advertising on the web is like driving a Pinto when you've been used to your shiny new Mercedes; web advertising is something they give away as "value added". A single 1/8th page ad, in a daily paper, can pay an employee's wages for the next 2-4 weeks, whether it's viewed or not. Even with the $7+/click we got a year ago from some web advertisers, it barely made pocket change comparatively.
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- Anonymous Coward, 2 Apr 2008 @ 6:10am
  
  Re: not the entire picture
  But when people stop reading printed newspapers, and advertisers catch on to the fact, all you'll have left to drive around in is your pinto. So maybe you should think about a way of trading up before you have to start taking the bus.
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Twinrova, 2 Apr 2008 @ 5:13am

Wow! We agree on something!
In this whole "content = ads" campaign, you and I generally seem to be missing the mark, but it's great to see THIS particular blog has finally enabled you to see my point all along.

No matter what you say, Mike, no publisher (regardless of media type) will distinguish the difference between "content" and "advertising" and will ALWAYS introduce ways to separate out these venues, much like Techdirt does with its SIDEBAR ads, knowing that its content is ALSO advertising.

Now that you finally see where I'm coming from, I can now focus on the true aspect of what it's going to take to get publishers to incorporate these two venues to such a degree that the consumer finds VALUE in this (by tolerating the ads to get the content).

I'm 100% on board with your assessment that newspapers should focus on the community for its content. I also believe the ads should cover 100% of local services and retailers. But do you honestly believe newspapers are going to do this?

I disagree with your assessment newspaper publishers believe they have a captive audience. They would be the first to confirm this is a dead venue for them. Their task is to offset the costs of preparing a print copy, not giving us "news" which is second on their list of priorities. Of course, they go hand-in-hand, but profits will always come first.

This being said, newspapers need to quit producing print. This feature alone would yield an instant savings of revenue. Their content + ads should be expressly online. What about those who don't have internet connections? Well, chances are if they can't afford an internet connection, they most likely can't afford the $.75/day newspaper either, given it would be more expensive than an internet connection ($22/mo vs. a basic $9.99/mo).

In addition, newspaper services should also begin working with local cellphone companies to begin offering news items via cell phone. Think RSS here. Send headlines and give the user the option to connect and read the story via their cell phone. Maybe .10 per story connection? Placing ads between "pages" on a cell phone would also be equivalent to placing pages between print, which would make the publishers very happy in retaining a similar model in print.

News organizations also need to set up feeds via email, personal home pages on the news site, and other electronic venues.

But the BIGGEST way a newspaper can really refocus is by purchasing a station on cable/satellite that's EXPRESSLY related to local news (national if it's a huge event, such as 9/11). Again, selling ads for content. Not sure if this crosses any cable company boundaries, but hell, it's a start in the change for the future.

Now that we got newspapers out of the way, it's time you focus on the future of other media, Mike. This is where you often tell me that I don't get what you're saying (despite being an incorrect assessment).

I'm not sure if you're really selling companies the ability to purchase your services to get the "secret" in merging the two venues, or if you're out to give the info in upcoming parts.

In either case, I think it's apparent that the model you're thinking works in ALL venues of media, because ALL models of media use the same IDENTICAL format: Interrupt content with advertising, despite if they're both one in the same.

Websites, television shows, radio, and newspaper all have the same formula and you definitely have me hooked on how you anticipate trying to get these media publishers to change their ways such that the consumer "buys" into it.

I'd like to see how my future is going to roll out to determine if I'm going to tolerate the change, not be annoyed by it. In today's media market, there is much more advertising for content than ever before. Commercial breaks on television and radio are now longer than ever, and online media continues to find ways of offensive ad attacks to the consumer, TRYING to get them to focus on the ad.

With television and radio, consumers have no choice. Instead, they've found ways to COMBAT the annoyance of ads via DVR recordings to fast forward commercials or using MP3 players in lieu of the radio, or channel surfing (all venues). Hell, even auto manufacturers have adapted by allowing owners to connect their portable devices to the standard radio.

These changes, Mike, is something you need to focus on because people are getting tired of the DURATION of the ads, not the ads themselves. With so many options available to consumers now, it seems the real headline of these blogs should read "How to keep your revenues up by making ads less intrusive to your customers while delivering a product they want".

Good luck with that. You're asking for what I believe is the impossible.
:)
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- SomeGuy, 2 Apr 2008 @ 6:20am
  
  I'm... not sure you do...
  The problem is... OK, so, number of ads I've clicked through in the last 5 years? Maybe as many as 5. Now I'm no math whiz, and maybe I'm behind the curve on click-throughs, but I think part of the point is that people don't care about ads. At best they're ignored. If you're the company selling ads, who cares? But if your the company paying for those ads and not getting any kickback, you're going to start to rethink that strategy. And then you're going to try and find another way to advertise your product. You aren't going to buy sidebar ads, so it doesn't matter who's selling them. And when there's no demand for sidebar ads, how will news-sites that depend on them stay alive?
  
  What Mike's saying, I think, is that if you're still thinking of 'interrupting' content with ads -- if you're still differentiating between 'content' and 'ads' -- then you're doing something wrong.
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  - Twinrova, 3 Apr 2008 @ 4:19am
    
    Re: I'm... not sure you do...
    What Mike is saying about content and ads is correct, and I understand this concept quite clearly.
    
    Mike's entire blogging has been about treating both ads and content as "one in the same" and for businesses to restructure their current model (interrupting content with ads).
    
    If this is what's not being stated in these blogs, then I'll concede to not understanding.
    
    However, the issue isn't the understanding as much as it is in determining the alternative. Once again, I'll use television as an example:
    "Lost" is a show which millions tune into to watch. Within this band of content, a commercial interruption takes place.
    
    Mike's statement that banner ads don't work is the same thing as saying commercial interruptions don't work. This is very evident when studies show nearly 95% of DVR users fast forward through commercials (aka, don't "click" the ad).
    
    I've always stated media (tv, radio, etc) and most consumers will clearly identify the "content" and "ad" in the above scenario. RARELY would consumers dictate the show "Lost" is an ad.
    
    This is important, because Mike's offerings of change only means one thing: There will be no distinguishing difference between content and ads.
    
    In a previous reply, I mentioned that "merging" the two would be an ineffective solution because once people get the notion of watching a one hour "ad", this will be ignored faster than any banner ad, which has a PROBABILITY of being clicked (just not as often).
    
    This is why companies spend millions on advertising despite not needing to. Coca-Cola, McDonals, Pepsi, Ford, etc. are well recognized around the world yet they represent nearly 5% of daily commercials.
    
    This is important to understand, because when the recent reviews for the new "Knight Rider" 2 hour movie were released, many wrote they felt they were watching a 2 hour Ford commercial and TANKED the actual show.
    
    Wait a second, did they just say a COMMERCIAL? Of course they did. Despite the fact that the ad and content were ONE IN THE SAME.
    
    This is why I'm steadfast against Mike's proposed "future of advertising" under the guise of "content". In some cases, it can be effectively done (Techdirt), in others, it it doomed to failure ("Knight Rider") when people start believing their watching a car commercial rather than a television show about a car.
    
    Remember the episode of Smallville I mentioned regarding the Stride gum placement. Read up on the massive irritation by fans about this. MANY felt they were watching an ad and not a show.
    
    Uh oh. CONSUMERS were upset that they actually distinguished the difference between an ad and content despite the fact they were ONE IN THE SAME?
    
    Maybe I'm missing the point on what Mike's resolution is trying to establish, but I keep seeing the same thing: mix the ad and content together so that it's not clear which is which, but there is NO EFFECTIVE way to do this.
    
    Techdirt makes one very bad mistake when Mike's suggesting others to change: They're still using banner ads themselves despite their content acting as an ad.
    
    Otherwise, what incentive do they have to spend money to change their model.
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angie, 2 Apr 2008 @ 6:27am

I don't want to live without newspapers
Like most of America, I don't live in a town where my city's news is also considered to be national news. I live in a town of less than 35,000, so we are heavily dependent on a paid, professional (and they are pros, even if you don't agree with what they write) news gathering and delivery team to keep us updated on what is going on in our own town.

I do not want to travel to the bad end of town to hear about the shootings there, but I do want to know about them. I don't have the time to go to city council meetings, but I do want to know what they discuss. I depend on my local newspaper to tell me about these things in a breadth and depth that no blogger, and certainly no online source, has the time and budget to do.
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Jeremy, 3 Apr 2008 @ 11:56am

Newspapers need to get smarter with the ads they s
Newspapers need to focus on ways to increase the CPMs they get for their ad placements. There is a lot of new technology out there that can help with this from Contextual software allowing advertisers to target ads to specific pages of value or rich media providers that allow more content integration opportunities.

It's up to the newspapers to stay on top of new and innovative ways to increase their return from users' eyeballs.
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