A recent press release on Mediabids -
The blog post below, from the Suburban Newspaper Association of America, unintentionally offers the perfect illustration of the illogical thinking of many publications in regards to pay walls on web sites. On one hand, the author, Deb Shaw, points out that newspapers are the primary initiators of local content and that other mediums, including citizen-written efforts and blogs are ill equipped to displace newspapers in this role. On the other hand, the author ominously quotes a survey showing that most Americans want their news for free and would search elsewhere for content if it was not given away free by publications.
Search where? If local newspapers are not writing it, readers can search all they want, it won't exist. I want a new car to be free but no matter how many auto dealers I go to the darn things still cost money. Besides, am I missing something, hasn't the last 10 years taught publications that the cost of creating content and distributing it free on websites outweighs the revenue that can be generated by online ads of any form? On some level it is supply and demand- online advertisers are buying traffic and there are so many online opportunities that supply online has far outstripped demand, thereby deflating ad rates and that will make it tough for originally produced free content to be paid for entirely by paid advertising anytime in the near future.
If you disagree with me and want to read more of the "give-it-away-free-because-someday-traffic-will-result-in-revenue" philosophy go to the SNA's website, here.
By Deb Shaw
Editor, Suburban Publisher
While the news media industry has spent the last few years reeling from the financial pitfalls of the economic meltdown, declining readership and plummeting advertising revenues, small dailies and community weeklies have proved profitable, and are, increasingly, the dominant source for local coverage.
So concludes The Pew Research Center’s Project for Excellence in Journalism’s State of the News Media 2010 report, covering two areas that are of particular interest to SNA members — Newspapers and Online.
As expected, the report reveals the challenging economic state of the newspaper industry, and paints a stark picture of the woeful economic realities at many metro newspapers. However, it points out that smaller, suburban and community newspapers are faring much better economically.
“The problems are not uniform across the industry. Big-city papers continue to have the worst of it in these difficult times. Small dailies and community weeklies, with the exception of some that are badly positioned or badly managed, still do better. The latter come closer to the late-20th century position of newspapers as the dominant source for local information and the place for local merchants to advertiseAnother noteworthy finding relates to online news consumption and pay walls. Any publisher thinking of erecting a pay wall should consider that, according to the report, just 7% of Americans express any willingness to pay for news content. Instead, large majorities said they would look for content elsewhere if their favorite site put up a pay wall.
In addition, the report addresses social media (now firmly established as part of the media ecosystem), citizen news sites (most are not in a position to take on the job of traditional news outlets), blogging (it’s declining) and user habits relative to news consumption (we’ve become grazers — on a typical day, nearly half of Americans now get news from four to six different platforms).
The entire report is available, free of charge, at www.stateofthemedia.org
Mediabids works with Marchex on a few per-inquiry advertising campaigns, so if you are a publication who runs PI ads, you may have contributed to their success.
ADOTAS –
So I’m walking along, minding my own business, when suddenly my iPhone
starts making a weird sound — kinda like a marimba. It’s not the sound
for a text message, Facebook update or a new email, so I’m a little
frightened. After I slink it out of my pocket, I’m confused when the
screen says, “Incoming call.”
A phone call? Wha? People still make them in the age of clicks and texts?
They certainly do, and Marchex has found that inbound phone calls convert at five times the rate of clicks. No wonder the company has launched a pay-for-call exchange, a performance-based call advertising service.
Marchex believes the pay-for-call market is about to explode due to the huge digital supply on a wealth of platforms and innovations in technology that cost-effectively serve, track, optimize and filter phone calls. In addition, advertisers can now glean far more user information from calls including geographic and demographic data.
The pay-for-call exchange — which spreads across 50 offline, online and mobile publisher partnerships — provides both campaign creation tools and call-filtering technologies. In beta testing, average call conversions ranged from 20% to 30% while consumer engagement on the phone averaged more than eight minutes.
If the last decade of digital marketing revolved around online conversions via clicks, Marchex believes the next 10 will revolve around driving conversions through calls.
“Pay-for-call advertising is the natural next step in the evolution of performance media,” said Marchex Chief Operating Officer Pete Christothoulou. “It is the last mile for advertisers, literally connecting them to their prospective customers through the phone. Each iteration of advertising products and business models — from pay-per-view to pay-per-click to pay-per-conversation — brings advertisers closer to customers and the actual transaction while increasing efficiency and ROI.”
Newspapers continue to search for new and innovative cost cutting measures. Too bad they are not nearly as aggressive in reinvigorating their core product. My main example is my experience with Mediabids. We have been around for 10 years, more than 8,500 publications use us, we have sold tens of thousands of ads for publications and yet, nearly everyday, we have conversations with publications who are skeptical about the idea of using a website to sell newspaper and magazine advertising. Just yesterday, I spoke to a large publishing company who has gone through layoffs, product closings and downsizing in the last year and yet, despite their dire financial situation, are nonchalant about the opportunity to sell ads to the 17,000 advertisers who use Mediabids to buy print ads. Many print publications are not in the state they are in by accident.
From The Chicago Tribune. Full story here
The Chicago Tribune and other Tribune Co. newspapers plan to utilize as
little content from the Associated Press as practical during the week
of Nov. 8.
The goal, as the papers review costs and needs, is to
see whether severing ties with the news cooperative next fall is a
viable option, the Chicago-based media company confirmed Monday.
The
trial is scheduled to be conducted almost 13 months after Tribune Co.
gave the AP a required two-year warning that it might drop the news
service, effective Oct. 15, 2010. Tribune Co. said at the time that it was keeping its options open while weighing what role, if any, the AP would play in its future.
We deal with a lot of publications here at Mediabids on behalf of thousands of customers and, based on his earning statements, I don't think that McClatchy CEO Gary Pruitt understands what goes on at his own papers. In his earnings report Pruitt said that the digital side of his products was growing but that print upsells (a combination print and online buy) were dragging down earnings. I suspect there is some creative accounting going on to arrive at this conclusion. Publications will tell you (McClatchy publications included) that they can give enormous discounts on print but they have to keep the online rate card intact. So if you buy a combination for, let's say $1,000, you think you are pending $600 on print and $400 on online, but when they generate a bill they will make it $900 online and $100 print (I am using these numbers as an example but propotionally they are pretty accurate). That doesn't mean that the advertiser only wanted to spend $100 in print or that they would have spent $900 online but publications bill out in that way to give someone like Pruitt a happy story to tell. I hope they don't believe that advertisers are actually willing to pay their online rates without the print side discounts.
Here is part of the story, from paidcontent.org:
After
posting an online revenue decline of 2.9 percent in Q2, McClatchy (NYSE: MNI)
was able to reverse that trajectory to see digital revs rise 3.1 percent in Q3.
As print continues to decline—and McClatchy chairman and CEO Gary Pruitt didn’t
surprise anyone on the Sacramento company’s earnings call by saying print would
fall further in Q4—online is showing signs of more stability and, most
importantly, more independence from print. “As online grows, we’re less
vulnerable to print declines and we’ll be less burdened by print costs,” Pruitt
said.
Unfortunately for McClatchy this time out, print upsells remained a particular drag on its web ads. Pruitt told investors that a little less than half of McClatchy’s web ads are pure online sales, not tied to print. It’s hard to say if it’s improved online sales on its own—plus its 14.4 percent stake in web recruiter CareerBuilder—or the decline of print, but just over 50 percent of McClatchy’s online help wanted revenues are directly from the web. Once the economy rebounds, that tilt in favor of online and away from print is expected to accelerate.
Full story here
As a follow up to our diatribe yesterday on BusinessWeek consider this typically snarky comment from AdAge:
"Why the persistent drop for the business bibles? Business-to-business advertisers have found many more efficient, targeted ways to reach their customers. Brand campaigns remain an important component of their marketing, but they've also gotten much better at maintaining databases of the crucial decision makers who buy their products or services, focusing on preserving their loyalty and contacting them more or less directly than through a major magazine ad buy."
If you are in print - newspapers or magazines - this comment should really bug you. The author, Nat Ives, is wrong about the potential for print publications to generate response for non-branding campaigns but he is expressing a sentiment which is common in the advertising world. In other words, the advertisers you covet think he is right about magazines being a branding advertising medium. Further proof, that if print publications don't start proving response to their customers using any number of rudimentary tracking mechanisms (800#s, text addresses, unique urls), no one will.
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