Dealing with the elephant: Cutting ties to the legacy albatross

[Some time ago, I wrote a series of posts that attempted to address some of the revenue-related issues facing traditional news organizations and suggested some possible solutions to making incremental (and larger) changes that might help them stay profitable. For no good reason, I’m going to carry on the ill-advised, barely meaningful elephant metaphor (or is it a metaphor piggybacking on a cliché?) every now and then when I write something about the changing business models for news production and consumption.]

Zac Echola has posted an essay (it’s really longer and far more in-depth than the average blog post, although that’s par for Zac’s eloquent course) called “Cutting the cords, bridging the gap.”  It’s mostly about making serious changes to your news business to keep up, increase online revenue, and (crucial part here) decrease what I’d call your legacy expenses.  As in, print.  As in, outdated systems and vendors that aren’t geared toward

Here’s a long clip from early in the essay:

“Media companies must sever the bindings that drag business in the long run. Market fluidity, the key to the successes of the few that weather the coming storm, will only come through agility and unyielding focus on the future. Mammals didn’t inherit the Earth because the dinosaurs died. The dinosaurs’ extinction was a product of an outside force that lead to a more hospitable environment for mammals. Yes the majority of revenue comes from the ‘core’ print product, the ‘core’ broadcast product. But we aren’t in the ‘newspaper’ business. We aren’t in the ‘broadcast’ business. We are, by definition through ownership of web domains, in the information business. We’re in the advertising business. The medium is just that—a medium for passing information and advertising, connecting audience in search of information to business in search of audience. The Web is best suited to show measurable results to advertisers looking for ways to not spend advertising during a recession.”

Now, that’s the hook.  Zac goes on to explain — in far more detail than I have, with a lot of knowledge of precisely the sort of legacy systems, vendors, and thinking that forces the hands of news organizations and their corporate parents — some of the particular advertising-related problems facing the news business online and suggests a number of good solutions.

The hitch, because there always is one, is that doing the job right often requires doing it yourself.  At the scale of one newspaper that can logically pay a developer instead of three vendors, great, no problem. Done. But at the scale of a consolidated newspaper or broadcast company, perhaps it is more difficult to rationalize that change, depending greatly on the resources available, and the scale of the company.

Read Zac’s post and add your comments there, especially if you’re someone in a position to make changes like this in your organization.

Depressing bonus link: Alan Mutter details the financial problems of a newspaper company, answering common questions about stock prices, bankruptcy, and debt.  See also: Steve Yelvington calls it an “ownership crisis.”

Inspiring bonus link: Mark Glaser’s recent MediaShift post rounds up alternative and innovative business models for news.

Dealing with the elephant, elsewhere

Paul Bradshaw comes up with a list of 10 ways that ad sales people can save newspapers:

“…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).”

Daniel Victor calls for online news workers to stop playing the Underpants Gnome game:

“Basically, Web-savvy reporters right now are the Underpant Gnomes. We’re getting better at gathering the underpants, but we don’t know how to turn them into profit yet. That Web content is providing very little revenue now, and we don’t know how it’ll produce more revenue in the future.”

A few weeks ago at Idealab, MIT professor Chris Csikszentmihályi questioned the wisdom of looking for a “business model” at all:

“While the model in which a firm produces a product is common and viable, some of the biggest product success stories in recent history don’t actually come from businesses. That’s not to say that no one is making money from these products; there is plenty of green in these fields. But there isn’t a one-to-one mapping between business (in the sense of a firm) and product. These new products are generated under the alternate organization of knowledge, labor, and capital called the free software model.”

When the term “open-source news” has been thrown around in the past, it usually was related to what became a logic (if not exactly a movement) called Citizen Journalism. But what about the idea that the business of a news organization could be open-sourced? What does that even look like, organizationally speaking. And financially?

Things to continue to think about:

  1. Practical, iterative ways to work within today’s organizational structure to increase online advertising revenue.
  2. Getting the Webbiest brains in the newsroom to think about monetizing their work.
  3. What does a news business look like after we throw out the existing model and start fresh?

Dealing with the elephant: Build the software you need, then sell it.

This is the fourth post in a short series I’m pretty much done with about the business model for online news before I go back to my usual routine of pointing out the obvious to people wearing dark glasses.  The starting point, the givens in the equation, are listed here.  Suggest which windmill I should tilt at next using the Skribit widget in the sidebar of my blog while it’s still there.

elephant by droolcup on Flickr
“elephant” by droolcup on Flickr

There’s something funny about software for publishing online news.

Newspapers don’t develop it.

There’s an exception or two to that rule of course, but I hope I’ve force-fed you enough fine products at this point to hammer that exception home.  (I almost wish they had an affiliate program.)

But usually, instead of spending money to hire developers to build software to match the specifications of their own needs, newspapers and the companies that own them reach out the third-party vendors on a daily basis in order to provide basic functionality to online readers, consumers, and advertisers.

Follow along with me for a moment, substituting your own organization for the Royal We, in the parlance of our times:

  • Classifieds? Let someone else build it, sell it, and profit from it.  We won’t have much input into what they build for us, but we won’t need to worry about the servers or credit card processing.
  • Databases? If we know what to do with them, we certainly haven’t hired anyone who can build them with journalistic intent.  We outsource them, or we trust the one developer in the newsroom who knows what they’re doing to build a framework we can use more than once, or that we can use when they move on.
  • Calendars, content management systems, even project management tools? We seem to have been out sick from school on the day “vertical integration” was covered in AP Economics.

No, I wouldn’t recommend you drop everything you’re doing so you can re-invent the wheel, especially when some of those wheels are pretty darn good at filling your needs for a relatively small short-term price.

But yes, I heartily recommend you build an extensible Web application for the next unserved need in your organization.  Just pick any one of those that pops up in the next month or so, and go at it.

After you’ve launched it and earned the praise of your peers, slap a price tag on a license and get to work marketing it.

You’ve made a long-term investment by hiring developers.  The capital is coming back in the form of the application that’s useful to your organization; think of the license fees for the software as interest income.  You’ll be supporting the software for your own papers, anyway; might as well serve a few other organizations at the same time, for a price.

So ask yourself which software needs are going unmet in your own organization.  If you can’t find the right tool for the job, chances are, no one else can either.

A caveat: I’ve given out a lot of advice (some of it unsolicited) to newsrooms about using free, Web-based tools for online news production.  I still think that’s the right approach for many news-related purposes, but as soon as you find yourself paying for a mediocre service that’s part of your core business routine, it’s time to build something better.

Dealing with the elephant: Hire Web-native salespeople

This is the third post in a short series I’m going to write about the business model for online news before I go back to my usual habit of banging my head up against walls made out of giant rolls of newsprint.  The starting point, the givens in the equation, are listed here.  Suggest what I should throw my weight at next using the Skribit widget in the sidebar of my blog.

Elephant in the room, part deux. by Cody Simms on Flickr
Elephant in the room, part deux. by Cody Simms on Flickr

Perhaps you’ve read, once or twice, a screed that I or others have written about what sort of skills an entry-level reporter should have these days if they expect to get a job anywhere other than a community weekly. (Not that there’s anything wrong with that.)

The problem is, I don’t know if anyone has given your advertising department the same speech.

This is a crucial step in the incremental-growth projects I’m laying out here.

Because you can’t sell video business listings if your salespeople don’t know what’s going on in the online video world.  Because you can’t explain why your business directory looks so superior to search engines if you don’t read up on SEO.  Because you certainly can’t explain your local blog network to advertisers if you’re not familiar with the traffic and content and level of activity in the local blogosphere.  Because you can’t sell a fleet of niche social networks to advertisers if you can’t explain the value of the Long Tail.

The list goes on, full of things that should be obvious to news content producers at this point, but what about advertising content producers?

That’s right, you’re going to need sales reps who can produce content; I’m talking about something more than a graphic artist here.

Here’s what I’d be looking for in an ad sales rep if I were hiring one today:

  • Blogs and reads blogs.
  • Participates in social networks.
  • Knows how to shoot, edit, post video, and watches online video.
  • Has marketing skills beyond stickers and t-shirts.  Can make an engaging presentation in any format, whether it’s a handshake/smile/chat, Powerpoint, flip chart, or video conference.

And if you can’t find someone who can fill that role full-time, consider hiring a local videographer or small production house to put together advertising video from time to time.  Find a local partner and try to pay them (in part) with a sponsorship or advertising in trade.

When it comes to marketing, keep in mind that you, news producer, desperately need to get across to sales reps what it is that’s new, different, better, improved about your online product.

That means making presentations to them about new products, verticals, databases, and your fancy new content management system.  Yes, to be clear, I’m saying that you absolutely must get up from your desk and go stand in front of a room of advertising employees and explain to them why that mashup you just built is so cool, and what sort of advertisers you think might be interested.

Crazy, right? News and advertising working together?  Get used to it.  If you can’t find sales reps that understand what you’re working on, then you’ll need to consider going out on sales calls with them yourself.

That doesn’t mean you need to start memorizing rate cards and upselling, it means that you, person who built that awesome map with all the data overlays of crime, liquor store robberies, and standardized test scores, need to go tell the community (read as: the chamber of commerce, or the Elks, or the Rotary Club) why your project is so cool.

So get out there.  Hire people who can sell more than a banner ad.  Train your current reps to shoot and edit video.  Don’t skip over the advertising department when the new computers and cameras get ordered.  Write simple one-page summaries of the cool stuff you build online, and send it out to the whole department.

Hire like you mean it.

Hire a sales force for tomorrow’s product, not yesterday’s.

Dealing with the elephant: Incremental change

This is the second post in a short series I’m going to write about the business model for online news before I go back to my usual divisive blathering about how to avoid bureaucracy and feed trolls.  The starting point, the givens in the equation, are listed here.  Suggest what I should tackle next using the Skribit widget in the sidebar of my blog.

“Elephant Mud Frolic” by Intrepidation on Flickr.

If you read the post I wrote last week about building better business directories on news Web sites, you’ll notice a few things about the approach I’m taking to talking about the business model(s) for making money in online news:

  1. I’m not offering up some massive overhaul to the entire system of paid journalism at the moment, like taking newspapers non-profit, but there’s a lot to be said for that model, depending on how you feel about PBS or the BBC.
  2. What I’m making an attempt to focus on are incremental changes; ideally, these should be moves that can be put into action at your site quickly and effectively, without major staffing or organization overhauls, even though that might not be the worst idea.
  3. There are plenty of ideas floating around the Web that qualify as “little things” you can do to grow revenue on a news site, but I think somewhere in between the smallest things (like adding Google AdSense or other targeted text-link ads to all your ad positions) and the largest things (complete re-organization of the news industry), there’s a market for ideas that revolve around some of the medium-sized steps you can take to open new revenue streams that have little, if anything, to do with your print product.

For example, how about starting an ad network for local blogs?

It’s a simple equation:  Local bloggers have content; the local news organization has advertisers.  Keep it simple: Sell banner ad positions on the network as an upsell when an advertiser buys a spot on your news site.  “For $5 a month more, we can put your ad on a network of 25 local blogs with X average page views per month.”  Split the revenue with the bloggers 50/50 or come up with a formula based on page views.

Also, add a page featuring the latest headlines from the blog network to your news site.  For bonus points, keep an eye on that page and feature links to posts on relevant local blogs on article pages on a regular basis.  For super extra bonus points, throw up a Ning network for the local bloggers to give them a place to talk with each other directly.

So again, as with the business directory plan, you’ll find that running an ad network for local blogs involves the news and advertising sides of your organization actually communicating from time to time as you add new blogs to the network and award monthly revenue shares.

I’ve seen examples of local blog networks maintained by news organizations, and I’ve seen examples of advertising networks for higher traffic blogs, but has anyone tried what I’m pitching here?

Dealing with the elephant: Build a better business directory

This is the first in a short series I’m going to write about the business model for online news before I go back to my usual harangues at editors and rants at reporters, among others.  The starting point, the givens in the equation, are listed here.  Suggest what I should tackle next using the Skribit widget in the sidebar of my blog.

Product Placement: Elephant Car Wash by Ricardo Martins on Flickr
Product Placement: Elephant Car Wash by Ricardo Martins on Flickr

Let’s get down to business.

My goodness, do you pay a vendor for some sort of business directory full of aging addresses and phone numbers and little else?  Honestly, I know you do. And while some vendors might be better than others at keeping their data current and you (possibly) have some sort of forced upsell from print (see #2 here) that brings in a few dollars for each “featured” listing, you’re missing out on a boatload of revenue because the data is mediocre, and the presentation is always worse than that, with one notable exception.

I often throw the LJWorld’s Marketplace up as an example of a forward-thinking revenue stream.  Yes, it’s a business directory, but each listing comes complete with a graphic ad, video in some cases, hours, a locator map, and — here’s the important thing:  It’s easy for a local business owner to log in, claim their business, and update their own information.

That’s not some magical wonderful technology, it’s just taking advantage of the idea that a local business owner probably knows more than a cold-calling salesperson in a cube farm trying to verify data and upsell a “featured” listing.  As a bartender, I hung up on this sort of salesperson on a regular basis.

Make it dead simple for business owners to claim and update their listing.

Then, once they’re involved, maybe it’s time for a nice little online upsell.

When you sell a business a “featured” listing, really feature it!  Not just at the top of the list, but on your site’s home page, like at, and not just there, but on relevant section pages.  Targeting advertising to content should be obvious enough by now: The sporting goods store wants to advertise in your sports section online, just like it does in print.

I’m not talking about banner ads here.  Keep that in mind — image-based advertising is useful for branding, but you cannot live on CPM alone.  Unless you’re an absolutely massive major metro, you don’t have the inventory (read as: traffic) to sell.  Instead, you’re offering a business listing (with a higher price for bells and whistles like video, mind you) that includes high-powered text links from places like your news site’s home page to your advertiser’s domain.  Search engines love that stuff.

Once you have that database of engaged business owners, tagged with relevant categories and sections, you should have a ready made list of sales leads when it comes time for that annual high school football preview or that summer event package.

Steps to implementation:

  1. Start gathering information.  Choose the fields you want to include on your business listing pages.  Create a (free) simple web form using Google Docs, then start collecting data from your existing advertisers and local businesses. Act casual. You’ll be calling them back later once you have a prototype ready to show off and sell.
  2. Develop or purchase a better piece of business listing software.  I recommend Marketplace, or develop your own in Django if you’ve got the staff/chops. SEO is crucial here. If this step is financially or contractually hairy, consider whether your existing business listing provider’s software creates an XML feed of entries, or a CSV export, or something similar, in which case there might be some structured data in there that you can work with.  If all else fails, plan to hand-code the featured listings you’ll be selling on select pages.
  3. Start gathering content for businesses that are buying the bells and whistles.  You’ll want existing video if they have it, but a more likely scenario is that you’re going to need to send a human being to the business with a video camera.  It would help if you trained advertising salespeople to use a video camera — and even better, to edit and produce short pieces about businesses.  More about that in another post in this series as soon as I get to it.
  4. Roll out the targeted featured listings and your new directory.  Make it clear to advertisers that they can edit their own listings.  If a business is mentioned in a news story, link to the listing. Promote the new directory and point advertisers to the upgraded listings with video.  If you’ve chosen to let readers add ratings and reviews, promote that feature in print and online in any story that mentions the business.

Bonus Round:

Build a local database (or wiki?) of local questions and answers, and sell featured placement in those pages to the relevant businesses.  Lucas Grindley wrote about this idea recently (business plan and all) after Google’s Knol launched.  Mahalo is a better model for this purpose than either Knol or Wikipedia.  The goal should be a human-authored page that contains the answers to a common question about your town.

For example, in Santa Cruz, answer questions like “Where can I park for free downtown?” and “When is the Boardwalk open?” to really please actual readers looking for actual information.  It’s not hard to imagine the businesses on Pacific Ave. and Beach Street that would fight for the chance to sponsor those pages.

The local FAQ is fodder for a different post, and deserves some mockups and diagrams, too.  I’ll get to that shortly…

The business model is still the elephant in the room

As much fun as it is for me to make clever lists and shout from the hilltops about what I think your news organization should be doing, how they should be doing it, and why they should be doing it, no matter what argument I (or anyone else) has in favor of a certain technology or against a certain methodology, the broken business model of newspapers remains the giant elephant in the room.

Big 5 - Elephant by TheLizardQueen on Flickr
Big 5 – Elephant by TheLizardQueen on Flickr

Let’s start with a few different angles on the state of the news business.  I’m not saying that all of these are absolute truths, but I am saying that all of these angles lead to the same conclusion.

  • Print circulation is dropping, online readership is climbing.  We don’t yet know how best to turn online eyeballs into income.
  • Print advertising revenue is falling, online ad revenue is climbing, but the former is happening at a much faster pace than the latter.  We don’t yet know how best to turn online eyeballs (or community, or participation, for that matter) into income.
  • Regardless of what else we change about our print edition, or how we present information online, or how we reorganize our newsrooms, funding investigative and enterprise reporting must be part of the core mission of the industry.
  • The Web has disrupted the traditional relationships between print advertisers and their customers (and between print advertisers and newspapers) more than it has disrupted traditional relationships based on print newspaper content.  We need to find new ways to connect advertisers to consumers in a way that leads to profits for our organizations.

If you accept any of those points as a given, you come to the natural conclusion that the problem of working out new business models for news organizations needs our attention, and not just as an aside.

An Aside: I’m going to assume that it’s necessary for major metro newspapers to survive and thrive as news producers.  I don’t always believe that’s true, frankly, and there are any number of organizations getting started online, including folks doing critical investigative reporting, that could be part of the proof that this society has outgrown its need for newspapers as the “lifeblood of our democracy.”  That said, again, I’m going to assume — for now — that we need to save newspapers.

All this is just a fancy way to lay out a little plan I’ve been thinking about lately:

I’m not going to write any manifestology here for a while.  Instead, starting with my next post, I’ll explore some online news business model questions — and opportunities — for, say, ten posts or until I get bored with it.

Things I might write about:

  • News organizations as Web development shops
  • Building a better business directory
  • Relevant text link ads based on that better business directory
  • How to hire and train advertising salespeople who can produce content
  • Basic, incremental changes you can make today to start bringing in extra pennies

Please do add your suggestions in the comments, or use the Skribit suggestion box in the sidebar of my blog to vote on these first five bullet points.