News Leadership 3.0

June 18, 2009

A new revenue agenda for news organizations

Paul Gillin urges news organizations to re-invent their business model by becoming more service-oriented, seeking more small, local advertising accounts, and changing the game on Craigslist

Paul Gillin provided a hopeful - and challenging - revenue agenda for money-starved news organizations during his KDMC/NewsU Webinar “New Revenue for News Organizations.”

It is hopeful because Gillin believes local news organizations can use their local ties and expertise to serve residents and businesses and get paid for services.

It is challenging because news organizations must first give up the notion that advertising will come back in a big way or that they can charge for non-specialized content that’s available for free.

People who ask how to monetize their Web sites need to change their approach, he said. “Your opportunity really is monetizing your audience, monetizing your brand.”

Here’s a pdf of Paul’s presentation slides. A replay of his presentation, including audio, will be posted at NewsU by the end of the week and I will add the link to this post. UPDATE: Webinar replay ($24.95 at NewsU).

Focus advertising efforts on small, local accounts

The advertising market has become more efficient with the Internet and institutions that relied on inefficient mass advertising are hurting because of that.

“The advertising world will never be the same again,” Gillin said. “The question is not ‘How do we get it back?’ It’s not coming back. The question is how do we change the model?”

News organizations can better serve a $25 billion local advertising market that relies heavily on primitive means such as Yellow Pages advertising, signage and fliers. “Whole classes of business are not now effectively reaching their customers and need help in advertising more efficiently,” Gillin said.

“You’ve got to change your sales model away from large national contracts towards much smaller but more numerous local contracts. I’m not saying this is easy but this is where the opportunity appears to be right now.”

Do more than Craigslist with classifieds

Gillin cited the work of Reinventing Classifieds, saying news organizations cannot beat Craigslist at its game, but it can reinvent classifieds to provide more services than Craigslist.

For example, Craigslist does not enable users to compare offerings side by side or to rate products. It also doesn’t offer customers advice on effective advertising and marketing.

“Craigslist is not the be all and end all of classified advertising. I think there’s a lot Craigslist doesn’t do very well. So you can tap into classified with an eye to Craigslist’s weaknesses.”

Diversify the revenue stream by taking a service approach

Gillin says opportunity also lies in developing relationships with local consumers and businesses and figuring out how to save them time and money.

That might mean helping businesses organize and market events to sell their products, facilitating transactions (such as ticket sales) in exchange for a cut of the transaction, developing databases that save users time and money when they make consumer decisions such as buying a house in the local market.

News organizations also might offer memberships that entitle members special access to events and services.

If consumers are unlikely to pay for comment, they will pay for value-added information, Gillin said. That’s why the Wall Street Journal, Consumer Reports and Cooks Illustrated can charge - they save people significant time, energy and cost to research issues that are important to them.
Consumers will only pay for content with a “high level of perceived value. You can’t sell subscriptions to a commodity” that is widely available and often free.

By Michele McLellan, 06/18/09 at 1:34 am
Posted in 09 Class: Using Social Media to Build Audience | Advertising | Audience development | Business model Comments (0) • Permalink • Tell-a-Friend