As the newspaper industry realizes its online potential, ad networks can target audiences where media revenue is most likely to flow.
Some of the best, most edifying and compelling television I have watched has been the buzz in our industry as of late. If you've been watching the series on PBS' Frontline called "News War," then you probably agree.
The Frontline four-part series has been running and re-running across the U.S. and streaming from the PBS website. I won't go into each of the four segments, just the one on the newspaper industry. With the seeming proliferation of ad networks in our industry, the recovery of digital newspapers seems to be getting lost in the shuffle. But after the dust clears and many of the newer networks have been consolidated, who do you think will remain?
Where does the content on your network come from?
The many challenges and obstacles the newspaper industry faces as it attempts to restructure its economic model for the internet age have been chronicled by every media outlet, so I won't belabor any of these points here. However, the newspaper industry remains unsurpassed in one major category: Newspapers are the driving force behind why Americans go online for news.
As the Frontline documentary reported, John Carroll, the former editor of the Los Angeles Times, estimates that 85 percent of the original reporting that is done in the U.S. is done first by newspapers.
In other words, everyone else riffs on the quality and accuracy of the journalists in the newspaper industry.
Dean Baquet, who succeeded Carroll as editor of the Times, agreed. "First off, if we disappeared tomorrow, most of the people who call us dinosaurs would disappear too," he said. "All the bloggers who exist to comment on us, the Googles and Yahoo!s that rely on what we cover in the Middle East, who rely on what we write about in California, and the nation, and Washington; they wouldn't exist if we didn't. Our economic model is, obviously, threatened. But if we disappeared tomorrow, they might have to reinvent something that looks like us."
Ultimately content is king
It's no secret the portals create very little, if any, original content. If you've ever visited a "content" section on a portal, you see the vast majority of the content comes from newspapers or newspaper-owned wire services such as the Associated Press. The most impressive thing the portals have done is create an advertising and economic model to siphon off advertising dollars from the consumers before they get to the editorial content they went online to read. This has placed a short-term revenue chokehold on the newspaper industry, but the hold seems to get weaker and weaker each year as online users become more sophisticated and go to the source of the journalism versus a watered down re-write by another entity.
As more branded marketers and regional advertisers shift dollars onto the internet, they're looking to be associated with well-respected publishing brands with original editorial content in vertically targeted sections (sports, entertainment, business, et cetera) in specific markets or regions that are important to them. The newspaper industry produces more of this content in a single day than the leading portals produce in a year.
This issue is magnified when it comes to local online marketing, which is predicted to be the fastest-growing segment of online growth in 2007. If an advertiser is looking to reach Boston, MA, what is the best option? Boston.com or reverse-IP targeting in the mail section of a portal or across unknown, low-quality sites in a blind or remnant network?
Obviously, the advertisement that appears on a site like Boston.com that carries a high-degree of affinity, appreciation and respect from online users in Boston is always the best route. But portals made buying local advertising so much easier than buying among numerous, disparate news outlets, and that is what has fomented the growth of so many networks.
Think of what a media buyer has to do in a compressed time frame. Networks are simply easier. The rise of blind, remnant networks is owed in part to the need for a one-stop shop like Yahoo, MSN or AOL.
Newspapers have had little choice but to make their content available for less in order to drive reach, which is perhaps the best value proposition they have in print. But the content generation engine that makes newspaper advertising work in print loses something when accessed through a portal. It loses its shirt!