News Leadership 3.0

January 15, 2009

Who says news won’t pay?

Rich Gordon offers an excellent list of steps news organizations can take to improve their revenues

Medill’s Rich Gordon offers one of the bests lists I’ve seen of actions news organizations can take to set the financial ship right. Writing on Poynter’s E-Media Tidbits, Gordon writes:

But amid the current journalistic gloom and doom, I can see the outlines of a successful business model emerging, if news organizations would consider these options:

  * Challenge cherished traditions that news organizations can no longer afford. The Detroit newspapers, for instance, have decided not to home-deliver print editions if there’s not enough ad revenue to pay for distribution. Is that a crazy idea? It certainly seems less crazy than cutting the investment in original reporting.

  * Adopt new technologies and workflows to make news production more efficient. Many traditional news organizations have redundant production processes for their traditional (print or broadcast) product and the Web. These must be consolidated.

  * Distribute professionally created content through as many channels as possible. Stories must go out in print, on the air, online, via mobile technology—and yes, on the Kindle or another “iTunes for news.” When appropriate, news organizations could share the cost of content creation with other news organizations. The Miami Herald and Poynter’s St. Petersburg (Fla.) Times, for instance, already collaborate to pay for coverage of the Florida state capital.

  * Adopt practices to increase the loyalty of online audience. Despite their financial challenges, traditional news organizations have been very slow to adopt blogging, permalinking, article commenting, social networking and other approaches that are proven to bring repeat usage. The average user of a news site spends less than two minutes per day there; it’s no wonder there’s not enough revenue!

  * Improve online ad sales and targeting. Borrell Associates reports that top-performing local media Web sites generate two or more times the revenue of the average site. The Interactive Advertising Bureau reported last year [PDF] that publishers can earn 10 to 16 times as much money by directly selling an online ad themselves as by turning the ad over to a national ad network. And highly targeted online ads—now becoming possible through advanced behavioral targeting—can yield even greater revenue. (For more on this point, stand by for an upcoming report on online ad networks, which I’m editing right now for Northwestern University’s Media Management Center.)

I think the last two points represent particular opportunities. As I noted earlier, a report by the Bivings Group, lamented the lack of adoption of social networking functions on mainstream news sites. As Gordon notes, these features may be key to increasing user engagement and time spent on site.

As to the final point, the Web advertising may be more challenging in the technology and in the sell than print ads, but that doesn’t mean there is not unrealized revenue out there. I’m looking forward to seeing Gordon’s report and I’ll link to it from here.

Here’s Gordon’s full post, “Is an ‘iTunes for News’ Possible?

What do you think about the potential to increase ad revenues by growing user engagement and developing more sophisticated targeting? Please share your ideas in the comments.

 

 

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Exploring innovation, transformation and leadership in a new ecosystem of news, by journalist and change advocate Michele McLellan.

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