The Modern Journalist

7 Ways Your Newspaper Can Make Money Online

The past few days have been interesting. I’ve been discussing the future of journalism with former reporters, reporters and editors. And without exception, each one has posited this statement, in some form: I’m tired of hearing about money and business; I didn’t become a reporter for that.

That statement floors me every time I hear it. Maybe I’m just weird that way, but I’ve always wanted — demanded – to know how the business operates because I know if I understand that, I can find a way to get whatever project I want. You put together a rational business case, you win.

If you prefer t-shirt slogans, try this: if you exist in the black, people stay off your back.

With that in mind, I thought I’d share some basic ideas that I’ve either used — or tried to use — as I wasa building a daily, online news property.

Assumption 1:None of these are solutions unto themselves. A good CFO will tell you (I know, they’ve told me this): always have levels, multiple streams, that you can pull when one idea isn’t working.

Assumption 2: If banners and advertising are you key metric (along with page views and unique viewers), you are in serious trouble. Here’s why:

• In 2007, consumers spent $160 billion buying products and services online in 2007, a 17 percent increase from 2006.
• In 2007, companies spent $21 billion for online advertising (pdf), a 26 percent increase from 2006.

In other words, the market for selling goods and services is eight times larger than the online advertising market. That gap is only going to grow wider. If you want to make money, you need to find a way to sell goods and services while stabilizing the small banner ad market.

Call it my 50-state strategy. Here are my suggestions:

Sell books, photos and videos: The greatest asset any newspaper has is its archive of content. With on-demand technologies being what they are today, there’s no reason for newspapers not to have an on-demand publishing company. How much does that cost? It costs whatever the going rate for a good graphic designer and a content/copy editor is in your area. How difficult is it? Not at all.

Companies such as Lightning Source, which is part of the largest book distributor in the country, give very detailed specs for the books. There is a vetting process, ensuring that only high-quality books make it to market, just like there is in the publishing world.

Local papers, such as my hometown Cincinnati Enquirer, should have a series of books that come out each year on: The Cincinnati Reds, The Cincinnati Bengals, The Cincinnati Bearcats and Xavier University basketball teams (and maybe now the Bearcat football team), Tall Stacks, Oktoberfest, East Side v West Side (A Year in Review) and The Flying Pig Marathon just to name a few. Hell, you could have a high school baseball and football book each year (which would only mean something if you lived here and understood how important sports, high schools, neighborhoods and sports are. And for the record: East Side, Loveland High School, baseball).

Videos: Since everyone is clamoring for videos, newspapers should be thinking about having companion DVDs for their books; or maybe even stand-alones. The minute The Ohio State Buckeyes won the national championship in football, the very first thing I did was order the national championship DVD. With all the events happening in towns — and all the video purportedly being shot — there’s no reason not to offer up the opportunity to get a nice, edited DVD.

Classified Marketplace: One idea that I totally crapped on at Technology Review, which is retrospect is yet another goofball choice, was The Marketplace. If you’re going to sell goods and services, putting together a section on the site that’s customized directly for an advertiser. With software tools, it would be easy to build an entire site (a series of sites) that have feeds from other sources, content from the site (not produced for — simply pulled from), an ecommerce platform or a mechanism for contact, the latest specials and deals.

Newspapers need to replace classified advertising, but they aren’t going to outdo Craigslist. However, you can run RSS feeds from Craigslist to a microsite created for an advertiser to add more content. If people know they can come to a Marketplace for information, it’s a much more valuable proposition — particularly if integrated with search.

Target Newsletters: The editors at Technology Review hated this idea, but the biggest ROI we had on any product was the MIT Insider newsletter, which chronicled what was happening inside the labs at the university. So many cool things were going on. We had people pay yearly subscriptions for the PDF newsletter; I wanted to build a fully-functioning, password protected site to extract more value — but the required hiring a full-time editor. Maybe that was a bad idea. But the number of universities and other such places in your town give you the opportunity — if you market it — to make money with these.

It’s not news exactly, but it was subscriber funded — which meant that much-hated advertising was avoided (although I, and the marketing person, always felt like each issue should be sponsored by a company. Or that we should do a deal with a large company, interested in this news, and give everyone in the company a free issue. You know, like marketing.)

Spotlights: Most archives sit untouched (unless you’re publishing books), which is bad. We decided to find the topic areas we covered most at Technology Review and create a robust archive, featured on the index page, to pitch as sponsorships to advertisers. Instead of creating ad-specific content (bad) we resold what we’d written, drove traffic to it and made money off “dead” content.

Social Networks and Conferences: This is a hybrid idea from my days at Technology Review. I’m a big believer in creating social networks on your site, using MeetUp to encourage people to meet outside and then finding ways to hook those people up with advertisers. Nobody exactly knows how to monetize a crowd, but our marketing director had a great idea. If we can find clusters of people (and that’s what the Web is good for), we can hold monthly symposiums, have an advertiser sponsor the gathering and connect them with real people. That works particularly well if you can built a microsite into the deal, creating a multi-platform package.

Conferences and symposiums are big money makers. That’s what I’ve been told. Of course, you need to dedicate a community manager and a marketing person to the cause to build — and then monetize — the idea.

Circulation: This one seems confounding particularly in light of the dreary numbers for readers. But the problem is actually quite simple. If you make your online and print property the same property, people will gravitate towards the easiest one (and if your online readership is smaller than your print readership — uh oh). I told my boss very early on at my job that if I needed his magazine content to build a successful online business, he should fire me (he did not). Our idea was simple: the online becomes the up-to-the minute, multiple media, social aspect of the comapny; the magazine was the longer-form think pieces; and the conference was the in-real-life social aspect.

We put some magazine content up (they may put it all up now), but it’s behind a registration wall. I wouldn’t even be surprised if it was partially behind a subscription wall (we moved things back and forth, I know). The idea being each of these is a distinct part of the company. You get a different experience from each — although they were produced by the same editorial staff so we didn’t have two voices.

If you make one product, you will sell one product; if you make two products that sound two different ways (and that’s many publications today), you will reach decidedly different groups. Advertisers hate that.

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The best part: you now have a suite of offerings — a menu — that advertisers can pick and choose from based upon what they are looking for; you can approach local advertisers (the bane of local newspapers online) with services to sell them. You can set pricing based upon your audience — which increases your chance of selling.

You have, as my old CFO and COO said, levers to pull. If one product isn’t working, you can shift resources while you re-tool it without wonking your bottom line. (And we haven’t even gotten into user-generated content, investigative journalism, ect).