BlackBox Media Industry News and Commentary


 

Digital Newspapers…Stand Your Ground and Continue to Grow e-Commerce

October 4th, 2012

I haven’t posted to this space in a few years.  Saying there’s no time is a lame excuse given all that has been happening in the world, our industry and travails of newspapers in particular.  

 What inspired me to peek out from under my rock was a recent Media Post article by Jonty Kelt from ”across the pond”.   He outlines reasons why glimmers of optimism might be starting to emanate from the newspaper industry.  Fact is,  print has been irreparably damaged but the e-commerce centric models being tested on the digital side are showing great promise to take up at least some of the slack.  

The gleeful chorus of digital pundits predicting that social media would mean the death knell of newspapers, rallying around the “content needs to be free” flag.  Years later, most of what social media has accomplished is to prove that you get what you pay for. Meanwhile, newspapers from the venerable NY Times to the Minneapolis Star Tribune are executing e-commerce based business models that show promise to demonstrate the power of local brands in the markets they serve.

Media Post

Beyond Ads: How Newspapers Survive In Digital by Jonty Kelt, Sep 28, 2012
Over the past few years, the pendulum has swung from the newspaper industry writing its own obituary to a new — and what some might say is surprising — trend: bullishness. When analysts recently expressed concerns about the future of his papers, Rupert Murdoch responded by saying: “The answer is one word: digital. News is the most valuable commodity in the world, even if fewer people are buying printed papers on crushed wood.”

This new optimism has emerged alongside some dire trends. The hope that print ad revenue might rebound (or at the very least, plateau) has passed. Print ad revenues are half of what they were in 2006) a reflection of the steep decline in freestanding inserts’ revenue and circulation. So, too, has unceremoniously ended the decade-long battle to see if online advertising can make up the shortfall.

The source of the increasing bullishness, as suggested in Murdoch’s comment, is simple: newspapers — as trusted sources of news and recommendations for local audiences — have begun to understand how to leverage their unique position at the nexus of digital content and commerce. Rather than simply relying on revenue from an ad unit to send a consumer to another Web site, newspapers have begun to realize that they themselves possess all the necessary resources to own the entire e-commerce transaction.

By operating full-scale e-commerce programs and developing digital relationships with retailers (who are increasingly looking to go direct-to-consumer), newspapers come one step closer to a digital equivalent to a freestanding insert, driving consumers to purchase a retailer’s product directly on the newspaper’s domain. Here, an old model is made new, with the newspaper digitally serving the classic function of a freestanding insert, but also supporting the click-to-purchase component as well. In short, this isn’t just a patchwork model hoping to compensate for the loss of print revenues — à la online advertising — this is a superior, more profitable model.

Moreover, newspapers are beginning to use e-commerce programs to take a large chunk of the local e-commerce services market, a space rapidly developed by businesses like Groupon and LivingSocial. Local merchants, however, have become wary of working with some of these larger B2C providers and are turning to trusted local papers for more scalable, distributive reach and better brand affiliation. A number of leading newspapers, including The New York Times, The Minneapolis Star-Tribune, and others, are already seeing real returns through this approach. According to Arthur Sulzberger, Jr. in the New York Times Corporation’s latest earnings report the Times have made “significant progress over the past year in growing our new consumer revenue stream. We believe there is more opportunity for further growth in this revenue stream and our subscriber count.” So, it’s not particularly surprising that forward-thinking analysts see real hope for the newsroom.

Adding to the surge of optimism is the fact that the market is growing. Consumers have become more and more comfortable with buying online. Despite its widespread adoption, convenience, and value, e-commerce still represents approximately 5% of all retail commerce, so there’s room for opportunity and growth.

Today, that 5% represents a $240 billion market in the U.S. alone. As this e-commerce pie grows, newspapers are uniquely positioned to sustain the future of their businesses with it, potentially supporting a back-to-the-future vision of full, vibrant newsrooms, where journalists are well-compensated.

While newspapers will maintain revenue streams from advertising (both online and offline) and paywalls, it’s not enough. These new monetization opportunities in the digital space will provide a critical mechanism to help these papers not only survive, but thrive.

Warren Buffett, having directed Berkshire Hathaway in the purchase of over 66 local and community newspapers over the past few years, sees a huge opportunity in this space, and has challenged the newspaper industry to begin to explore new revenue opportunities, saying: “We want your best thinking as we work out the blend of digital and print that will attract both the audience and the revenue we need.” That thinking has arrived — and it has come in the form of e-commerce.

Read more: http://www.mediapost.com/publications/article/183352/beyond-ads-how-newspapers-survive-in-digital.html#ixzz28J7qEhSahttp://www.mediapost.com/publications/article/183352/beyond-ads-how-newspapers-survive-in-digital.html#ixzz28B9bTwOA

The perils of ad-supported social media…

January 5th, 2010

The Perils of Ad Supported Social Media -

iMedia Connections Newsletter  - 1/4/2010 

Recent Articles…

October 21st, 2009

Given the whirlwind of media evolution that passes for normalcy these days, I thought it would be helpful to dust off some of the articles I have written over the past two years which you might find relevant in addressing the issues we face today.   My core belief is that you don’t have to reinvent the wheel to come up with a better solution.  It just might be in re-configuring what you already have in hand.  With a few emerging media tweaks, what’s old may indeed be new.  As always, keep those cards and letters coming.

Out of the Ashes Comes Opportunity, But It’s Not What You Think - Internet Oldtimers Foundation - 8/08

May You Live in Interesting Times….Blessing or Curse…It’s up to you! - Ideas Magazine Emerging Platforms Column (INMA) -5/07

For Quality Engagement - Think Local - iMedia Media Planning and Buying Newsletter 8/06

The Salvation of Newspapers: Online Local News Networks?- AdvertisingAge by Randall Rothenberg 6/07 (PDF)

Cross Platform Sales is an Optimal Solution

May 7th, 2009

It used to be when a brand marketer or agency executive started talking about “beyond the banner solutions” it usually meant, “what can you give me for free’ to lower the cost of your advertising.    Needless to say, the days of folding an online program into a print campaign as “value add” are pretty much over. 

 

The good news  is that, thanks to new and emerging forms of media, the palette of options available to create powerful and cost effective integrated programs is virtually limitless.  The trick is to have the discipline to fight the “kid in the candy store” impulse to eat everything in sight just because it looks good.  If done well, cross platform and integrated programs forge lasting strategic partnerships that meld the best aspects of your respective brand equities…both media and product/service.  The efficacy of your editorial voice is what drives trust, which is precisely what brand marketers want to tap into build brand equity and awareness. 

 

In these days where every ad dollar has to work harder, what better way to do it than to take advantage of all the assets at your finger tips.  I always find the KIS (keep it simple) approach best.  “Dinner and a movie”  is pretty straight forward.  You could place a trackable url into a print ad which leads to a jump page hosted by your site offering free popcorn if you sign up to review a movie through your mobile handset and post it on your site’s Entertainment Section.   Your popcorn and tickets can be waiting when you get to the theater because your handset already pinged the theater that you are coming.  Perhaps the same thing can be done with restaurant reviews which can give away free movie tickets for bringing in the coupon they print by coming to the same jump page.  This can create a viral circle which builds on itself organically with you at the hub. 

 

I know many of you are doing these types of initiatives already but it’s also time to connect the dots.  “Citizen Journalism” is not going to go away, but newspapers are in the unique position to harness it to become the hub of all things local.  Why should affinity groups need to go outside your borders to find what they need?  You basically create the source code for this social/viral/mobile bonanza and put it on your readers’ doorsteps or access it through their computer or mobile devices every day.    

 

The game is yours to win or lose and you have a very strong pitcher.  The article below outlines an initiative between Unilever and Time Inc. that demonstrates the power of these integrated programs…and this is just the tip of the iceberg.

 

I would also be happy to facilitate a “virtual” meeting via conference call of like-minded/non competitive BlackBox Media clients to compare notes and best practices.  Not being wholly altruistic, I wouldn’t mind if you as a group became the next case study…demonstrating how geographically disparate local media can work together to create powerful and forward thinking brand messaging for Fortune 500 companies.        

 

I welcome and encourage your feedback.

 

 

BrandWeek

Unilever Dines with Time

May 2, 2009

-By Elaine Wong

 Unilever is taking a seat at the table with Time Inc.’s “Dinner Tonight.” The food giant will advertise seven of its brands across the publisher’s popular franchise which runs monthly in Cooking Light and daily at MyRecipes.com.Under the agreement, Ragu, Hellmann’s, Country Crock, I Can’t Believe It’s Not Butter!, Wish-Bone, Knorr and Bertolli pasta sauces will be promoted across Time Inc.’s “Dinner Tonight” print, online and mobile properties.

The strategy is indicative of Unilever’s new approach in dealing with media partners. Like many in the packaged goods arena, Unilever has been challenging key publishing partners to take campaigns beyond their magazines.

Publishers must offer advertising solutions that thrive beyond the print world, said Unilever’s North American media director, Rob Master. “We tell them, ‘Don’t just come back with a bunch of insert pages.’ They have terrific assets,

whether it be mobile or digital, and we want to leverage those.”Unilever, likewise, wants to capitalize on the eat-at-home trend. An advertorial in this month’s issue of Cooking Light, for instance, positions Ragu as a key ingredient in a recipe called “Mama’s best ever spaghetti & meatballs.” Opposite is a full-page ad for Ragu that reads: “Spaghetti and meatballs for less than two dollars a serving? With Ragu, your kids get more than a full serving of veggies that they’ll actually love to eat.”

Issues of Cooking Light also will include in-book, recipe-themed shopping lists.

Online, Cooking Light editors explain how to incorporate the brand into different recipes in a series of Web videos. Unilever products will be integrated into recipes on MyRecipes.com.

A mobile application launching this week allows consumers to browse more than 30,000 recipes across MyRecipes.com.

Meal solutions incorporating Ragu will be integrated into the mobile database later this month. For example, when a consumer searches for a dinner involving spaghetti, a related Ragu recipe may pop up. “It’s essentially a product placement, a perfect fit for consumers looking for recipes with sauce associated with them,” said Steve Zales, Time Inc.’s lifestyle group’s digital president.

Both companies say it’s the first time either of them has collaborated with an advertising partner to this extent. Zales calls it the “first fully integrated sponsorship of a [media] property” for his lifestyle division, which was formed last fall.

The concept, though, is hardly new. Suzanne Grimes, president of Reader’s Digest Association’s Food & Entertaining division, for instance, formed an in-house sales and marketing team specifically to create these kinds of integrated efforts. “Their sole purpose is to leverage multiplatform opportunities for clients, and we specialize in consumer packaged goods companies,” she said of the group’s function.

General Mills, for example, ran an integrated campaign across Reader’s Digest Association’s Every Day With Rachael Ray and Taste of Home food titles.

Following a 5.6 percent sales lift for Chex, General Mills has returned as a second-time sponsor, with a promotion timed for the June issue of Every Day With Rachael Ray and a digital campaign launching mid-May.

In this economy, Grimes said, “Smart marketers are demanding integrated solutions that meaningfully drive performance.”

  

 

Saving Newspapers in Bite Sized Chunks

March 18th, 2009

I sat on a panel at last week’s NAA Conference to discuss how online newspapers can maximize their advertising revenue.  We were asked to suggest solutions that the audience could take back to their publishers.   This struck me as an opportunity to put a sense of urgency into the attendees who may not otherwise take action.  

 No one doubts that the world will be a very different place when this conference next convenes in 2010.   Its not even the end of Q1 2009 and, in close succession, we’ve already seen the demise of two major market newspapers which have survived for over 100 years in Denver and Seattle.  Undoubtedly, this is not the end of it.   

I began my newspaper career about a dozen years ago…first with the Newspaper National Network on the newsprint side and the last 10 years online with a succession of companies that hosted newspaper web sites, sold them technology and represented their advertising space.   In all that time, I never actually worked at a newspaper.  My experience has remained at an industry level, first attempting to prove the branding capabilities of 4C newsprint advertising to the likes of P&G and Nestle and then doing the same for online newspapers.  To date, I have personally enjoyed a few pyrrhic victories but it is becomming sadly apparent that the war is being lost. 

The signs were there over a decade ago when Monster.com drilled through those seemingly impenetrable silos of the newsprint world and started siphoning off valuable Classified revenue.  Newsprint newspapers maintained the operational infrastructure to write, edit and hand deliver a media product to virtually every doorstep in America.  That is, until the Internet came along and made just about every aspect of this delivery system obsolete by enabling digital content to be delivered electronically directly to your home or office computer.  I would liken this to traditional media throwing a party, the Internet swoops in, absconds with all the guests to a cheaper yet more immediately gratifying soiree and sticks the newspaper industry with the check.   The write down of all that excess CapX capacity will be very painful. 

 So what does the newspaper industry do?  IMHO, re-tool and hold on for dear life to the one thing they still have that makes them unique….their local voice.   To that end, my suggestion to the NAA Conference audience was to go back to their newspapers and recommend starting with a blank piece of paper and figure out how they can better monetize against that one undeniable and incredibly valuable asset they have left.  

Listed below are a few of the suggestions we have made to BlackBox Media clients which we believe could help get the ball rolling in the right direction.  At the very least, they help form a baseline for collaboration beyond your own borders.  It is not possible to swallow a watermelon whole….it needs to be cut up into bite sized chunks.  Serious systemic issues still need to be addressed but perhaps these could start the conversation…

  • Research:  My apologies if I am being redundant, but newspapers must take a blank page approach in order to figure out what role they play in their readers lives and their relative value compared to the other media options available today.  The truth may not always be what you want to hear but media is nothing without an audience and you need to listen to what your readers want.   Bottom line, newspapers need to regain their prominance as the most trusted brand and primary conduit for local content in all its forms.  A shotgun approach won’t work.  With reliable research, you can be more linear and produce more tangible success metrics.  Executing on these initiatives in bite sized chunks will yield more sustainable victories.  And, by having the discipline to stay the course, you will attain your goals more quickly than throwing everything against the wall at once.        
  • Micro payments.  Through research, define what your readers like best that they can’t get anywhere else and then test to see if they would be willing to pay $0.05 or even $0.10 a day to get it online.  The side benefit would be creating more “premium” inventory that can be sold at a premium price.
  • Content Syndication:  Newspapers are woefully short on content in lifestyle categories that tend to be most valuable to advertisers like Personal Finance, Travel, Health and Parenting.  There are reasons why BusinessWeek.com can command $45-85 CPMs.  Of course, local news and sports remain a mainstay on newspaper web sites but they are readily available on a national level from many other sources and have basically been made a commodity.   There are a number of companies that offer quality lifestyle content that would pass the “editors test” which can be had for the cost of a rev share.  Incorporating some form of localized social media works particularly well in lifestyle categories.  The Indy Star’s Indymoms.com is a good example.   To succeed, these new content areas need to build a following and will require commitments to promote them heavily both online and in newsprint. 
  • Convergence:  You need to figure out how to more effectively sell the newsprint/online products in tandem.  Cross promote using a url in print ads or create a promotion that can only be entered online are just two examples.  I would strongly suggest working with your “frenemies” in the Broadcast TV who are suffering just as badly and have common online competition.  You might find enough common ground for a JV.  This has been done before in various markets.  For starters, TV is obviously a good source of video content.  
  • Mobile/Social:  More work needs to be done to figure out how to better monetize your mobile platform by linking your terrestrial site to mobile applications.  Same thing on the social side.  Conversations start local.  Be the conduit through which local affinity groups can find each other. 
  • Clean UI/Larger Ad Units: If your site looks like a pinball machine, there are probably too many ad units per page.  Don’t throw multiple units at the bottom the page just because you can.  The benefit is NOT linear.  Stuffing ad units wherever they will fit only serves to dilute your site’s ability to drive brand recall and ROI.  Banners and buttons are long gone and even leaderboards, squares wide towers, although standardized are now becoming too ubiquitous to have much impact.  Test 1/2 page units…they are more like a newsprint reader experience, expanding ads can provide multiple touch points for interaction like an “advertorial”.  Bottom line, incorporate any unit in a non-cluttered environment that will make the advertiser stand out and then pre/post test to provide definitive results.       

These are a few topics and I am sure there are many more that can work as stand alones or in tandem.  If you are already doing these initiatives…figure out how to do them better.  If you are not…get started.  A strategic plan cannot work unless you plot out each step along the way with milestones to check your progress against your goals. 

It’s the 4th quarter, 4th and goal with :30 left on the clock and you are trailing by 5 points.  This is gut check time and things need to get done. I am looking for a reaction so please, punch my lights our or just say thanks but please take action..NOW.  The clock is ticking. 

If you are interested in sharing what you have found effective and want to hear what others are doing, let me know and we’ll assemble a group of like-minded industry leaders to compare notes…but only after rock solid NDA’s have been signed by all. 

Keep those thoughts and comments coming! 

David Teitler - CEO, BlackBox Media

How will the Age of Disruption be viewed by history?

March 14th, 2009

The last time I posted to the BlackBox blog was 11/07.   At that time, the Dow was pushing 13,000, the real estate market was still booming and some investors still had interest in buying newspapers.  Oh yes, an African American was elected as our Commander and Chief about 40 years after a person of color could legally be denied basic human rights just across the Potomac.   Other than that, nothing much has changed.  

I have always been a Thomas Friedman fan but he really nailed it in his Op-Ed in the NY Times 3/7 where he cites Paul Gilding’s book “The Great Disruption”.  He basically states that our global economic system is, simply stated, unsustainable and that there had to be an inflection point where a correction, or as he puts it, a “disruption” occurs.  He states that 2008 will be looked at by historians as that inflection point where the world was hit it the head by a 2×4, and while still staggering, we are already starting to come to our senses about what needs to change NOW before we do permanent damage to the world we live in from an economic and environmental standpoint on a global scale.  

There is a great deal of cautious optimism in this line of thought because perhaps all things needed to implode before they could be made better.  Gilder writes…”When we look back, 2008 will be a momentous year in human history. Our children and grandchildren will ask us, ‘What was it like? What were you doing when it started to fall apart? What did you think? What did you do?’  Often in the middle of something momentous, we can’t see its significance. But for me there is no doubt: 2008 will be the marker - the year when ‘The Great Disruption’ began.”

I lay no claim to be a paragon or proxy for anything but I would like to think that our efforts at BlackBox Media might some day be viewed as playing a role, no matter how infinitesimal, of being part of the solution that preserved newspaper’s role in our society as we know it.  The newspaper industry will undoubtedly be very different from how it went in to this miasma but I am hopeful that its relevance and the vital role it plays in free society will not be diminished.   

With the issues faced not only by newspapers but all traditional local media coming to a head, I find it interesting that the very people who seemed so eager to hasten their demise now defends them.  IMHO, the realization finally hit that if the newspaper industry was further crippled or if major metropolitan newspapers start going away, where would the “free” internet press get credible unbiased news? 

Could it be that all the online “disintermediatarians” need newspapers to survive?  I don’t have that answer but would like to think that a society without unbiased editorial content could easily become “tribal”…where everything like them is good and anything different s bad.  That would not only be sad but I don’t want to think where that leads if you follow that path through to its logical evolution. 

If you’ve gotten this far, I must have struck a chord.  I would be interested in hearing from you.  Fire when ready!  

Regards,

David A. Teitler - CEO BlackBox Media  

 http://technorati.com/claim/wdbatuj5r” rel=”me”>Technorati Profile       

With all the changes…content is king

November 20th, 2007

For Quality Engagement/Think Local

Welcome to BlackBox Media!  We look forward to hearing your input, thoughts and insights into what we do and how we can work together.    Before starting my first post, I thought to re-read an article I had written a little over a year ago on the value of local media and markets for perspective…see live link to “For Quality Engagement” above.   What struck me was how much has transpired, which made me wonder how 2007 will be remembered years from now.      With about 25 years of media, marketing and sales experience under my belt, I lived through a time when paradigm shifts took at least a decade.  It took Cable TV at least that amount of time to hit 33% household penetration before it was considered viable as an ad supported “medium.”  Now, new “paradigms” seem to be shifting every 3 months or so.    There is no question that the internet has fundamentally altered the way we interact with and consume media but will 2007 be remembered as the year that forever changed life as we know it?   As I will elaborate, it depends on what happens next.   From a media and consumer behavior perspective, 2007 will probably be viewed as the year the walls came tumbling down.   CGC revolutionized communication and unleashed a virtual tsunami of content.  In 2007, the internet became a conduit through which anyone can communicate with rest of the world in real time.    This unfettered creative freedom will usher in an era of communication that is uncharted in modern media history.  It also raises a lot of questions…can it be managed, should it be managed and if so, how?  What is the role of traditional media in this new media juggernaut?  Will it be subsumed by it or be empowered to create a new golden era?    IMHO…while the rules have been re-written, the fundamentals will remain intact.  The old adage, “content is king” has been overlooked but will become increasingly relevant in this brave new world.  All media, traditional or online, is a blank screen without it.  Google has created the most efficient media buying machine ever ideated but with all the change, it’s a way station not a destination.  CGC has provided the opportunity for affinity groups to find each other and converse without geographical boundaries but will it replace editors and reporting?  The growing ubiquity of broadband has added sight, sound and motion to the CGC revolution.  But, while two people with a video camera can be hilarious, will it replace the entertainment value of TV or movies?  The resources required to create consistent quality entertainment or to verify, quantify and separate truth from innuendo is not insignificant.   

My point is not to get on a constitutional soapbox, but to say that content may be free but you get what you pay for.  The incredibly robust profit margins of most traditional media companies will be severely challenged but they will survive.   They are making good strides in finding ways to participate in the digital revolution by leveraging the asset that keeps them in business…content.   Evolving more efficient distribution will be their challenge.  Traditional distribution is costly, so increased utilization of digital will help drive tremendous ecomonies of scale, leaving more money for content. 

 Social networking is here to stay and is a wonderful piece of media evolution.  FaceBook and MySpace have given us reason to believe that there might even be a robust business model behind it as well.  But, using the personal information that is volunteered to “profile” users is already under fire in Washington and by consumers.  The miracle of the internet is also its curse.  As fast as it rises, so it seems it can fall.    I believe that social networking and CGC will find its place in a permission based environment but trust must be built over time….kind of like a newspaper or magazine web site.  TV is a more visual and entertainment based medium and will probably evolve over time to be  YouTube on steroids.    Free content will continue to intermingle with paid…whether paid through commercials, subscriptions or both.  But, there will continue to be a choice.  And, traditional media has got to figure out how to entertain without bombarding consumers into numbness with commercial messages.  What is old is new…the sponsored content model has been around since the earliest days of TV.    Technology has taken us a long way.  Perhaps we should take a break from pushing new technology and go back to our roots and re-discover the value in what made media so popular…content.  History does tend to be cyclical.    So, what do you think?     http://technorati.com/claim/wdbatuj5r” rel=”me”>Technorati Profile       


 
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