BuzzMachine

The media pundit's pundit. Written by NYC insider Jeff Jarvis, BuzzMachine covers news, media, journalism, and politics.

Tag: newbiznews

  • Desperate times need desperate models

    10 comments on Desperate times need desperate models
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    One could make a blog with nothing but daily reports of bad news about newspapers.

    One could make another blog with suggestions for drastic measures that should be taken — even if as experiments — at every newspaper company in the country.

    The latest bad news is word that Journal Register, publisher of the New Haven Register and 21 other daily and 310 nondaily newspapers, could go bankrupt. The article argues that this is more a problem of debt service than operations — but then it goes on to say that “its operating performance has declined” with EBITDA expected to fall from $90 million to $70 million in a year.

    If I can get some money into a program at CUNY — and as part of a conference on new business models for news I’m holding there, probably now in September — I’m thinking about hiring MBAs to create drastic models of new newspaper businesses, such as:
    * The free newspaper — here’s an argument that the Guardian should go that way.
    * The online-only newspaper — that has happened in Madison.
    * Selling off printing, production, and distribution arms — as suggested by Dave Morgan.
    * Break them up into a bunch of niche products — as suggested by NewMediaBytes. That could mean selling the sports section separately (or making it online-only); it could mean turning out a whole bunch of products from golf to parenting to food.
    * Go hyperlocal.
    * Turn all the reporters into independent agents — as I sort of suggested here — and the newsroom and news product into just a packager and ad network.
    * Jettison everything but real reporting — which is a smaller proportion of an editorial budget than many would like to admit — and charge more for the product to a highly interested audience.
    * Distribute a local supplement inside national papers: USA Today, The Times, or the Journal.
    * Become a local magazine with an online component covering breaking news, local calendars, and such. (Except I think that local magazines are in as much trouble as local newspapers.)
    * Become an ad network.

    What else? Note that I did not suggest foundation or public support. I think that’s a pipedream. Journalism either is or isn’t a business. I think it is, but not like the one we have now. And we’d better get to reinventing it or it could well die. The Journal Register could just be the first.

    Whoop. Whoop. Whoop. That’s the alarm going off, newspaperfolk.

    : LATER: Note that the Britannica blog is holding a forum this week on the fate of newspapers. I’m looking forward to Clay Shirky’s call for experimentation.

  • Do I smell smoke? Is that a fiddle I hear?

    10 comments on Do I smell smoke? Is that a fiddle I hear?
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    The New York Times Monday media report completely buried the report of the worst newspaper ad revenue decline since 1950, when the NAA started measuring the number (which is to say, the worst decline ever). It’s on page C-7, given a mere four paragraphs. Granted, the news is a bit stale, having come out three days ago. Still, you’d think that the media section would have decided to give this more perspective.

    I think the proper perspective is that we are at a full-blown, slippery-slope, accelerating-fall, watch-out-below crisis for the newspaper industry and professional journalism with it. It’s time for drastic thinking.

  • Newspapers are f’ed

    31 comments on Newspapers are f’ed
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    Newspaper ad revenues have taken their worst drop in almost 60 years – worse even than 2001. E&P reports:

    According to new data released by the Newspaper Association of America, total print advertising revenue in 2007 plunged 9.4% to $42 billion compared to 2006 — the most severe percent decline since the association started measuring advertising expenditures in 1950.

    The drop-off points to an economic slowdown on top of the secular challenges faced by the industry. The second worst decline in advertising revenue occurred in 2001 when it fell 9.0%.

    Total advertising revenue in 2007 — including online revenue — decreased 7.9% to $45.3 billion compared to the prior year.

    There are signs that online revenue is beginning to slow as well. Internet ad revenue in 2007 grew 18.8% to $3.2 billion compared to 2006. In 2006, online ad revenue had soared 31.4% to $2.6 billion. In 2005, it jumped 31.4% to $2 billion.

    As newspaper Web sites generate more advertising revenue, the growth rate naturally slows.

    The NAA reported that online revenue now represents 7.5% of total newspaper ad revenue in 2007 compared to 5.7% in 2006.

    That growth could not stave off the losses in the print however. National print advertising revenue dropped 6.7% to $7 billion last year. Retail slipped 5% to $21 billion. Classified plunged 16.5% to $14.1 billion.

    “Even with the near-term challenges posed to print media by a more fragmented information environment and the economic headwinds facing all advertising media, newspapers publishers are continuing to drive strong revenue growth from their increasingly robust Web platforms,” John Sturm, president and CEO of the NAA, said in a statement.

    Is that called whistling in the wind? Or pissing in it? Man, that’s denial.

    Yes, some of this is as a result of the economic downturn, especially in real estate (and jobs will be next and cars after that and retail along for the ride down). But even when those segments rise again, newspapers will not — not — recover what they have lost. They lose doubly in a downturn: advertisers spend less because they have less and then they realize they can keep spending less. It’s a reverse plateau.

    The situation is desperate.

  • An open ad network opens for business

    6 comments on An open ad network opens for business
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    OpenX is building the start of a new, more open ad network infrastructure.

    My Guardian column this week starts with a recast of my blog post about Google Ad Manager and then breaks a wee bit of news:

    OpenX (nee OpenAds, nee phpAds) is putting together the elements of what I hope can become an open ad architecture that could compete with Google and create a more transparent marketplace that will support the creation of many more sites (I’ve been wishing for this for more than two years). OpenX is already serving about 200 billion ads over 30,000 sites each month with its free software. What I’ve been urging that they do is tie that together into a network that advertisers can pick and choose from for ad hoc networks of quality sites.

    Today, I was told by OpenX founder and CTO Scott Switzer, they will have the first piece of that puzzle: an ID structure that will cookie users across any participating site.

    Next, in the second quarter, they plan to deliver a bidding infrastructure so agencies and networks can buy ads on any of those sites. Thus an agency could put together an ad hoc network of great mommy blogs, or an existing network like Federated could augment its own sites with others sites that are using OpenX. And a site can take high-value ads from one network today and another agency tomorrow and backfill with ads from a remnant network — including, apparently, Google itself. So both the publisher and the site recognize higher value and that, I believe, is what can propel sites of any size to put together highly targeted and flexible networks that reach critical mass and offer greater quality than portals, which are merely collections of eyeballs.

    And next will come a hosted ad serving service, which is now in beta; this would enable any site without benefit of a 16-year-old son and webmaster to serve ads from most anywhere.

    What they’re really creating is an open ad call, since any other network or server can serve ads through OpenX. That, I believe, is the keystone to creating a new and more open ad architecture. That, I hope, is what will enable most any advertiser to place ads on most any site.

    Switzer told me that they are being advised by a panel of sites, agencies, advertisers, and networks large and small.

    Here’s where I hope this goes next, from my Guardian column:

    Once we have an open ad network, we’ll also be able to expose data about sites and ad performance. We would establish the true value of our new medium, especially when we can track new metrics: behaviour, interest, influence, authority, the timing and spread of ideas, and so on. As an ad blogger once said: instead of measuring impressions, we’d measure the impressed. Or to twist another ad cliche: let’s stop reaching eyeballs and start reaching brains.

    My hope is that an open infrastructure would encourage the creation of many new companies. Let’s start with a wealth of new content sites: niche interest blogs, hyperlocal blogs, innovative services, new, small-scale journalism. Next we’ll see new analytics companies that would help advertisers find their ideal buys. And we’d see a host of networks spring out of ad agencies and media companies to help us poor bloggers make a living.

    The Guardian started such a network gathering green blogs. The Washington Post put together networks for high-value content areas such as travel. And last week in 13 US markets, CBS TV launched a network that places widgets containing news and ads – with promotions for stations – on local blogs.

    So now the battle is on. Will big media brands, Google’s ad network or an open network win more of the online ad market? The stakes are growing ever bigger: last week, General Motors announced that it will move half its $3bn ad budget online. I’m just hoping that one of these networks will bring a few of those dollars on to my humble blog.

  • CBS stations’ local ad network

    7 comments on CBS stations’ local ad network
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    It warms my cockles to see a local blog ad network start, especially from a company as big as CBS’ station group.

    They just announced a new widget ad network in 13 of their local markets (the owned & operated stations with newsrooms). In a week and a half, they’ve put together 80 blogs in the network, many more to come. They are all local blogs around various content interests: news, politics, sports, real estate, entertainment. This is pretty much just an ad network rather than a curated ad-and-content network like Glam. CBS intends to send the blogs some traffic, but unlike Glam, it’s not aggregating and curating their content. They’re looking for decent blogs that are local and are updated regularly, but they’re not yet turning this into a contest where the best quality wins (that day will come, I hope). When I spoke with them, they did add that they’re delighted with the quality of the local blogs they’ve seen.

    You can see an example of the ad unit here and here: a constant feed of content (video stills in most cases, text in others) over an ad unit. So far, they’ve sold AT&T, Liberty Mutual, and the Honda dealer group in Dallas. They will sell in both local and national ads; it’s too soon to know what that mix will be, but they anticipate about an even split.

    This is a model I like and one I’ve been pushing with companies I know: You could look at this as an ad with content attached or as content with an ad attached. So the blogger gets an ad, revenue, a some small dollop of content, and an association with a major media brand (which some still value). The station gets to push its advertiser as well as its content and brand and gets an association with those cool bloggers and its gets new inventory and audience. The advertiser has a better idea of the environment because there’s content next to the ad and because the station picks the blogs. What’s not to love?

    The CBS unit also carries the local station’s branding plus a link to a pitch to join the network. Here are examples of the units.

    I spoke with Jonathan Leess, president and general manager of the CBS station digital group, and Aaron Radin, senior vp for their ad sales and biz dev. They understand that this is not just about driving traffic to CBS domains but about reaching audience they may not now serve in other places. That’s the attitude.

    I had to pull numbers out of them like baby teeth. They’re telling the bloggers to expect an effective CPM of about 50 cents but they quickly acknowledge that they’re subsidizing and backfilling the network, which is brand new. That is, they’re not yet selling the high-value ads and they’re not selling out, so they are putting in lower-value advertising in some cases and throwing in a subsidy on top. So that’s the net-net bloggers can expect today. But that’s not the value they’re selling to advertisers. That, they said, is more like a $10 CPM (though all life is negotiable). Compare that with $8-20 CPMs on CBS domain banner ads and $16-25 on video inventory. If they can sell a CPM approaching a double digit for local blogs and sell through enough inventory, that could be healthy. In the end, I ask, what will the value of a network impression be relative to a CBS domain impression? Again, it’s too early to say, but Radin guesses one third to one half.

    They hope to add 20 million incremental (that is, new) ad impressions per month per market, though they’re quick to add that their goal isn’t just ad impressions but also new audience. Amen. And note that they’re pushing not just web pages but also those high-value video views. Leess and Radin said they serve 20-25 million streams a month, about half of that from the stations’ sites and half from syndication to Yahoo.

    By the way, Buzzmachine is not local so it won’t qualify. Drat. When will somebody start that media wonks’ network?