editorsweblog.org

Innovative advertising in newspapers: reader distraction or advertiser satisfaction?

Over the past few days, the New York Times Company and the Tribune Company announced that they will begin to integrate new types of advertising onto their pages. A New York Times Company press release reads that its flagship will begin to print "branded watermarks that will be superimposed over a Tuesday to Saturday page of its public company stock listings in the Business Day section of the newspaper" accompanied by the "advertiser's message on the bottom of the page." BtoB, a business marketing website reports that the Chicago-based Tribune Co. is launching a "marketing campaign this month to promote new print ad formats, including watermarked logos and cascading stairs" which will "coincide with enhanced color printing capacity at several Tribune papers."

These two different types of advertising have different implications.

Watermark ads, also known as shadow ads, are generally frowned upon by newsroom employees who opine that they blur the line between editorial and advertising (see former posting.) As of now, they don't appear to be affecting content too much as most are reserved for stock listings and movie pages. But seeing as both of these sections of the paper are rapidly losing readers to up-to-the-minute Internet stock tickers and movie schedules, one must wonder how long it will be before these subtle ads start sneaking behind columns.

"Cascading stair" advertising, on the other hand, does not necessarily confuse the reader as to what is advertising and what is content. Borders between columns and ads are easily distinguishable. However, large adverts that use the cascading stair model seem to seep into parts of pages that normally would not show advertising. Check out page 2 of this Tribune Co. Quarter 2 report PDF (click on August 2005). In effect, this model allows the advertiser greater visibility by spreading what would once have been a full page ad, easily ignored by the reader, onto part of another page of content. Instead of their eyes being immediately pulled towards the headlines, readers are more prone to first glance over the colorful promotion. But will that which is good for the advertiser further annoy readers, their daily lives already bombarded by flashy advertising, that even more will stop buying the paper? What do you think?

Sources: New York Times Company, BtoB, Tribune PDF (August 2005)

US: New York Times to launch entertainment magazine for moviegoers

The New York Times plans to launch OnMovies, an entertainment magazine, in December, reports AdAge. It will be distributed 18 times a year at Loews cinemas in several cities, such as New York, Washington, Chicago, Los Angeles, Seattle, Dallas and Boston. The New York Times pays Loews to distribute the magazine. One half of the magazine will consist of editorial content from the New York Times, the other half of advertising.

The magazine is part of a strategy to increase the paper's print reach and its ad revenue through finding new readers, especially young readers, as well as new advertisers. It is also an attempt to fight for movie ads, which are in decline for the main paper.

Source: AdAge

Los Angeles Times: how and why the editor was sacked

Editor & Publisher reveals that in the Oct.10 issue of The New Yorker, media writer Ken Auletta outlines how the newsroom/corporate -- and Los Angeles/Chicago -- conflicts led to the departure of John Carroll as editor of the Los Angeles Times this summer and cloud the future of the newspaper. In another paper, the Wall Street Journal asks: "Is Marilyn Monroe the answer to the hard times at the Los Angeles Times? After five years of sagging circulation and advertising, new managers at the Times are pushing for more coverage of Hollywood and celebrities."

Please find below some quotes from the Auletta's article:

“In Los Angeles,” he writes, Scott Smith, head of Tribune Co.’s publishing division, “is sometimes described as ‘an empty suit.’”

"Carroll's and Baquet (the successor of Carroll)’s drive to make the Times become a great national paper came at the expense of local coverage. Baquet tells Auletta, “We haven’t mastered making the paper feel like it is edited in Los Angeles.”

-- Times editors and reporters were outraged when Tribune did not offer public congratulations after the paper earned five Pulitzers in 2004, then did not send an exec to the awards cerermony.

- An unnamed senior editor describes the conflict between Chicago corporate and Times editors as ?a wrestling match,? with editors urged to adopt the latest ?management fad,? such as free youth papers that could be read on trains, when there are few trains in L.A.

- Carroll calls the current Times ?test case No. 1 of whether a newspaper chain can produce a first-rate newspaper. ... It may be that is simply structurally impossible.?

- Baquet wants to find new readers but does not commit to a youth spinoff, and does not endorse the new mantra about simply giving readers "what they want" as opposed to what editors think are important. "It's not always our job to give readers what they want," he declares."

WSJ reports that new managers at the Los Angeles Times plan to change the paper's reporting. They want more stories on celebrities and Hollywood, shorter stories, more regional reporting and more combination coverage linking the paper and its web site.

Sources: Editor & Publisher, the New Yorker and the and Wall Street Journal

Two opposing views on newspapers' bottom line

Grade the News has recently published two educated opinions about the state of the newspaper, the primary focus being on the problem of the bottom line. Lou Alexander, former director of the San Jose Mercury News' advertising department, highlights "three prominent misconceptions about newspapers" of which the first discusses newspaper profits:

Myth - Newspapers should cut profit demand: Alexander argues that the reality of the market does not allow newspapers to cut their above-average profit margins. Using the example of Knight Ridder, he argues that by cutting profits and piping that money back into their journalism, newspaper company stocks would be greatly devalued resulting in two scenarios:

1. the more positive scenario is that "one of the other cash-rich public companies would start buying KRI stock with the intent of taking over the company. To another media company some of the KRI newspapers are worth having in their own right. They are profitable and could be clustered with existing parts of the company executing the takeover. There would be considerable savings to be had by eliminating most of the KRI corporate staff. Some of the newspapers could be sold or traded to other companies to create new clusters."

2. or even worse; "Knight Ridder could be taken over by an investment consortium, which has profit as its only goal. It would generate extraordinary profit by breaking up the company, selling off the various newspaper and electronic media companies one by one."

Stephen R. Lacy, a respected media economics professor, counters Alexander's argument by saying that "Perhaps the real myth is that public companies will continue to make 20% to 25% profit margins 25 years from now." He describes two possible bottom line situations contrary to Alexander's:

1. "A commitment to profit margins in the 15% to 20% range and a willingness to invest in journalism to maintain readership. (This means readership of print and electronic news.) If newspapers maintain newsroom investment, they should dominate the local Internet market. This will require that investors adjust their expectations for public newspaper companies, but the fragmentation of advertising market will push that adjustment on investors eventually, whether they like it or not. I call this the long-term scenario."

2. The second scenario involves the continued cutting of newsroom resources (as well as other newspaper resources) to preserve high margins with the corresponding loss of circulation. The current managers will maintain their control, but the movement of readers away will open up opportunity for weekly newspapers, Internet news sites and even local cable channels to serve their former readers and compete for advertising.

Despite this bottom line argument, both seem to agree that content matters when it comes to circulation and conversely, profit.

Alexander closes with two suggestions:

1. The newsrooms of America need to make sure they are purer than pure. The world is full of smart, well-educated, well-read media consumers these days. These folks are aware of the scandals of the last few years.

2. Forget about gimmicks and focus on compelling content.

Lacy says, "Circulation is related to content. Circulation is not exclusively related to content, but most research supports some relationship.

Does these conclusions mean that by continuing to produce quality journalism, falling newspaper circulations will eventually turn around? If keeping high margins means cutting newsroom staff, can newspapers continue to produce the quality needed to sell their papers?

Source: Grade the News, (Alexander and Lacy)

Newspapers' transformation in the new media landscape

"Fusion is only now coming to the newsroom, but the fusion has already taken place in the minds of the readers." Commenting on one of his most recent travails, the conversion of the Wall Street Journal's Asian and European editions to compact format, renowned newspaper designer Mario Garcia insists that newspapers need to integrate their online and print editions to suit the already changed habits of readers in a multimedia world. In this ever evolving world, "Some stories will lend themselves to a photo gallery, others will be told better through audio or video, and reporters will have to be clued into that...They will tell the stories in nine paragraphs for the newspaper and then in a multimedia format online," said Garcia.

Garcia's arguments are supported by The Middletown Media Studies II report as reported in Revolution Magazine. The study conducted by Ball State University Center for Media Design found that people spend nine hours a day with various media and a third of it using more two or more media at the same time. Television was by far the most popular medium but computer use continued to grow making it the second most used medium.

And with traditional media companies such as Viacom, TimeWarner and NewsCorps buying up Internet properties left and right, as noted by the Wall Street Journal, the percentage of computer use is certain to keep soaring over the next few years. The main drive for these companies' acquisitions has been the rocketing online advertising market whose sales grew 33% last year.

But alas, the Internet giants that survived the dotcom bubble burst are leagues ahead of conventional players when it comes to the world's fastest growing medium. Banc of America Securities is quoted in Forbes as declaring that Yahoo! and Google are "poised to be the biggest beneficiaries" of the booming online advertising which, according to The Guardian, is being fueled by search-based advertising which makes up about 40% of total online revenues. This market is also certain to continue blossoming as more advertisers realize the advantages of being able to track the effectiveness of their advertising through 'click' tallies.

This Internet advertising news does not bode well for the printed word. Although Banc of America predicts that "the shift to the Internet will be slow," much of the advertising dollars moving to the Internet are being taken from newspapers, not to mention classified ads. On the other hand, the investment services company sees newspaper online advertising revenue making up 10% of total newspaper advertising within the next two years, a significant increase from its current 3-4%. With this forecast, Mr. Garcia's newspaper 'fusion' model will have the necessary financial backing.

But perhaps the biggest threat to newspapers and other traditional media companies, although it will take some years to determine, is the quest for original content by Internet companies. Yahoo!, which to date has been merely an aggregator of other sources' news, is aggressively developing its own media wing, sending a journalist to create multimedia presentations in war zones and hiring up to 30 writers to produce original financial content. Many in the news industry scoff at this venture under the impression that a non-news player will never be able to compete with the quality journalism they produce.

The fact of the matter, however, is that Yahoo! has hired prominent journalists, those who have worked in print and television for years. As Internet advertising grows, Yahoo! and other Internet players will have even more money to spend on hiring star journalists. If print advertising begins to slump seriously, newspapers will have even less money to spend on their own reporting, already a problem highlighted by several major newspapers' newsroom job cuts last week.

Staff cuts, along with growing newspaper online advertising and threats from purely Internet companies further support Garcia's 'fusion' model. For years people have complained that newspaper websites are simply reproductions of their print editions and that newspapers should have innovated their coverage by taking advantage of the multimedia opportunities the Internet provides. Newspaper online sites were frequented because there was no other option, as noted by media expert Bob Cauthorn.

Now there are options, and more are certain to keep popping up. Although major papers are cutting staff which has been declared by some to be the beginning of the end, they are waking up to (although well past the dawn of) the Internet era in that they have not been cutting online journalists. Furthermore, many papers have begun joining their print and online staffs. This trend needs time to develop so that the two staffs learn how to work together and more newspaper journalists learn how to produce multimedia content for the Internet as Yahoo! has just begun to do.

Another key to the future success of newspapers, according to Garcia, is Internet linking. Instead of stubbornly protecting their brand, newspapers should link to other sources to allow the reader to dig deeper or to get another view. Newspaper readers are not just readers anymore. They want to experience a story on every level of media. Readers will always appreciate a well investigated and comprehensive article but in the new media world, they do not want to stop there. Garcia summed up his vision of this new media world by saying, "There will be survival of every medium, but survival will come by fusing the different mediums and by sending readers from one medium to another."

Newspapers will be with us long into the future, but the manner in which they function and in which they are consumed are bound to transform to fit the new media landscape.

Sources: AsiaMedia (Garcia comments), Revolution Magazine, Wall Street Journal, Forbes, The Guardian

American newspapers: fretting about how cuts will be executed

A very smart article from Jon Friedman, MarketWatch about the current and future layoffs in the US press: "Newspaper companies talk a lot about how they hope some doomed employees will accept, in the more dignified newspeak of the publishing business, "voluntary" exit compensation packages.

I hope that the paper won't use the layoffs as an opportunity to abandon the less sexy coverage areas, such as urban affairs and metropolitan news.

President Bush was rightfully blasted by the media for turning his back on the poor people of New Orleans when the administration utterly failed to exhibit any sort of an adequate evacuation procedure prior to the destruction caused by Hurricane Katrina.

It would be oh-so-easy for any metropolitan daily to reduce its concentration to the news that affects the less desirable readers - you know, the people who neither subscribe to the paper nor read it online. And if you don't even own a computer or have an Internet connection, you might as well move to the Australian Outback."

Source: MarketWatch. See also a NPR audiofile on this topic

Korea: OhMyNews to pull $10 million revenues in 2005

The Korean citizen journalism project OhMyNews (see former posting) is likely to pull in $10 million this year, reports San Francisco Chronicle through Paid Content. The site has been profitable since September 2003. About 70 per cent of the revenues result from ad sales, 20 per cent from syndication sales and 10 per cent from paid subscriptions for premium content. Citizen reporters at the site, who are men in 76% of the cases, usually receive to $2 to $20 for each story depending on their success. Over 70 of citizen reporters and staff have reached book deals since the web site started.

Source: San Francisco Chronicle through Paid Content

TimesSelect: a missed opportunity for newspaper partnerships

Good morning TimesSelect seems to say Steve Outing in a recent column of Editor & Publisher.

Regarding the new paid service from The New York Times providing exclusive online access to Op-Ed columnists, the NYT archives and some web tools, he considers that "the hybrid online publishing model is a good one (keep most of the news Web site free, but build a suite of premium services worth paying for)".

Nevertheless, I consider an opportunity was missed in the struggle for the newspaper industry to reinvent a new business model. And I hope this missed opportunity will serve as a lesson in other countries as in the US.

What's the issue? It seems rather clever that the New York Times finally choose to introduce new "pay" service. But this shift would have a totally different significance if other national newspapers - such as the Washington Post, the Los Angeles Times and why not USA Today - did the same thing at the same rate at the same moment.

Immediately more than 50% of all op-ed pages produced in America would be available behind paywalls and op-ed page addicted readers - and many bloggers using these sections as punching balls - would have to choose: to pay or not to pay, to be an insider or a news refugee!

The Times decision to make its own and lonely policy is risky: not because web editors and bloggers will copy and paste the columns some will disseminate, but because a majority of them will ignore the Times columnists and will find their "honey" in other sources.

Another strategy would have been to discuss with other publishers and to define a common strategy to create a more powerful leverage toward readers. The problem is that every newspaper thinks it is able to escape the circulation decline by itself. But this is a wrong attitude: newspapers need to talk together and to define common paywalls. If not, every newspaper's paywall will be submerged one by one.

This mentality of working together is not at all "in the air" within the newspaper industry. But defeat after defeat, publishers and editors will be obliged to present a common front regarding pure online players: it is better to share revenues of a big cake - for instance all op-ed pages produced by some national newspapers sold in one package - than to go it alone!

Source: Editor & Publisher and former posting.

PS: in Spain, El Paisdid exactly the opposite than The New York Times: three years ago, they decided to become a paid site (with very few exceptions), but in June 2005, the Spanish newspaper was obliged to change its strategy and to again become a free website!

Wall Street Journal expands to weekends

In an attempt to increase its advertising revenue, The Wall Street Journal printed its first weekend edition in over 50 years on Saturday, September 17, reports the New York Times . It was met with a mixed reactions by readers: some who appreciated the lighter news and features than those which are printed during the week; others who complained that the glory of reading the Journal is that one does not have to read it on the weekends because of its business oriented content. The weekend edition has already brought about a marked difference in the Journal's advertising strategy; ads will now be found on the front pages of the paper's sections which were formerly reserved for content. "Weekend edition inspired us to think of new ways to offer creative units to our advertisers," said Judy Barry, senior vice president for sales and marketing for WSJ. "The minute the sales force heard about it, they asked if we could expand it to the daily paper." The Journal said that it could take up to three years to determine whether or not the weekend edition, which is included in the price of a WSJ membership and delivered to subscribers' weekend addresses, is successful or not. However, if subscribers don't appreciate the new approach of placing ads where there once were none, the Wall Street Journal may have its results sooner than expected.

Source: New York Times

News Corp seeking to create an "entertainment Google"

Last week News Corp bought IGN Entertainment, an Internet game and entertainment site, for US$ 650 million. As the New York Times reports the deal "underscored just how serious - one of his executives says 'obsessed' - the chairman, Rupert Murdoch, is about replicating in cyberspace the kind of power he has in media arenas like British newspapers, Hollywood and cable television news." The deal is the third within the last seven weeks: The company recently bought Intermix Media Inc., owner of MySpace.com (see previous posting) for US$ 580 million and Scout Media Inc., which has more than 200 sports web sites, for US$ 60 million. As The Guardian reports, the deals give News Corp 70 million users and 12 billion page views per month: "That catapults it into the fourth-largest internet firm in the world by page impressions, behind Yahoo, Time Warner and MSN."

Last weekend Rupert Murdoch gathered his "leading lieutenants for two days of private discussions on what he has described as the company's highest priority: how to grapple with the threat and opportunity of the internet to the media empire he has spent a lifetime building", reports The Guardian. The debate was on how to transform the company's web properties into a "hub for entertainment-related content." According to The Guardian one insider called the strategy "an attempt to create an entertainment Google - a one-stop shop for all those looking for computer games, movies, music or chat online." It was the second summit on the topic after one in February. (For details of the summit see article in The Guardian)

Sources: New York Times, The Guardian