SimsBlog

Why I'm a Huge Fan of Steve Buttry's Complete Community Connection

There’s been a great deal of back and forth lately about the plausibility of ad supported local news sites as presented by a team at CUNY and their New Business Models for News.  The team focused on what would happen if a major daily newspaper (in a single newspaper town) closed “today”.  Team lead Jeff Jarvis makes the very clear point that the goal of the project was not to determine what model or strategy will be the lasting solution for local news.

Smart call. 

I really don’t believe we’re likely to have a lasting strategy for some time.  The online world is still changing too rapidly.  And as the economy begins a slow recovery and new entrepreneurs appear, I believe that the competitive landscape for local advertising is about to get much more complex.

Most business models for local news sites assume that advertisers who might once have appeared in newspapers will migrate to online as soon as they are given a viable alternative that works as effectively.  I agree, they will.  But I’m afraid the migration won’t all be to news sites.  A large portion of it will be to Google and a new crop of specialized listings sites.  (I’m amused by how newspapers are spending so much time and effort worrying about Google “stealing their content” when it’s their advertising revenue that they should be worried about).

Put yourself in the mind of a local business.  You have limited funds with which to advertise.  Every advertising dollar comes directly out of your own pocket and you need to ensure that the money you invest drives store traffic and sales.  This means advertising in the place most likely to supply qualified leads.  As click-through rates for display ads continue to decline, ad efficiency is not likely to be achieved through display ad on a news site. 

Now put yourself in the mind of a consumer.  It’s highly unlikely that you would be reading an online story about a local fire, see an ad for an interior designer and click on it.  The context isn’t right.  You’re not in the right mindset to be thinking about hiring an interior designer.  (Unless I guess, it was your house that was on fire.)

No, if you’re looking for an interior designer, you’re most likely to Google the name of your city and “interior designer’.  First, you’ll find Google’s local business results complete with photos, profile pages and user reviews.  We can argue about the quality of those listings.  When I searched Los Angeles Interior Designers, the 5^th listing was for a restaurant and the 3^rd listing was for a cheap and cheerful fabric shop.  But it’s Google, I think it’s safe to assume they’ll improve this experience in time.

In the near future, you might find that the next listing is for Decorati.com.  I’ve been spending a lot of time on Decorati lately.  I can’t get enough of it. I’m addicted to it because I think that it and sites like it are going to have a major impact on the ability of local news websites to operate profitably.

Decorati is a national site that connects interior designers and customers at a local level.  But it is much more than a simple directory or listings site.  It’s cool, well designed (of course) and VC funded.  It’s a great mix of content, shopping and listings.  You can look for furniture, explore different styles, participate in forum discussions, read a blog and find a decorator in your market that suits your taste and budget.  It makes money by charging decorators for listing fees.

One thing I know for sure is that advertisers love context.  It attracts qualified leads and makes the cash register ring.  If Decorati really takes off, it’s easy to see how it could become the top source for lead generation in its category. 

This site can serve as a blueprint for many other listings-based businesses that directly target the very same advertisers local news sites are hoping to attract.  Think of sites for hospitals, cosmetic surgeons, furniture stores, spas, camera stores, private schools, and any other number of local advertising categories, with each site combining content, forums, products and listings.

How can local news sites compete?

In my opinion, the best hope is the Complete Community Connection proposed by Steve Buttry on his blog back in April.  Steve argues that you create engagement (and therefore advertising results) by becoming the ultimate resource for living in your city.  The site becomes valuable to advertisers because of the sheer comprehensiveness of the site’s value to the city and community.  It becomes the place locals look for information on their city.

In Steve’s own words:

“For consumers, we will be their essential connection to community life – news, information, commerce, social life.  Like many Internet users turn first to Google, whatever their need, we want Eastern Iowans to turn first to Gazette Communications, whatever their need.  For businesses, we will be their essential connection to customers, often making the sale and collecting the money.  We will become the Complete Community Connection. 

Our company will provide an interactive, well-organized, easily searched, ever-growing, always updated wealth of community news, information and opportunities on multiple platforms.  We need to become the connection to everything people and businesses need to know and do to live and do business in Eastern Iowa.  We need to change from producing new material for one-day consumption in the print product or half-hour consumption in the broadcast product to producing new content for this growing community network of information and opportunities.”

I love it.  He’s got some fantastic ideas all designed to help the site “be the answer’.

The very good news is that there are two opportunities for newspaper companies in the local space.  First, choose a local advertising category and create the next Decorati (or several Decoratis).  Second, create a team that is completely separate and independent from your regular operation, put a smart product development person in charge and let them create the Complete Community Connection in your city.  Yes, yes, it will cost money to create, but it could very likely save your business.

 

 

Chilean Journey Part 3: I'm an Atacama Mama

Last week I hiked through a valley where the surrounding mountains are green, blue and red due to eruptions of a near-by volcano, had lunch under a tree in a true desert oasis, saw flamingoes at sunset on a salt pond, rock formations that were 5 stories high, a field of over 100 geysers and a place that looks like the surface of the moon where crazy young men go "sand boarding".

The Atacama Desert is one of the most beautiful places I've ever been.  Photographic proof is below.  By far, the best thing I saw was the full moon rising over the Andes as we sat by the roadside.  No photo of that though.  That moment was to be experienced, not recorded.

I've been back in Toronto only a day and I already miss that amazing country.  Chile brought me back to life.  And for that I will always be grateful.

 
 

   

 

 

Chilean Journey Part 2: Holy Crap I'm on Easter Island

Here's a couple things I bet you didn't know about Easter Island.  

First, there's trees.  Lots of trees.  The island has been reforested.  There are palms, bamboo, banyans and an amazing eucalyptus forest in the centre of the island where it smells like Vicks Vapo Rub.

Second, about 6,000 people live on Easter Island, 3,000 of whom are natives, or Rapa Nui.  They didn't actually wipe themselves out, though many foreign occupiers have come close to doing so since the island was first discovered in the 1700's.  No,the Rapa Nui lived in peace for over 1,000 years before ecological devastation and religious disillusionment led to civil war.  What's there now is a small but thriving community, though there was definitely evidence of anger toward the Chilean government.

It is an amazing place, not too commercialized and quite unspoiled.  I hope it stays that way.

Me and my favourite Moai. 

Later in the island's history, during the time of the "Bird man cult", every spring, young men would dive off the cliffs of the main island and swim over to this smaller island.  There they would wait for the return of a particular kind of migratory bird.  The men would hunt the island for the egg of the elusive bird and the first to find the egg would rule the island for the next year.  Hmmm.... Springtime egg hunting on a place called Easter Island.  Sounds familiar.  I have become convinced that the modern day Easter egg hunt has it's origins here, but despite much Googling, have not been able to support this theory.

Trees!

 
Handsome fellows don't you think?  

Chilean Journey Part 1: Santiago

Nothing is better than having springtime in November, even if it does cause your allergies kick in.  

To be honest, I wasn't expecting much of Santiago, so it has given me a delightful surprise.  It is at once laid-back and vibrant, unpretentious and downright sophisticated.  The restaurants are fantastic.  We haven't had a bad meal in three days.  I suppose the real charm of Santiago is that it's people are warm, friendly and very tolerant of tourists, even those who don't speak Spanish.

My favourite site by far was Cerro Santa Lucia, a park on a hill in the middle of the city.  Palm trees, many, many stone steps and a 360 degree view of the city centre.  One of it's fountains is pictured below.

I could live here.  Well, if they had better shoe stores.  The shoes are disappointing.  

We're off to Easter Island tomorrow.  I will post again in a few days.

 View from the top of Cerro San Christobal.

 Fountain in Cerro Santa Lucia.

Pity the Poor Publisher

For all my ranting and raving about the failings of newspapers, I’ve never understood why publishers, who are very smart people, have mostly refused to see and do what’s necessary to save their businesses.

But now I have a theory.

Once upon a time, a newspaper publisher was one of the most powerful people around.  He/she could shape cities, make or break politicians (or even lowly film makers), change laws, expose corruption, protect the little guys, antagonize the bad guys, sometimes help the bad guys and of course, make money.  Lots and lots of money.  

It was delicious, all that power, all that authority, all that money.  How marvelous it was to build and run an empire.  It was an era of unbridled success.  Anything was possible - “You supply the pictures and I’ll supply the war.”

But something has changed.  The authority of the daily newspaper is being replaced by the algorithmic authority of the Internet.  The money is drying up as advertisers are finding more efficient and effective media in which to spend their money and readers are finding their news and information for free.  The power of the publisher is diminishing. 

Pity the poor publishers.  I believe they are grieving a terrible loss.

What if the current plight of newspapers is not so much an industry issue as a very personal one?

Could it be that of the many PhD theses that are sure to be written about the decline and fall of newspapers, the most telling will have been written by psychology majors?

Stay with me.

Originally created to describe the experience of coming to terms with death and dying, the Kublar Ross stages of grief can occur during any great loss.  I’m struck by how closely the thinking they describe aligns with the behaviour of the 21^st century publisher.

Stage 1: Denial

“I feel fine”, “This can’t be happening, not to me”

Nothing has to change, we certainly don’t have to change.  It’s all good.  The Internet will never replace the authority of the printed word.  You can’t take the Internet into the bathroom, on a train, etc.  Our readers need us to tell them what’s important.  It isn’t news until we tell them it’s news.  Everything will be back on track as soon as the recession is over…

Stage 2: Anger

“Why me? It’s not fair!”, “How can this happen to me?” “Who is to blame”?” 

Our readers no longer value our content.  They expect everything for free.  And, they expect to be a part of the conversation.  They no longer view us as the sole authority. 

But the real culprits are Google and the other aggregators, those untrustworthy bloggers, not to mention the BBC.   They are all thieves and parasites who encourage online news reading “promiscuity”…

Stage 3: Bargaining

“I’ll do anything for a few more years.”

Somebody has to pay for this.  Staff cuts have kept things going for a little while.  Pay walls should buy us a few more years.  We can block Google from crawling our sites and enforce the ACAP standards.  Then we can change fair use doctrine and copyright law.  If all else fails, maybe we can get the government to pay us…

Some people don’t actually make it through all the stages of loss.  They get stuck somewhere along the way.  I’d argue that most publishers haven’t made it past bargaining.  But if they do, here’s what to expect.

Stage 4: Depression

“I’m so sad, why bother with anything?”

I don’t know if any publishers are feeling this way, but I know a lot of newspaper employees are.  Not exactly the best environment in which to create the exciting digital future.

Stage 5: Acceptance

“It’s going to be okay.” “I can’t fight it, I may as well prepare for it.”

It would have been great if all publishers had reached this stage 10 years ago.  Norway’s VG did and now 38% of its profits are derived from the digital side of the business.

Having been through these stages myself recently, I can tell you that denial is awesome.  I really enjoyed denial.  And anger certainly has its uses.  But acceptance is pretty great.   Let's hope some publishers will join me there.

Is There an Entrepreneurial Future for News? Go Ask Your Advertisers.

There has been much talk lately about the entrepreneurial future of news.

Professors at the J-schools of both CUNY and Columbia University are starting to talk about setting up programs to encourage students to launch news sites.

I love it.  Go forth and create, journos of the future!  You are inventing the new journalism.

But first, a little advice.

Please remember that you have 2 sets of customers: readers, who you think about a lot, and advertisers, who you don’t.  You need to keep them both happy.  And no, you can’t rely on ad networks alone to do this for you.

It isn’t safe to assume that just because you have a news site with lots of traffic that you are going to attract enough advertisers at a high enough rate to sustain your business. 

Why? 

Advertisers don’t actually want to be around news content.  They want to be associated with a quality brand, in a relevant environment and to see a return on their advertising investment (i.e. the cash register rings after they place an ad with you).  News can be depressing, at times infuriating, always unpredictable and generally not conducive to putting readers in a shopping state of mind.  The truth is, they advertised in the A section of printed newspapers because they wanted to reach a mass audience – not because they wanted to be associated with news content – and newspapers were the best place, indeed often the only place to achieve that mass. 

Unfortunately, that formula doesn’t work online.  There is no equivalent mass when it comes to news sites.  There are too many other choices.  You’ve got to do more for online advertisers than banners and buttons.

It’s true, go ask them.  Seriously, I mean ASK THEM.

Besides adding all your sparkling, witty, analytical, hard-hitting brilliance, the single smartest thing you can do when creating a news site is to talk to your potential advertisers.  Now.  Before you’ve even got a wire frame or a notion of what will be in your main navigation.

Don’t worry; I’m not suggesting that stop exposing corruption, comforting the afflicted and afflicting the comfortable.  Nor am I suggesting that you pander to your advertisers or ever, ever cross the line between editorial and advertising.  You won’t be serving your readers if you do that and they will flee.  Smart people your readers.

What I’m saying is that if you choose to launch a news website and you want to make money from that site, you are now a publisher.  It used to be that journalists had the luxury of pretending the business side didn’t exist.  That’s over now.  As publishers you will need to balance both business and content requirements. 

It’s time to talk to those advertisers.

Ask them about their challenges, their unique selling proposition, their target markets, their competitors, how they see their business growing in the future, their budgets, where they are advertising now, what’s working, what’s not.

Share your vision with them.  Does it make sense to them?  What do they think is the smartest thing you could do?  The Dumbest?  Don’t skip the last question.  You’ll likely find you were about to do something really stupid in the eyes of your advertisers.

You’ll be surprised by how much you learn and how it changes your view.  I’ve created and launched 4 websites and each time, my strategy, navigation and site structure changed after talking to advertisers.

Your job is to help solve their problems.  Learning about your advertisers’ peak sales times may lead you to create a seasonal guide section or topic pages. Knowing which audiences advertisers are targeting may affect the way you organize your content.  Understanding that many retailers focus on key lifecycle shopping moments (buying a house, having kids, retiring) may inspire you to create a new vertical.  Discovering that local advertisers need to promote daily or weekly specials, may lead you to choose a publishing platform that allows them to update their own listings.

If you do this, your site may become more than a news site.  You might form something like Steve Buttry’s  http://stevebuttry.wordpress.com/“Complete Community Connection” or the Village Soup sites or maybe something completely new.  You might make a lot of money too.  You’ll probably make your cities and towns better places in the process.

It’s not just you, young journos, who need to learn this lesson.  I focus on you because you’re shiny and new and probably still open to new ideas, but this is also a lesson that large media companies could well learn themselves. 

A recent Online Media Owners Survey in the UK revealed “falling advertising confidence in most of the leading newspaper websites”.  Well that’s not good.   I wonder how much time they spend talking with their advertisers? 

Alan Mutter of Newsosaur gives a sad but funny account of the recent “How to Make Money in News: New Business Models for the 21^st Century” summit, which took place at Harvard last month where there was “a smattering of random ruminations about revenue”.  According to Bill Densmore’s notes from the event, not a single advertiser was in the room. 

So, we’re expecting advertisers to pay our bills, but we aren’t bringing them into the conversation?  In Alan’s words: “No competently managed business would think of taking such a haphazard approach to a challenge…” I love you journalists, but let’s face it, you generally suck at guessing what advertisers need (when you bother to think of it at all).

Of course Google already knows all this.  When asked why he created the recently launched “Google Commerce Search”, a search product for online retailers, Lead Product Manager Nitin Mangtani said “Retailers convinced me that there’s a need for this type of product” adding that sluggish search performance on retail sites can send shoppers elsewhere and hurt a retailers’ sales conversion rates.

Now that’s solving your customers’ problems. Googlers sure are smart. 

You know who else is smart?  The journalism entrepreneur who isn’t afraid to learn from his/her customers.

Now go!  They won’t bite.

What is the future of media? Good grief, are you kidding me?

How about an easy question like “What is the purpose of the universe?”

A journalism student recently contacted me asking what I think the future of media is and if he will some day get paid for working in the media. 

Truth is, despite my blathering on about what media companies should be doing, I don’t think anyone can predict the future of media at this point in time.  Best I can give is a few hunches I have about where things are going.

1.    There will be fewer paid journalists.

No way of getting around this I’m afraid.  The Internet removed two barriers to entry: geography and access to a printing press.  News organizations are not only competing with the passionate bloggers and citizen journalists in their own markets, but in reality, with every other content provider in the world.  The Winnipeg Free Press now competes with the New York Times, which is now competing with the BBC. 

Competing with the rest of the world means that many traditional content areas are becoming commoditized.  Think movie, TV and music writing, national news reporting, foreign news reporting, lifestyle reporting, travel writing and even some sports reporting. 

To survive, news organizations will have to focus on what they can do better than anyone else in the world.  That’s producing high quality, original, local or national (depending on the site) news reporting and analysis. 

That’s a much smaller content pie, and it will mean fewer journalists.

2.    The new world of media will consist of a mix of professional and amateur journalists and profit and non-profit websites. 

Author, blogger and Outside.in founder Steven Johnson gave a fantastic speech earlier this year illustrating what the new media ecosystem might look like.  He says it better than I could.

3.    Portals and sites with a traditional newspaper structure will fade away and verticals will rise.

There’s a reason Yahoo!’s new “It’s You” campaign has gone over like a lead balloon despite millions of dollars and a very beautiful TV spot.  The problem is that the site experience doesn’t deliver on the campaign promise.  It’s actually not You (or me), because Yahoo! is for everyone.  It’s a portal.

Just like newspapers with their broad range of content, Yahoo! was designed to appeal to a large, diversified audience.  Sure there’s many content channels on Yahoo!, but they are all under the single umbrella of the Yahoo! brand.  Frankly, it’s old fashioned.  Clay Shirky calls it incoherent and industrial. 

Of course print readers have been creating their own verticals out of the bulk newspaper for years.  I can’t tell you how many focus groups I’ve sat through where the participants described how their families separate the sections of the newspaper on a Saturday morning with someone taking Sports, someone taking Autos, someone taking Living, Comics, Classifieds, Flyers, etc.  The bundle made sense because readers were willing to get some of what they didn’t want for a little of what they did.  Besides, there was no alternative, and if there were, it would have been very expensive to subscribe to all of those publications.

Online, mass is not where it’s at.  Specialization of content and concentration of audiences are.  Simply put, vertical content sites lead to highly engaged audiences, greater ROI for advertisers and therefore more advertisers paying a higher rate.

This is why I like AOL’s strategy of creating both branded and non-branded vertical sites.

4.    New role for editors

My entire understanding of what news organizations were to become changed in March of 2006 when I saw Tom Glocer, CEO of Reuters speak at an OPA conference in London.

Tom outlined the three new roles of media companies: 

The Seeders of Clouds: generate high-value, original content that is credible and reliable which is then linked to, reacted to, commented on, etc. 

The Providers of Tools: promoting open standards and interoperability, which will allow a diverse set of consumer-creators to combine disparate types of content.  Think of the Guardian’s API.

Editors and Filterers: The world has never been in more need of editors.  Tom says it is their job to “spot the gold in the pan of water and dirt”. 

I think all of these roles fall into “content curation” – it just sounds more Internety – and it includes user interaction. 

As a curator, the new editor works in tandem with their content community.  They provide links to related articles, videos, documents and maps and highlighting interesting articles and blog posts on other sites.  They identify sharp, engaging commenters and invite them to participate more through a blog or a special piece.  They ask users for story ideas and/or questions for interviewees.

5.    Aggregation and networks

The fragmented nature of the Internet can make it much more difficult for users and advertisers to navigate.  Content can be aggregated by topic or with a particular audience in mind.  Same goes for advertising networks.

I think we’re going to see an explosion of highly verticalized content aggregation sites in the next couple of years.  Rotten Tomatoes is already doing this for movies.  Imagine the Huffington post of home decorating, parenting, travel (well actually, USA Today is already doing this in Travel), personal finance, etc.  Find a lucrative advertising category and build a vertical site using a mix of aggregation, blogging and user interaction.  Platforms and tools like Daylife, Evri and Inform make this easier than ever. 

6.    Journalists as brands

If only a few large news brands survive, I think in the future, being a paid journalist will require becoming a brand of your own.   Twitter, blogs and books will lead to more lucrative speaking engagements, and paid assignments with not just one, but a variety of content sites. 

And, it won’t just be writers forming a brand.  Check out Jeff Jarvis’s post about Kai Keikmann, head of Bild in Germany.

This hunch is the foggiest.  We’ll see how it plays out in the coming months and years.

So, will you get paid as a journalist?  I think in the long-run, yes.  But only if you are passionate, dedicated and very good at what you do.  And if you are all those things, not only will you get paid, but you will have the privilege of being one of the pioneers of the new journalism.

That doesn’t sound so bad does it?

I've Been a Blogger Without a Day Job for 3 Months Now

British Customs Guy:  You’re a full-time blogger? 

Me: Yup.

Him: I’ve never heard of that.  You make any money?

Me: No.

Yup, I’m still a blogger without a day job.  For the most part, I’ve found this time in my life to be rather good.  I have more time for going to the gym, reading and walking.  I look ten years younger.  I feel more creative and my passion for online media has increased.

My amazing boyfriend as well as friends and family have been wonderfully supportive, but the real saving grace has been my blog.  When I started it 5 months ago, it was mostly with the intention of putting my money where my mouth was.  That is to say I wanted to finally become a part of the conversation. 

Not only has blogging kept my brain from going mushy, but by making me a part of the online community, it’s kept me from feeling invisible.  I’ve ranted and raved, met people from around the world, learned about their businesses and hopefully, inspired a few mainstream media execs to think differently about their strategies.  I even appeared on the home page of paidcontent.org.

When not blogging I’ve traveled to London and Banff, done some consulting work, knitted a sweater for my sister’s imminently arriving baby, cleaned out all my closets and have even started to learn Spanish.

I can’t say it’s all been easy.  Every once in a while, it hits me “Oh my God.  I don’t have a job!”.  I can see how it would be easy to slip into self-pity and bitterness.  I’ve had my moments.  But I keep thinking about a woman I used to work with whose father and sister died in the same year she herself was diagnosed with breast cancer.  When most of us would have trouble getting out of bed everyday, she did so elegantly and courageously.  Her secret was simple.  “You can get up everyday and you can laugh, or you can cry.  I laugh.”

So there you have it. Must keep getting up and laughing.

Truth is, my greatest fear isn’t that I won’t find another job, it’s that I’ll waste this unique time in my life.  (Well, wasting this time and never having occasion to wear my collection of magnificent 4 inch heals again.  God, I’ve been in flats for 3 months!)

So, next month, we’re off to Chile - Santiago, Easter Island and hiking in the Atacama dessert.  I’ve never been to the Southern hemisphere and I really want to see water go down the drain in the opposite direction.

When else am I going to have time to do that?

A Tale of Two Strategies - AOL vs. Newspapers

Tom Peters said a great thing at a seminar I attended a couple weeks ago.

“The problem is never the problem.  The response to the problem invariably ends up being the real problem.”

This puts me in mind of the state of the media industry.  In a week when Newsday announced it will begin charging for content, the managing editor of the WSJ declared that Google encourages digital disloyalty, and Bill Keller told his digital staff that learning the web side of the business was like taking a graduate level course without the undergraduate prerequisites, AOL CEO Tim Armstrong revealed that his staff of journalists has grown from 500 to 3,000 in the past 6 months.

Much has been said about the newspaper industry’s financial challenges.   They are not alone, as AOL has been experiencing many of the same difficulties.  PC World reports that in the first quarter, AOL’s advertising revenue fell 20%, overall revenue fell 23% and operating income fell 47%.

It seems however, that AOL is going to have a very different response to those difficulties.

Let’s compare.

AOL

Structure

Time Warner hired an online expert and ex-Googler to run their online business who has in turn re-organized not once, but twice to form the team he needs for AOL’s transformation.

Very soon, AOL will be spun-off from parent mainstream media company Time Warner to form a completely separate entity leaving the AOL team free of the concerns of a mainstream media company as they seek to grow and innovate.

Audience Strategy

And grow and innovate they shall.  Tim Armstrong and the leadership at AOL understand that “fragmentation is our friend”.  The MediaGlow publishing division consists of a mix of 84 branded and standalone vertical sites like Engadget and TMZ that combined have a total of 70 million UV’s and over 7 billion PV’s per month.   

Community also seems to be a priority at AOL.  In hiring those 2,500 new journalists, attention was paid to the audience those writers attracted.  “You’re not just hiring the person, you’re hiring the community they come with.”

This is a smart strategy.  In a world where only 16% of Internet users click on a banner ad and 8% of Internet users account for 85% of banner ad clicks, mindless mass reach is becoming less attractive to advertisers. 

Content and community are the new critical factors for site monetization.

Why?

Quality content is more likely to create engagement, which leads to community activity on the site, which leads to even more engagement.  Engagement leads to more time on site, and the likelihood of more interest in the ads targeted to the site, which leads to ROI for advertisers.  ROI for advertisers leads to site monetization, profit and the ability to further invest in quality.

Makes sense.  In Armstrong’s words “…how do we get shareholder value?  I think it comes from customer value”.

Culture

Armstrong encourages a culture of innovation at AOL and understands that sometimes you have to fail in order to learn and grow. "If you're not going to take risks and you don't think the future is bright," he said, "the Internet is probably not the right place for you."

And they are putting their money where their mouths are.  Hyper-local experiment Patch.com continues to ramp-up.  AOL will soon launch a new content management system that will allow for easier sharing of content across the verticals.  It will also bring in more outside writers by enabling tracking that will make it easier to pay freelancers for the ad impressions generated by their content.  Why that’s starting to sound a lot like the very successful and very smart Glam.com model.

Newspapers

Structure

Newspaper organizations are not led by digital experts.  In fact, newspaper organizations are not spinning-off their digital divisions, but rather, are going in the opposite direction with a focus on integrating the print and web operations.   They are in effect asking their managers and employees to do two part-time jobs.  Create the exciting new digital future while managing the accelerating print decline. 

Bill Keller illustrated the difficulty of this strategy when he lamented that he, unlike his digital strategy predecessor Jon “stop Jayson from writing” Landman does not have the “luxury of mostly detaching himself from a lot of the other problems in the newsroom.  Little things like the print editions and the non-digital budget…” and therefore he won’t “master the intricacies of digital the way Jon did”.

Audience Strategy

For all their talk about the importance of content, most newspaper companies have not created a wide range of content verticals targeting multiple niche audiences.  Sure they have created classified verticals and even mommy forums and a few pet sites, but few of those sites have editorial content.

Why haven’t newspaper companies created national vertical content sites like those of AOL?  My guess is that these companies have never had a product culture.  New features or sections are created by editorial or advertising, rarely both, and never by a person actually trained and skilled at product development.

I find the failure to create content strategies almost more troubling than the attempts at integrated structures.  Clay Shirky says that one of the 3 non-economically based reasons that most newspapers will eventually fail is that the bundle of information they present online is “incoherent”.  That is to say that the mix, of say, crossword puzzles, sports scores and international news was made necessary by the scarcity of printing presses.  Newspapers produced the mix of content that would appeal to the broadest audience possible.   As the web allows for narrower and narrower niches of content, maintaining the old bundle cannot work.

As for community, although more and more newspapers are recognizing it’s importance in the form of commenting and social media, their primary discussions are actually about how to stop it from happening by erecting pay walls.

Culture

In their book, The Three Laws of Performance, Dave Logan and Steve Zaffron make the case that “as people see the world, so they behave”.   

Well, in most newspapers, the mood is like death.  A place where people are worried about losing their jobs during the worst recession in 70 years with little hope of working again in their chosen profession is probably not the best environment in which to encourage risk-taking and innovation.

So let me ask you.  Who’s got the better response to the problem?

Which looks like the better place to invest - an online media company that is led by Internet veterans and is growing and innovating, or one that is cutting, retrenching and retreating behind a pay wall?

Where would you want to advertise - an online media company that is focused on creating ROI through quality, community or engagement created by vertical sites or one that still bundles content for the masses and relies on the declining click-through rates of banner ads to provide results?

If you were a talented, passionate journalist, marketer, ad sales person or product manager, where would you rather work - a media company that is growing, hiring, innovating and encouraging risk taking or one that is shrinking, fearful and stuck?

It’s obvious.

Newspaper executives aren’t stupid, in fact quite the opposite.  So why are they not doing what needs to be done?

I think the real question is why are they not allowing their companies to do what needs to be done?

I can only imagine that it is the very unpleasant reality that to affect the real change that will enable media companies to survive, there must be a massive power shift. 

From old guard, to new guard.  From print publisher to digital leader.  From editor-in-chief to product developer.

Ouch.

There's Something Interesting Going on in Maine. Yes, Maine.

Yesterday, I met (okay, by phone) Richard Anderson, founder of the Village Soup sites.  Village Soup currently consists of 4 community sites serving Knox County, Waldo County, Bar Harbor and Augusta along with two community newspapers (unusually, Richard built the sites first, the newspapers second).

Each “soup” consists of professional journalists, amateur content providers and advertisers sharing a common platform and creating a community site.  Together. 

Village Soup sites don’t have readers and advertisers - they have members.  What’s really different is that the members pay to be a participating part of the community. 

That’s right, anyone can read the content on the site, but only paying members may participate.

Sounds crazy?  It’s not.

As Village Soup members, businesses and organizations get the enhanced listings pages, display ads and appearance in search results offered by most local sites.  What’s different is that they can also publish blog posts and special offers to the site.  (Before you dismiss the notion of advertisers providing content, check out a recent post by Eastern Tire and Auto Service on what to pack in a winter emergency.)

True, a lot of the posts are just ads in disguise, but some are quite interesting and they are in a widget that is easily identifiable as advertising content so users know what they’re getting.  The special offers are even more valuable to users as the site is almost functioning as an electronic flyer for the community. 

Advertisers pay around $20/week and organizations pay around  $10/week for their memberships.

Readers pay about $4 to $9 per month.  That’s the subscription rate for the newspaper, a reverse-published, printed version of the site to be delivered to their door once or twice a week.  The catch is that users must be subscribers to participate on the paper’s affiliated website. 

I’m not a fan of forcing readers to subscribe in order to participate in a site, but for Richard, doing so has solved a key issue.  He says the quality of contributions from readers is increasing the quality of the site and reducing the need for moderation.  It’s hard to argue with that, though this strategy will cost them younger readers and may not be sustainable in the long-run.

In addition to the amateur content, there’s lots of professional journalism, including articles about crime, education and government.  The site’s “about” page lists an editorial staff of 20.

The formula seems to be working.  The sites feel alive.  The users and advertisers are fully participating.  Blog posts and special offers are current, not stale.  Of the 100 or so Dining Offers on the Knox site, all were updated in the past 3 days and 25 of them were updated today. 

They have developed some significant traffic given the small size of the markets served (totaling 150,000 UV’s/month and 2.5 million PV’s/month) and 20% of the business’s revenue comes from online.

What I love about Village Soup is that Richard Anderson and his team are at least as committed to providing ROI to their advertisers as they are to providing great journalism to the communities they serve.  I know from my own experience, and through talking with several other hyper-local sites and networks that true advertiser value and therefore loyalty is by far the largest determinant of a site’s ultimate success and the most difficult thing to create.

The model isn’t perfect.  The fact that only print subscribers can participate will ultimately prevent them from becoming true centres for discussion and debate for their communities, and while the site structure is (mostly) fine, I think the design, even on the newer Augusta site could use a bit of an update.

That said, it’s very exciting to see a small publishing company doing so many things right.  Don’t you think?