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.

Comments

[Shafqat]

Great post - here's a recent NiemanLab post about GlobalPost, who made 1M in revenue in their first year. They have a diversified business model, but their commitment to their advertisers is pretty clear (no ad networks, they deal with advertisers direct).

http://www.niemanlab.org/2009/10/globalpost-generating-revenue-of-1-million-in-first-year/

[Robin Rauzi]

Doesn't this whole post suggest that the future of journalism will remain tied to paid advertising? I'm not convinced that that isn't the broken business model. I can't see the supply and demand thing -- when there is an infinite supply, and when advertisers can create their own "quality brand" space -- will work out for journalism.