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 5th listing was for a
restaurant and the 3rd 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.
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