Can newspapers leverage print to gain money from online readers?

Derick Harris:
“One aspect of the problem with or without the Paid Content survey results is that the print version of newspapers is an old content form (or package) that newspaper publishers apparently want to pour into a new technology.

It isn’t even this or that technology per se, as if technology was either the answer or the culprit. The technology argument alone, with or without the content explanation, where the latter is another aspect of the problem, are simplistic.

What has happened to newspapering is a structural transformation of a deeper kind that newspapers (at their peril) apparently have not yet fully confronted.

The structural aspect of the problem can be seen within the deeper dependency relationship between advertising, news packaging and the consequent packaging of audiences that are intended to inform advertising strategies predicated on the availability of mass audiences.

Therefore, all three variables have to be looked at together, as the NEWSNAV ™ analysis pointed out in its presentation to the 1200 or so member newspapers of the Newspaper Association of America (NAA).

The NewsNav argument amounted to this: all three issues have to be examined contemporaneously in terms of what it is or was about the convergence of new technologies with new content forms and consequent new expectations from audiences of one person at a time, and where all the above have had a demonstrative impact on advertising which makes news propagation as a business possible in the first place.

A structural analysis does not think of news as something that might go away. The news won’t disappear. Nor will news as something printed on newsprint become extinct. New media always accommodates and incorporates older content forms.

The problem for newspapers as an industry per se stems from what happens when technology is coupled with new content forms which are then in their effect “massaged” or worked over by new technologies which then have an impact on audience apprehensions of what’s news in the first place and whether whatever it is, it’s also worth paying for.

People nowadays will not, generally speaking, voluntarily pay for news. The ultimate question is why is that the case?

No single survey, regardless of source, accounts for the transformative effects that account for WHY newspapering as a commodified enterprise that has become infinitely replicable on the public Internet might no longer have a viable business model, at least not if newspapers persist in packaging news and audiences for advertisers as if nothing has changed.

Until and unless that deep structural transformation is squarely confronted by newspapers in terms of new content forms, and not simply incremental iterations of the old way of packaging news and audiences for advertisers, then newspapers should anticipate their possible demise as a viable business method for news diffusion.”

seanrox:
“Many of the market comparisons are shallow attempts at understanding *how* people use information today.

Newspapers are a unique proposition and haven’t focused on GROWING SUBSCRIPTION, HYPER-LOCAL COVERAGE & LARGE-SCALE INFOGRAPHICS for a very long time.

For lack of better example… consider the film industry. There are multiple options for consuming a movie with varying degrees of EXPERIENCE… from the most expensive: IMAX 3-D, down to network tv with commercials.

With a STELLAR product, we wouldn’t be having this conversation.

peace-
seanrox”

Measuring Web Activity with. . .Photoshop?

theWINNER:
“As a user of Omniture SiteCatalyst I am surprised but hopeful. I am willing to bet that Adobe is looking to become the only company to offer the full website solution package. It would be an offering that fills all the cracks; web design, content management, and metrics. If I am correct this would mean we are going to see them purchase a successful web content management company to go along with their new web analytics products. Adobe did not disappoint when they bought Macromedia and I do not expect them to drop the ball on this one either.”

Publishers and affiliates get all the fake blog blame

Paul:
“As an advertiser that has been running the continuity model since 2004 I think you only have half the story here. Try contacting a publisher – they hide better than cockroaches. Whois records are useless, the networks are complicit in this more so than the advertiser! Even better try convincing a network that there is a problem – they’ll hide behind the terms and conditions the pub “signed” and claim it’s not their problem. It is a fact that the flogs have put a serious dent in CPA marketing but it will survive.”

It’s the most visible and controversial piece of the equation, but without an actual product to promote, there would be no flogger. In the case of the fake blogs causing the ever increasing brouhaha today, it’s the company that produces the acai / resveratrol, work from home programs, government grants, teeth whitening, etc. How complicit the end advertiser is in how their product gets promoted, only they know.

If we look at the recent legal action brought by Oprah and Oz, they do not distinguish between the marketer of the product and the end advertiser, even though clearly there is a difference. With a product doing the type of volume that the pills have done, the argument of plausible deniability gets more difficult for them to make; but it’s not completely unreasonable to think a particular acai maker/distributor has not seen an infringing fake blog and/or is aware that their product is being marketed in such away, especially if that person isn’t from our industry. Many people from our industry when seeing how well these products started doing went into the distribution of product, but they are a different story.

The flog ecosystem has received an increasing amount of attention, but when we look at some of the mechanics behind it, what we are really talking about is a product with wide appeal, a company that can offer that product to a user in the free trial format, and given their business model can afford to pay a hefty cost per acquisition for a new free trial signup. When we focus on that, what we’ve described has nothing to do with fake blogs, as they are only the medium.

That business is the one of continuity, and they have been an indelible part of the performance marketing landscape, playing an ever increasing role in the monetization of traffic. Health and beauty continuity programs in particular have existed long before the advent of the flog and still are promoted flog-free; it just doesn’t seem that way at times. Behind the scenes, though, regardless of the existence of flogs, those at cpa networks for example continue to seek out new candidates that could become viable continuity programs.

Finding a continuity program to promote, though, becomes a tricky balance. A fully mature program, online at least, means a greater likelihood that the company has a strong marketing presence already. One extreme would be working with someone like Netflix – a perfectly great business built on continuity – but not the most exciting for those in the performance marketing space. Another example is a product that I came across years ago – a product that helped dieters know whether they were actually losing weight.

That it would be the perfect value-add for the acai guys is a different story, but basically when dieting, you can’t always tell by weight loss the effectiveness. You can do a simple test of one’s ph to know whether your body is losing weight. The makers of this product had a retail strategy in mind and wanted to sell it online, but they couldn’t come to grips with running a continuity program. Had I known then that companies existed to help turn a product into a continuity (from fulfillment to customer service), it might today be a successful campaign online, but it’s one of many in the could have been pile.

My experience, namely having met a company with a potential product to run online and advising them how they could scale it online, is an outgrowth of my overall interest in the space. Had I not only known about some of the component companies that could have made it a reality but more importantly made my living bringing these products to market, I would have spent a lot more effort making that happen. And, if that one didn’t happen, I would have kept hunting until I found one, as is the case with many people in our space.

Let’s assume, though, that I brought this advertiser to market, having explained to them the continuity landscape, what would have happened? I would have been seeing green knowing the scale that a continuity program with the right metrics could bring, but I’m quite thankful that it didn’t happen then, because I can almost guarantee the results would have been a disaster. There is so much more than meets the eye when it comes to the continuity landscape, and the world of flogs illustrates one such challenge – not knowing how the product could get marketed. As the advertiser, you knew it had potential, but you couldn’t predict, with a true product first point of view, that it would be promoted in a way that you wouldn’t haven given permission to in advance or told about once it started happening.

What we are talking about now from the advertiser’s point, from the perils of trying to cash in on the next big thing, is ultimately fraud. And marketing fraud is but one possible outcome for a new advertiser.

Courtesy of DM Confidential editor

His insights about the state of online advertising were inspiring, yet at the end I found myself frustrated. It’s exciting to see that the online advertising marketplace has grown tremendously and that there remains much more room for innovation; yet I am frustrated by the fact that in the online world we are own worst enemy. We have gotten so good at using terms like “clicks” and “impressions” that we have found a way to alienate those that are looking for marketing efforts that are not direct response driven.

Song shared the sobering facts that currently online marketing has a 30% share of a $68 Billion market for direct response, and only a 5% share of the $118 Billion Brand advertising spend.

To quote Song, “It’s not so good.” I agree – 5% of a $118 Billion Dollar budget? That is ‘not so good’ – especially when the online marketplace does have solutions that do drive brand awareness and PR. We just haven’t been very good at utilizing them.

First step I suggest to get us moving in the right direction is to recognize some of the existing tools that already exist and can be used for brand advertising.

For example, retargeting is one of the most valuable marketing tools for the Direct Marketer, but did you know that it can also serve as a tool for the company looking to build it’s brand and market awareness? Here are some examples we’ve seen some companies employ that are looking to build their brand in either a B2B or B2C capacity through retargeting:

- Site extension: When you really think about what retargeting is and how it works, it can be viewed as an extension of your website. The display ads you show via retargeting are like your site, but in miniature form. This allows you to keep in communication with individuals who have visited you in the past. What do you currently communicate via your site? How can retargeting enhance and strengthen this message? No better way to stay top of mind and create brand awareness.

- PR in a Banner: Who has visited your site in the past? It is more than just clients. It could be reporters, industry related companies, board members, and yes, even competitors. Use retargeted ads as a way to get your latest press release back in front of them.. If you have something you want to crow about, who better to do it to then all the people who have visited your site before? It doesn’t get more targeted than that. It’s an inexpensive and highly effective PR release vehicle.

- A recruiting tool: I’m always on the lookout for good talent for my company, and I’m sure your HR dept is too. Most likely you have a careers page or maybe a job board on your Web site. Use retargeting to show those who have visited career information on your site details about new job openings or the perks to working for you.

- Culture extension: An important part of your company is your culture, which is exhibited in your various communication tools. What better way to highlight a latest blog release? Blogs are an excellent way to allow people into your company and your culture. But if people aren’t aware of a new release (and they’re not regularly coming back to your site to check them out) you can use retargeting to get your culture out there.

- Give us a call: Using click to call tools in a display ad are an excellent way to create a conversation. Allow your clients to type their phone number into the ad and receive an inbound call or initiate a chat session when they click ‘submit’. Sometimes all it takes is a friendly reminder that you are still there and that you’re ready and willing to help them with anything they need.

- Giant Killer: You have a great product, a great site, and even a great staff – the only thing you have that isn’t ‘great’ is the size of your marketing budget. It doesn’t matter how big your company is. You can be a fortune 500 company and still have a budget that’s a fraction of your largest competitor. How can a company stay competitive, and stay within budget? Retargeting is one of the best ways to appear a big fish in an impossibly big pond. Retargeting is one of the cheapest ways to make your small budget seem huge – your ads will seem to everywhere that your customers go! Something your competitors may not be able to do.

Retargeting is just one example of how we can leverage existing technologies to increase our share in Brand Advertising spend. I’m sure there are others – what other suggestions do you have?

EMarketer notes that with with online expenditures rising from 10.6% of the total in 2008 to 12.2% this year, the rise in market share will occur despite a 0.5% drop in spending forecast for online in 2009, to $24.55 billion.

Total US advertising spending is expected to drop 13.3% this year. Myers’ previous forecast, from May 2009, projected only a 12.1% decrease. The firm pegs next year’s decline at 4.8% (revised upward from a 5.1% drop), with recovery beginning in 2011, at 1.1% growth. US advertising spending is expected to increase by 5.3% in 2012 to nearly $205 billion.

EMarketer projected in April 2009 that total US ad spending would drop 8.2% this year, and that online spending growth would stay positive, rising 4.5%.

After stopping to charge for its US Fantasy Football site, Yahoo is also considering dropping fees for its real-time stock quotes on Yahoo Finance, according to the Financial Times.  Jimmy Pitaro, head of its media businesses, said Yahoo’s online advertising is rebounding and the decision to drop fees for the football site was in line with Bartz’s long-term strategy.

“We decided the small amount of revenue we were generating from real-time statistics was not significant enough to justify presenting a less attractive user experience,” he told FT.

As the free model was installed, Yahoo also launched a related mobile appolication that was used to entice advertisers. Of course, even Yahoo believes there are still alternative streams, which would include charging for niche, valuable content, that could still work. And that is really the hard part. What content is so valuable that it can be charge for? And wouldn’t finance be one of those areas?

Rupert Murdoch said while advertising spending is nowhere near where it was in 2007, recent results have been “getting better every month and getting better every week.” The News Corp chief added that the US advertising market is going to get a nice bump and then it will settle back to a fairly slow recovery.

But the notorious anti-union executive also said that though Amazon, with its Kindle, is not sharing enough of its revenue, he believes eReaders will be the end of the print world. “Then we’re going to have no paper, no printing plants, no unions,” Murdoch told the Financial Times. “It’s going to be great.”

Murdoch didn’t divulge any major plans as the company moved toward a pay-for-content model, though he did say that The Wall Street Journal, one of the few newspapers that have successfully charged for online news, will start charging non-subscribers $2 a week to access content on mobile devices such as the BlackBerry, he said. Current subscribers will be charged $1.

For instance, whether we admit to it or not, many of us are quite competitive. We might know that we can’t beat Roger Federer, but we can’t help comparing ourselves to others. We like having a frame of reference, almost regardless of the subject. Some areas tend to draw more emotional involvement than others, these are ones where we tend to care more about how we compare.

And none seem to bring out the competitive spirit, than the question of worth and value like that of compensation. Hard as we may try, most people can’t help but want to know how they rank compared to their peers. That information can become a Pandora’s Box though, especially when people find out that others make more, especially when they feel they bring less.

The performance marketing world, especially that of the cpa network, has some highly paid employees. The nature of our businesses mean that many of those working for cpa networks can attribute their efforts directly to the bottom line. Typically, the more you can impact the earnings, the more money you can make. Excluding owners, the employees who tend to make the most either deal with the advertisers, or they deal with the publishers.

What makes these positions rather interesting is the level of transparency involved. One affiliate manager might not know exactly another’s salary, but they can figure out in the ballpark what their total compensation might look like. Most people receive a base salary plus incentives based on gross profit. The availability of stats means that they can make some assumptions about how they might compare to their fellow employees. By and large, there is some fairness to the system. There are always those who have the better accounts by luck or by some other gift and whose earnings bring about some feelings of unfairness. Usually, though, the cream rises to the top and the cream rakes in the dough.

Something funny happens, though, when top earners start thinking about their earnings; they often decide that they don’t make enough. This usually happens when they compare what they make to what they feel they make the company. Let’s look at a couple purely hypothetical examples.

In one scenario, it’s an account manager dealing with publishers. Their publishers earn the company one million dollars per month at a 20% gross margin. Doing the math, they earn the company 200k per month, annualized to almost $2.5 million. Typical compensation on the high side would mean an almost six figure base plus 7% of gross margin. (That’s on the high side. The more normal range is 3% to 5%.) Assuming a base of 84k, they would make $84k + ((.07 * 200,000)*12), or $252k per year. Let’s assume they had a really big book of business, one doing five times that amount, it would increase their yearly take home to just north of $900k. The company makes more than $10mm in profit, and they make almost one. That assumes an uncapped commission structure and/or are on the lower end. They could have made their company 5mm + in gross margin, but taken home $150k.

The $5mm to $150k gets especially divisive when those making the money see it going out the door. Those that own the company, have every right to use the profits how they see fit, but when done without discretion, it leads to some potential irrational thinking on the part of the employee. It’s not the only driver of the You’re Not Paying Me Enough Syndrome, but it sets it off pretty quickly.

As it’s human nature, you can pretty easily imagine what would set it off – lack of recognition, no pay increase despite performance increase, lack of communication, etc. The question is what should be done? Would increasing what one makes do the trick or would it simply set the expectation of continual increases? Or, have the two sides reached some sort of impasse.

As with every dispute, every side will feel empowered. The owners/management would hesitate to start giving away the farm for multiple reasons. One is that they put the infrastructure in place and they must pay for that infrastructure on an ongoing basis. Another is the precedent it sets for others, a flood gate of increased expenses. Yet another has to do with times like these where there is legal scrutiny.

The company needs a war chest to pay for unseen expenses and to fund future growth. When people at least feel part of the team, they understand some of the points that aren’t about them. For those who still feel themselves better served by departing because they aren’t getting their fair share, it comes down to risk. It’s a big financial risk, not just in lost income, but given that it might not work.

You might not be able to get the pieces together – offer, traffic, money for payouts, technology set up, graphics, etc., all with enough left after to pay you the same. Those ready and looking for that different type of headache, will do it regardless of what they make at a current job. That’s why the answer isn’t just to part ways and have both sides suboptimal.

The best solution is for both to be proactive and prepared. As an employee, be ready to discuss and have your facts but know too what it means to leave. As the employer, watch out for those contributing a disproportionate amount and realize how they could feel.

Courtesy of DM Confidential editor

For others it doesn’t involve appearing in it themselves, but still involves those appearing within its pages. As the brand has grown and become more commercial, a new level of access once only available to personal friends and celebrity invitees has become known – access to the Mansion. There are many great homes and beautiful estates, especially in Southern California, but only one referred to as The Mansion – The Playboy Mansion. Showing the true power of scantily clad and/or barely painted women roaming in their natural habitat (a large backyard with pool), events at Hugh Hefner’s home draw enormous interest, in spite of the decades out of style decor.

And, while always a draw, the Playboy Mansion has become a motivational tool used by businesses to increase sales, an especially effective contest when one’s constituents consist of mostly men with the emotional interests of a teenager.

Azoogle Ads could tell us first hand just how effective a Party at the Mansion is for business. They hosted an invite only event at the Playboy Mansion for 25 of their top affiliates along with a handful of other special entrants this past weekend. The contest didn’t happen overnight. It became made aware almost seven months ago, giving publishers and other potential entrants plenty of time to get their games ready.

Smartly, the contest compared two three month periods of time, with the winners being judged by top incremental revenue growth, as opposed to awarding the prize for top earners in a given month. And in a gesture that bespoke the caliber of the event, the trip included a stay at the W Hotel and a jam packed schedule of events for the winners. While Azoogle no doubt shouldered most of the financial burden, several of their advertisers sponsored some of the ancillary events. And what advertiser wouldn’t want to meet and be associated with such a weekend. These are some of their biggest sales people after all.

That Azoogle would host this event says much about them and how they like to treat their top performers. It might also say something about the nature of the industry. A skeptic would argue that no such competition is needed if the company has a differentiated offering. The counterargument would talk about the intangibles that come from the experience, the goodwill that such VIP treatment yields.

The skeptics point of view assumes no friction costs in switching and a purely rational marketplace. While the switching costs are generally low, the true barrier to switching is in the very thing time together yields – trust and comfort. People might be tempted to make five to ten percent more but not if it comes with uncertainty, e.g., does the company have a track record on paying, will they back me up if issues arise, will they protect my intellectual property, and so on. That track record is expensive to buy. If it were just about a prize, we would see more such contests.

In thinking about those who attended, it seemed worth looking into those who didn’t attend and why. Those who did go not only won the competition, but they had businesses that could plug into the current offerings. Switching costs don’t just apply for offers, they apply equally to traffic. The good news about those in attendance, they represent some of the best marketers out there.

One in particular wasn’t there. Who he is specifically isn’t important but why he couldn’t be there sheds a light on a topic that we don’t always ponder – the true challenge of gaining new, long-term partners not to mention keeping older ones. If I had to guess, were we to look at the top performers from most recent period and compare it to the top performers from the first period of the challenge, a good 30% from the former didn’t make it to the latter. That’s mainly a reflection on the changing landscape of performance marketing. In a world of primarily arbitraged traffic driving the majority of the volume, it’s hard to stay number one. People’s ability to trade media ebbs and flows, creating new entries and causing older ones to fall off.

When it comes to uncovering the new affiliate, it’s not easy for an affiliate to go from zero to meaningful traffic overnight. In the day of easy email or links off of site traffic, you could go from no one to someone pretty quickly in the eyes of a network. But now, especially in areas that are both highly competitive and require a decent amount of integration to start, that instant pop doesn’t happen. So we have a Catch-22 that goes on.

The unknown super affiliate is looking for some attention and the network/advertiser is looking for some proof. And since the advertiser doesn’t know the publisher, they don’t want to start out at the highest rates, which then makes it harder for the publisher to reach the level they can. It’s another reason why the switching costs are higher than we think. If you are in a network currently and doing well, they will start out at the higher rate for the other offer. But, that history doesn’t translate when trying someone else.

If, however, the affiliate can get started at the better rate, the pressure is on to perform, and as one told me, “people expect a miracle.” Yet, it often takes a while to figure out new areas. Effort in equals effort out in both cases. Each side has to give. The next super affiliate is out there, but not if the focus is on plug and play. And, like anything of true value, it will mean sifting through some noise before finding the signal.

Courtesy of DM Confidential editor

eMarketer noted that impression-based media buys are giving way, in some cases, to cost-per-lead advertising. According to the “Cost-per-Lead Advertising Data Report” from Pontiflex, marketers in North America were most likely to engage those leads via brand or community sites (51%). E-newsletters (31%) and free trial offers (9%) were also popular engagement vehicles.

“As is true for landing pages deployed in banner and search campaigns, collecting more information increases drop-off and reduces lead volume,” according to the report. For that reason, cost-per-lead advertising best practices recommend “capturing basic information during the first contact with the end consumer, and capturing additional information over time as the brand builds a relationship with the consumer.”

And according to Marketing Sherpa, it’s because some marketers take their time to do their research, and go beyond the recommendations of colleagues to arrive at their ‘short list’ of vendors. They also read and research relevant best practices, and wait to launch until they’re confident in their approach and just as important, have a plan for how names/leads, etc. from these sources will be identified, coded and, if applicable, treated differently than those from other sources.

And most important, the marketers of these successful campaigns, test vendors and lists prior to full engagements…testing registration forms and landing pages…testing programs to onboard leads from secondary sources.