Revenue Strategies That Work
Posted: 8/2/2013 | By: Nu Yang
The industry is evolving, and so is the way we are making profit. The Newspaper Association of America recently reported that total revenue for U.S. newspapers declined 2 percent in 2012 from the previous year. That’s nothing new to us in the industry, but instead of waving a white flag, publishers are exploring several revenue strategies. Although print advertising still plays a big part in revenue—the NAA projected that newspapers made $18.9 billion from print advertising in 2012—publishers have found other emerging money-making opportunities without abandoning their core product.
Below, we discuss five traditional and non-traditional revenue strategies that are working for publishers.
Becoming the agency
There’s no doubt that a newspaper’s brand is one of its most valuable assets, so it only makes sense that news organizations are also moonlighting as online marketing and digital agencies. In Canada, the Star Media Group, publisher of the Toronto Star, has created the Star Content Studios (starcontentstudios.com). According to vice president of strategic investments and new ventures Ed Greenspon, the in-house agency provides commercial content for the Star’s advertising department and for brand publishers seeking content creation and curation for their owned media properties.
With 30 years experience in the newspaper business, Greenspon was hired in 2010 specifically to find and develop new business opportunities for the media company. As a result, Greenspon assembled a Strategic Investments and New Ventures team, which includes himself and two business specialists.
Greenspon said the Star Content Studios was conceived after speaking to Star publisher John Cruickshank a few years ago. “I realized that everybody is a publisher now,” Greenspon said. “But what was missing was that brand advertising and content marketing. It doesn’t have that package or pizzazz. It also needs a constant relationship and it’s in the DNA of a newspaper company to feed that relationship.”
Greenspon said the content studio was able to free up time for the editorial staff to focus on journalism and not be distracted by the commercial need for content. Although the studio shares the same name of the newspaper, Greenspon said, “It shows we’re different from the traditional newsroom; we’re more like an in-house agency.” The team includes journalists, marketing specialists and social media strategists.
Using the agency’s motto of “Authentic Storytelling,” the studio creates content for a variety of media including video, digital, social media, custom magazines and webinars. The content may also be included in a special printed section in the Star.
Greenspon said they created a successful 17-week campaign for the Heart and Stroke Foundation in Canada featuring stories from survivors, health promotions and digital infographics. He said they also utilized the Star’s story archive to find stories on healthy eating and exercise. The campaign was honored with a Pearl Award by the New York-based Custom Content Council for original and curated content.
Greenspon said his goal is to find businesses adjacent to the Star brand. “As a media company you have to ask, ‘How do we lend a hand without getting in the way?’ We want to give these businesses a lift and give them a better chance of success.”
Another media company entering into the digital agency realm is the Gannett Co., publisher of USA Today. Founded in 2007, the Gannett Imaging and Ad Design Center (giadc.gannett.com) is an extension of Gannett Publishing Services and was formed to consolidate imaging operations across the company-owned papers. In 2008, the center began to offer imaging services outside of Gannett papers. The following year, the center expanded to digital and print ad production to Gannett and non-Gannett publications. With offices located at the Des Moines (Iowa) Register and Indianapolis (Ind.) Star, the group has 400 staff members, specializing in pre-media services ranging from advertising campaigns to ad productions services.
“At the beginning, it was about the cost-savings,” said business development manager Connie Gallagher. “But as we further went into it, our top priority became about quality and we saw a huge increase in quality because we now had a staff devoted to the operation.”
Adding non-Gannett papers was an additional revenue stream for the company. “It was a logical choice,” Gallagher said. “We were already offering it to 80 Gannett papers and we saw it as something that would be beneficial to the overall industry. We are an actual media company offering our services…this is our business.” Clients outside the Gannett papers include 31 non-Gannett papers and 17 broadcast stations.
The group offered imaging as its first product. This feature includes optimizing images for print or Web and offers creative services such as custom Photoshop work.
Ad production is focused on print and digital design. The group’s print portfolio includes newspaper and magazine ads, pre-prints, special section layouts and marketing materials. Digital customers are offered a variety of media experiences for mobile and desktop, including banner advertisements, rich media, videos and augmented reality.
As a digital agency, the group’s creative campaign team partners with sales staff to find original ways to generate revenue and execute advertising campaigns. The center recently helped the Des Moines Register launch augmented reality into its marketplace.
The Lawrence (Kan.) Journal-World first subscribed to its imaging services about six years ago. Last November, the paper’s parent company, the World Co., entered into an agreement with the center to produce print and digital ads for the publication, becoming the group’s first non-Gannett client to do so.
“We were looking for a way to reduce costs and improve our turnaround time, and they accomplished both,” said Journal-World production manager Ed Ciambrone.
Ciambrone said outsourcing was a challenge because there is a need to “do it yourself,” but “(they) couldn’t ignore the cost savings involved.” He added that keeping the business in the U.S. was also important to the company.
“It’s difficult but necessary,” he said, referring to outsourcing. “We’re a family-owned business, and cutting staff is always difficult, but in today’s environment, we have to reduce our costs where possible.”
Like Gannett, consolidation was one of the reasons why Times-Shamrock Creative Services was created. Located in Scranton, Pa., Times-Shamrock Communications is a family-owned company that manages more than 28 print and radio properties throughout the country. TSCS offers production, print and Web advertising design, photo toning and spec ad programs to daily newspapers, weeklies and magazines.
In March 2012, DMNmedia, the paper’s marketing solutions group of the Dallas Morning News, created 508 Digital (508digital.com), which offers digital marketing solutions to small and medium-sized businesses in the Dallas/Fort Worth, Texas area. Services include website and mobile website design and hosting, video production, search engine marketing, search engine optimization, mobile advertising including SMS (text) marketing, email marketing and social media development.
The Los Angeles Times and Wall Street Journal also offer digital solutions: the Times Plus Digital Services and Wall Street Journal Digital Network, respectively.
News organizations are also branching out into event marketing. For consumers and advertisers, the local newspaper is still the most trusted resource to host and sponsor events.
For 17 years, the Arkansas Democrat-Gazette in Little Rock, Ark. has produced a bridal expo in the region. Promotions, events and sponsorships manager Tabitha Cunningham took over the Arkansas Bridal Community (arkansasbridalcommunity.com) product seven years ago. In that time, she has seen the event grow from one show to five shows a year and expand from Central Arkansas to Northwest Arkansas. Cunningham produces two of the events.
Cunningham said she saw a need to grow because “engagements and planning periods are getting shorter…and we had to get to those brides who drove three hours away to get to the show.”
Attendance has also increased over the years. Cunningham’s first show saw 1,500 attendees and numbers have now doubled to 3,000.
Getting vendors to participate each year plays an important part in the event. “We start marketing a year before the show,” Cunningham said. “We send out reminders and promos six months out, and then three months before, we call them directly. We usually sell out space at every show.”
According to Cunningham, booth space has doubled during her tenure and vendor space has expanded from two halls to four halls at the convention center to make room for 200 booths and 150 active businesses (some exhibiting in two booth spaces).
According to the show’s website, more than $200,000 worth of advertising is used to promote the show, including print media, such as in the daily Democrat-Gazette, its weekly publication, its lifestyle magazine and a bridal planner produced by the paper. Other marketing efforts include radio, television, email blasts, direct mail, postcards, posters and online advertising.
The daylong event features a fashion show, live music and contests. “The challenge is making both the bride and the vendor happy,” Cunningham said. “We put the bride first and the vendor second, but the secret is to listen.”
She added, “In our market, a lot of our events are already established. (Publishers) shouldn’t underestimate events as revenue generators. It offers existing advertisers a new opportunity and it also captures new advertisers. It’s also a branding experience. We’re lucky we have the paper to back us up and to use as a marketing tool.”
The paper also puts together High Profile, a special Sunday section that highlights a handful of brides complete with wedding parties and color photos. “It’s another way to show the power of the newspaper,” Cunningham said. “People still want to see their name in the paper.”
Cunningham said in the last six years, revenue has grown by 200 percent and more businesses are joining as sponsors. “We have an entertainment company that has attended the last six or seven years,” she said. “That DJ now performs between 30 to 40 weddings a month and he said that growth is because of going to the bridal show. He now works with us as a sponsor.”
Cunningham shared that the company keeps 30 to 35 percent of the revenue. “If you break even, that is a successful event.”
What makes Democrat-Gazette events stand out is their brand, Cunningham said. “Readers trust our brand in the market…others have tried to come in and do their own show—some from out of state—but we live here, and we’re fully engaged with our vendors and their success.”
As newspapers compete against TV and radio events, Cunningham said the key is to look at your market and find your niche. “Advertisers will advertise outside of the newspaper, so why not create that event for them? Don’t have your advertisers go outside of the company. Instead, reach for new platforms.”
The Democrat-Gazette isn’t alone in this venture: thousands of people attend the Los Angeles Times Festival of Books every spring, the Boston Globe puts together community events like a Summer Arts Weekend, and the Wall Street Journal hosts conferences that bring together industry, finance and government leaders.
Adding more readers
Whether you’re the New York Times or the Idaho Press-Tribune, digital subscriptions are breathing new life into circulation revenue. Tim Griggs, executive director of cross-platform monetization at the Times, told the American Press Institute that two years after the launch, the paper now has close to 700,000 paid digital-only subscriptions. Total Sunday circulation has topped 2 million dollars.
In its “Developing and Executing a Paid Digital Revenue Strategy” report, the Newspaper Association of America stated newspapers have been experimenting with a variety of paid content models: a metered model, where users can access content for free until they hit a specific number; a subscriber content model, where content is only accessible to paying users; and a two website model, where newspapers are dividing their material through a free and a paid website.
Some newspapers like The Day in New London, Conn. offer a Web-based rewards program for their digital subscription packages. The Day passport provides exclusive access to discounts, giveaways, and member events at local venues and attractions. Director of marketing and audience development Daniel Williams told E&P last year (“Building the Wall,” December 2012) since the program launched last year, it has generated more than 1,000 digital-only members and around $100,000 in revenue.
As more readers transition to mobile devices, publishers are finding ways to also go digital. The Pew Research Center’s State of the News Media 2013 reported that total digital advertising (including mobile) rose to $37.2 billion in 2012, a 17 percent increase. The report also found banners made up the largest segment of display ads, followed by video ads, rich media and sponsorship ads. Local targeted ads are also on the rise. Borrell Associates reported that local digital ads grew 22 percent in 2012 to $19.9 billion.
Some new organizations are looking beyond advertising when it comes to digital. The Los Angeles Times recently launched The L Shop, a new online shopping website featuring exclusive deals from local merchants, coupons and other discounts. The shop also offers L.A. Times-branded merchandise, back issues, sports gear featuring local teams, a Times photo shop and a chance to join the Times wine club.
News organizations are also looking into electronic books to make a profit. The Minneapolis (Minn.) Star Tribune e-book collection features a fiction novel, coverage of a NFL player’s road to recovery after a major surgery, a cookie recipe book and a history book centered on the U.S.-Dakota War called “In the Footsteps of Little Crow,” which sold 2,000 e-books last year. The Boston Globe has also launched a number of e-book initiatives including a biography on John Kerry and a book on Boston criminal Whitey Bulger written by Globe investigative reporters.
Going digital means going to where the readers are—and that includes mobile applications. Results released from the Alliance for Audited Media (formerly the Audit Bureau of Circulations) 2012 digital publishing survey showed more publishers are charging for their mobile content on different platforms. Fifty percent of newspapers are charging for content on an Apple iPad and 42 percent on an iPhone while newspapers are only charging 15 percent of content on Android devices.
Staying true to print
Even though news organizations are searching for new revenue streams as print advertising declines, publishers are still finding creative ways to showcase their core product.
For example, the Wall Street Journal launched WSJ Magazine in 2008. The monthly luxury magazine reaches a global audience of 3.5 million and has a global circulation of 1.6 million. The New York Times found a way to incorporate both its printed newspaper and its New York Times Magazine by including the magazine in the Sunday edition of the newspaper.
Finding these niche markets has also been successful for Greenspon and the Star Media Group. After talking to the vice presidents and advertising department, Greenspon said they learned they were missing out in the fashion and beauty market. Last year, Greenspon and his team acquired The Kit, a small, digital beauty magazine, which had been launched by several veterans of the women’s magazine industry. Although The Kit was a fairly new website, Greenspon said it had the enterprise in beauty and fashion and deep relationships with advertisers they were looking for.
“We relaunched The Kit in the fall of 2011,” he said. “It used to be just a digital magazine, but we reverse-engineered it back into print.” A printed version of The Kit is included weekly in select copies of the Toronto Star, Vancouver Sun, Calgary Herald, Ottawa Citizen, Edmonton Journal and Montreal Gazette.
Greenspon said The Kit has increased revenue four to five times in the fashion/beauty market. He said the Star’s niche publications are able to find a smaller, but dedicated audience. “We see an opportunity to go deeper into categories. We’re able to serve people with greater depth and target audiences for our advertisers.”