By: Wayne Robins
You try giving the news away for free online, but advertisers won’t buy it. You try charging, but readers won’t pay for it. Between a rock and a hard place? Not necessarily. A middle option is registering increasing support, and industry observers believe that a substantial number of online newspapers will soon sign up for the concept: That is, registration.
Registration is free. You just want the person registering to cough up some useful information — and that may include as little as asking for a ZIP code — before using your site.
Currently, newspapers as large as The New York Times and as small as The Forum in Fargo, N.D., are requiring personal information for Internet users to go beyond headlines or the home page. So is The Columbus (Ohio) Dispatch. The Dallas Morning News is doing it, and other Belo destinations, such as The Providence (R.I.) Journal‘s well-regarded site (http://www.projo.com), plan to require registration in coming months.
“I’ve talked to about 25 major newspaper sites that will be implementing some form of registration in the next six months, and I predict that half of the major sites will have a registration strategy for at least part of their sites by the end of the year,” says Dave Morgan, the founder and ex-chairman of Real Media Inc. Morgan now runs a relatively new company, New York-based Tacoda Systems, which he describes partly as a “circulation service” for the Web publishing world.
“I’m betting on building a system for publishers to capture and profile their audience — to capture advertising,” he says. “It pulls information from things like registration, content-server logs, ad servers, and e-mail servers to help publishers build databases of audience members.”
The entrepreneurial Morgan, of course, has reasons to be bullish on online newspaper registration, since his company’s business model depends on it. But if he’s correct — and many in the newspaper and advertising businesses believe he’s on the right track — then free registration might finally be a way for the Internet to stop being a financial sinkhole for newspaper companies. The idea is to move them quickly from register to cash register.
But several issues remain troubling and/or unresolved: Does registration necessarily cause a drop-off in users? How single-mindedly should sites court “quality” registrants? Can registration work without inevitably setting up a “pay” system? And, for that matter, is charging for access a bad idea in any case?
Pay It Forward
The Dallas Morning News‘ site makes the purpose of registration clear in a mission statement called, “Why Register?” It is in the form of a letter from Eric Christensen, president of DallasNews.com.
“By having you register,” Christensen explains, “we are able to better target our advertisers’ messages, thus improving the effectiveness of their ads. Better results for our advertisers will help us grow revenues and ensure that we can continue to provide you with the quality online local news and information that distinguishes DallasNews.com — free of charge.”
The registration form requires your name, an e-mail address, and a password. You are then asked to check as many boxes as you wish in 16 alphabetically listed interest categories, such as “Automotive,” “Books/Literature,” “Computers/Technology,” “Entertainment/Movies,” “Stock Market/Finance,” and “Travel.”
The form also asks for your birth date and sex, whether you’re a current subscriber to the newspaper, and how frequently you watch partner WFAA-TV Channel 8. A mailing address and the all-important (for advertisers) ZIP code are also required.
“It is not for the faint of heart,” Tacoda’s Morgan says of registration. “You have to recognize it’s a long-term proposition, and recognize that traffic is going to fall off, and people are going to complain,” partly because of privacy concerns.
Others disagree with Morgan’s assessment. “Most consumers are pretty comfortable with the quid pro quo of giving some information for free content, so I don’t think there’s much falloff,” says Greg Stuart, president and CEO of the Interactive Advertising Bureau (IAB).
The benefits of registration, even if free, can eventually lead to profitability for newspaper Web sites as long as quality is maintained. This is the view of Mark Mirsky, media director, North America, for Tribal DDB Worldwide (the interactive network of the New York-based advertising agency). Quality content attracts quality users, which when quantified can deliver quality advertisers to buy online advertising. “It is a model that can work,” Mirsky says.
The New York Times on the Web (http://www.nytimes.com), was among the first and most successful sites to require free registration for access. The Wall Street Journal‘s remains an anomaly as a successful pay site because of Dow Jones & Co. Inc.’s valuable proprietary financial information. Yet, even its free online site, OpinionJournal (http://www.opinionjournal.com), is now requiring registration to read certain articles.
Recently, The New York Times on the Web redesigned its registration page, and added some new fields to the form — in other words, they’re gathering more information from registrants. The new wrinkles, aside from sex, year of birth (replacing age range), and ZIP code, include household income range and items selected from scroll-down menus such as job title, job function, and industry in which you work.
“More advertisers wanted to target based on the industry and job-function information,” says Stephen Newman, assistant general manager of The New York Times on the Web. “The information about our users in aggregate helps to create new products,” Newman says. “The ability to target advertising is obviously enhanced through registration, so you will see products more likely to interest you. That goes for our internal marketing as well.”
By new-product creation, Newman means everything from the New York Times Co.’s successful advertiser-supported Boston Red Sox e-mail newsletter via The Boston Globe‘s site (http://www.boston.com), to “Glory Days,” a for-fee look at material from The New York Times‘ baseball archives first made available last summer.
By expanding the registration route, Newman says, the Times is trying to develop more of a “two-way communication” with users. The locus of this, to be rolled out this month, is the online Member Center, which he describes as “a facility, a central location where users can manage all aspects of their relationship with us.”
He cites as an example the person who registers at The New York Times on the Web and moves from New York to California: “You can update that information, so instead of seeing ads for courses at NYU, you can see ads more apropos to the geographic location.” Members will have access to activity on their premium accounts (the online Times currently charges for crossword puzzles, for example), and there are some specialized products, such as collections of columns by Thomas Friedman and “Destination Hawaii” travel packages.
Knowing Me, Knowing You
Few newspaper companies have the resources of the New York Times Co., but even small, privately owned newspaper sites such as the Fargo Forum‘s In-Forum ( http://www.in-forum.com) have done relatively sophisticated research and development with their registration information.
The Fargo site may be the newest member of the registration club, adding the requirement in early December. “We are able to get a great handle on who is using our site,” says Paul Amundson, interactive media manager for the Forum Communications Co. (which also owns a Fargo TV station) and manager of In-Forum. “As a company, we have been able to direct promotional material — products, services, events — to our users via e-mail.”
The Fargo site spent considerable effort balancing the needs of its advertisers with the desires of its users. “We’ve been very proactive in responding and listening to those [buyers] who want more before advertising,” Amundson says. “We’ve increased ad sizes, added product offerings, sold packages, and now have the benefit of great demographic information.”
Amundson says that now, more than a month after requiring registration, the In-Forum site has only about 80% of its former user base, confirming the concerns about losing “eyeballs” to competitors. “We had concern about losing some market share and not wanting to drive people away,” Amundson says. “But the realization is that there is significant value to our product — and a simple one-time form is a small price to pay.”
The flip side — or, better, the corollary to that argument — is that if people aren’t even willing to give some demographic and ZIP code information, neither the site nor the advertisers is losing much should they just fade to somewhere else in cyberspace.
“Undifferentiated audience today is worth next to nothing to an advertiser,” Tacoda’s Morgan says. Morgan recalls an anecdote from the primitive days of audiotext, when one newspaper went from free service to charging 50 cents a call. A customer called to complain bitterly: “I used to call 16 times a day — now I’m only calling twice.” Morgan laughed, as he did the math: 16 times zero is zero, 50 cents times two is a dollar. “It was less audience for us, but much more valuable.”
Sign Here, and Here, and Here
There are alternatives between being totally free and requiring registration as a front-page “firewall.” Many newspaper companies are trying what some call “incremental” registration.
“We’re heading in the same direction as our sister Belo Interactive sites,” says Sean Polay, news and information manager of projo.com. “We’ll be following the DallasNews.com model — requiring registration a section at a time to phase it in.”
Newsday.com requests registration for some specialty areas, though not for any of the main news areas. If you want to customize your TV listings or create a stock-tracking portfolio, you need to register, according to Peter Bengelsdorf, director of publishing development for Newsday in Melville, N.Y. The Tribune Co.’s Long Island powerhouse is planning further free-registration offerings, including automated searches, ZIP-code-related weather forecasts, or automatic interest-matched searches. “We are not planning to require it for the whole site,” he says.
This incremental concept is a favorite of the IAB’s Stuart. “What I’m suggesting is to imbed data collection and registration throughout the site, not just at the front door,” he says. “If people want their weather in a particular area, and you ask them to give their ZIP code, that’s providing them a service. And having a ZIP code is a significantly better mechanism to allow a marketer to target a consumer rather than the vague boundaries of a metropolitan area.”
Free Enterprise System?
Most newspaper dot-com executives dismiss the notion that registration is the first step down the slippery slope towards charging for access. But some are skeptical.
“Whenever I see people starting registration on their sites, I suspect that they’re dipping their toes in the water and will eventually start charging for access,” says Donn Friedman, assistant managing editor of technology, production, and new media for the Albuquerque (N.M.) Journal.
Friedman says that the New Mexico site (http://www.abqjournal.com), which does charge for access, found that the costs of assessing free-registration data would be prohibitive. “It gets very expensive unless you’re one of the biggest newspapers or part of a big chain,” Friedman says. “We have about 150,000 unique viewers on our site, so we don’t have the volume to do some of the targeting that advertisers want to do.”
Albuquerque’s situation may be unique, and most observers think the cost of charging for content is far greater than the potential revenue, and that free registration represents a better business model.
“Our [industry’s] online product doesn’t add enough value to a consumer’s life that very many will pay for it,” says Tacoda’s Dave Morgan, “and I do not agree that we increase the cannibalization of the print product by giving away a free online product.” Registration, Morgan believes, will give advertisers the incentive to stick with newspapers and their Web sites.
“The marginal cost of delivering information online is incredibly low,” Morgan says. “As a newspaper industry, we have to confront the fact that readership is dying, that we print more obituaries than birth notices. If our businesses are going to grow, we have to find a way to expand the way our products touch consumers, and online is a great way to do it.”
As Tribal DDB’s Mirsky puts it, “With all the vehicles that are out there, you can always get the eyeballs, but there’s more value in [registration-]qualified eyeballs. With registration-based targeting, people have defined themselves, so we see great value there.”
Does that register? If it doesn’t right now, it probably soon will.