Making the most of online revenue ops p.10

By: Jennie L. Phipps Web execs discuss various business models for publishing ventures

Since their humble beginnings, online newspapers have been busy trying to get a foothold on the Internet. Now they're consolidating and preparing to leverage opportunities and resources. The goal is to turn the Web into a profit-making opportunity that rivals the profitable print segment of the business.
A panel of seven representatives of newspaper online operations offered their viewpoints and practical tips to about 300 people who attended the business segment of the preconference sessions at Editor & Publisher's 10th Annual Interactive Newspapers Conference in Atlanta Feb. 17.
One of the areas to get the most attention was online classifieds ? a potential gold mine that everybody recognizes but nobody is fully exploiting. Craig Savage, director of Classified Ventures, a cooperative classified effort whose major newspaper partners include The Washington Post Co., Times Mirror, The New York Times Co., Gannett Co. Inc., Knight Ridder, Tribune Co., Central Newspapers, and McClatchy, talked about the $18 billion newspaper classified market. He predicted that by 2003, the Internet is likely to capture 23% of that market.
The bulk of that business will be in familiar areas ? homes, cars, and jobs. If newspapers are going to hold onto those dollars, Savage says, they're going to have to make a tremendous investment in technology and talent. After all, the competition includes companies like Microsoft which know and understand the potential for classified revenue.
But newspapers have long owned the classified business and that gives them a leg up on even the largest competitor, Savage says. "The classified business is yours to lose."
One newspaper company that has taken that warning seriously is the weekly Chronicle of Higher Education. Panel member Kathleen Collins, associate publisher for recruitment advertising, says her newspaper was the first to put recruitment advertising on the Internet. She estimates that 75% of traffic to her site is for job listings. And as the Internet has become more popular and better promoted in the print publication, the number of online users has grown 45% over the last three years.
Collins says that the growth in the use of online classifieds has been something of a catch-22 for the newspaper. While it is gratifying and ultimately profitable for readers to flock to the online classifieds, the circulation department fears that it will be at the expense of paid readership of the print product and its display advertisers.
To resolve that issue, the paper has adopted a subscription model. Print subscribers get to see the online classifieds before nonsubscribers, and they are also offered an enhanced online product that includes features not found in the print version.
Collins believes that in the long run the opportunities for her newspaper are not in duplicating classifieds online, but in using the unique features of the Web to capture advertising that print products have never been able to crack. For instance, she estimates that 10% of employment openings are advertised; 90% never are. Providing ways for job seekers to find those openings and for employers to fill those unadvertised jobs is an enormous potential market, Collins says.
Brad Mindich, director of online media for Phoenix Media Corp. and TPI, its personals subsidiary, scolded newspapers for not leveraging the information they collect on readers and advertisers. Mindich used a dramatic illustration of a single personal ad. Using voice recognition software and a program that was able to extract useful demographic and personal data from a voice personal, Mindich demonstrated that savvy marketers could target a personals user for the benefit of the paper and other advertisers.
Users of voice personals are usually forthcoming about employment, residence, interests, and hobbies. Mindich says his company will share this information with newspapers that use TPI and this partnership can result in advertising revenue from companies interested in this kind of highly targeted marketing. In his example, the personals user was a teacher who also had a second job, lived in an affluent neighborhood and liked hockey and bike riding.
In Mindich's scenario, the advertisers would have the opportunity to place ads on the linked page where the personals user went to get her results ? ads that only she would see. Mindich dismissed privacy concerns, saying that the information never left TPI and users have the option of not buying a personals ad.
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