Where To Focus News Site Strategy, Part 2

By: Steve Outing In my last column, I started to present some ideas for where online news operations should focus in the coming year. The primary emphasis, I suggested, should be on developing an online shopping or online transactions strategy and implementing it quickly. Today, more on that and onward to other ideas, with the help of four leading consultants in the interactive media field.

Mark Potts

Potts, who consults for leading media companies and is a former staffer (and current consultant) at washingtonpost.com and @Home, puts e-commerce at the top of his list of priorities for news Web sites, too. "If 1998 was the Year of the Portal, 1999 is going to be the Year of E-commerce," he says. "This is the new advertising ? it's all about transactions, and service to readers, and service to advertisers, and newspaper sites need to move aggressively to offer shopping services to their readers [probably through partnerships]. At washingtonpost.com, we've gone so far as to embed those shopping services right into the content of the site, so that if you're reading a review of a new novel, you're one click away from a list of prices for that novel from leading Web merchants. That's all about capturing readers right when they make a buying decision, and helping them act on that decision ? and collecting a small piece of the action, as well."

Potts also says that news sites need to work aggressively with local merchants "to get them online and playing in the e-commerce game." He envisions the day when news sites are able to sell advertisers "a solution, which will include the software they need to compete with the big online merchants, hosting services, and maybe even more."

While e-commerce is Potts' top priority for 1999, he also believes that local and regional newspaper sites should aggressively establish themselves as local portals to their users, an idea that has been adopted by an increasing number of newspaper Web sites, but not to a large degree throughout the news industry. "Readers already come to newspapers ? in print and online ? as sources for information of all kinds. It's logical to extend that metaphor to the Web. Readers should feel that if they need to know anything online about their local community, the newspaper site is the place to look for it."

He also recommends that news sites add Web-searching capabilities. "Many readers, piqued by something they read in the paper, head for Infoseek or Alta Vista to search for more information; there's no reason why newspapers can't offer that to their readers and not lose traffic."

Eric Magill

Magill runs Cyber Weekly Consulting, which focuses on online strategies for weekly newspapers and smaller publishers. This former newspaperman has his work cut out for him convincing those publishers to make a serious run for the money on the Internet. "Weekly publishers would never print a newspaper with little sales, circulation or editorial effort, but in my reviews of nearly 300 weekly newspaper sites, I see little effort from 90% of online weeklies in those areas," he says. "Weekly news sites need to be a lot more aggressive in 1999."

Foremost, small publishers who have yet to make a commitment to doing business on the Internet need to realize that there is the potential for earning significant money online. Magill points out that Forrester Research predicts that the Web site design business will grow to nearly $16 billion by the year 2000, and that's an obvious online area to focus on for a local weekly. "With relatively small investments, weeklies can exploit proven revenue models to develop online businesses that rival their print businesses," he says.

Magill suggests that small publishers who've yet to grow an online component to their businesses do the following:

"Develop online publishing business plans. I see little evidence of planning at most weekly sites." "Build interactive news and information sites that serve as their communities' window to the world." (This echoes Potts' call for local news sites to become local "portals." Magill suggests that even small newspapers can and should adopt this strategy.) "Sell site design and Internet marketing and advertising services as aggressively as (they do) their print advertising services." "Aggressively market their news sites and clients' sites, online and offline." "Weekly newspapers must commit to online publishing and not treat it as a hobby," Magill says. "Without (that commitment), they will see more of the same in 1999" ? in other words, pouring money into a Web site that few people use, and that generates less revenue than expenses.

Peter Zollman

Zollman, principal of the consulting company Advanced Interactive Media Group and the author of two recent interactive media research reports for Editor & Publisher, says that for 1999, online news managers need to "concentrate on the basics of building an audience and helping advertisers connect with that audience. ... Too few (Web sites) pay close attention to their two primary constituencies, audience and advertisers."

Each time you add content to your Web site, ask yourself the question, "How will this build my audience?" And each time you work to develop an online advertising relationship, ask yourself, "How can I serve this advertiser with an audience?" he says.

Here are Zollman's strategic recommendations and tips for 1999:

"It is imperative to participate in electronic commerce. Even if it's just a limited application at first, any site that doesn't get involved in e-commerce will get left out." "Improve your classifieds. Build a better mousetrap." "Promote, promote, promote. And for newspaper sites, promoting exclusively in the newspaper (which is inexpensive) may not be the kiss of death ? but it may be." "Think about interactive television, and plan for it. It's coming faster than you realize." "Don't forget your lowest-common-denominator user, the one with a 14.4 modem and a 386. Not everyone has been able to upgrade." "Advertising is content. Exploit it that way." "Research what your users are using, and respond to their needs and desires." Norbert Specker

Specker is an interactive media consultant (who splits his time between Europe and Canada) and organizer of the annual Interactive Publishing conference held each November in Switzerland. He points out that in Europe today, more options ? such as regional Web search and directory opportunities ? are available to online news publishers because niche players are not as firmly entrenched, leaving more openings for strong news media players to become the European online stars. He advocates taking a pragmatic approach, acting on opportunities as they arise and on those opportunities that can be demonstrated as viable.

Specifically, Specker suggests that local news publishers should "fill the local search engine/info gate gap, because you are still the logical entry point in your local market for most users and most businesses in your market. Living up to this expectation will give you the long term credibility that your newspaper already has."

The most important and promising trend, Specker suggests, is to "cross publish" in order to extend the existing newspaper or magazine (or other) brand, and open up opportunities for doing business with new advertisers and expand business done with existing advertisers. "The basic question is: How can digitally produced/accessible content be used to extend and better sell the home brand? By cross-selling, cross-advertising, cross-editing, cross-subscribing, etc., many real synergies can be leveraged." Increasingly, he says, publishers will produce "from the Web out" to other media such as print and television.

Specker agrees that e-commerce and online transactions will be a significant trend in 1999. "It is about time we re-connect to the real world out there," get away from our technology focus, and start serving readers and advertisers, he says. "That means also re-connecting to the physical newspaper and to many physical devices that are out there beyond the computer, most notably the phones. But of course it also means connecting ourselves with our advertisers, the shop owners and their physical products. That is your transactional scheme."

He has some words of caution for news publishers eyeing the online shopping space. "In the long run, I do not think a newspaper brand can become an (excellent) online mall or custom publishing product online without losing its original branding. Chances are it will be caught in between and be neither here nor there. In other words: A newspaper cannot become a mall without stopping to be a newspaper. A newspaper cannot become a custom publishing tool without stopping to be a newspaper. All this says: Do not leverage your newspaper brand into mall building. If you think (online) mall building is a good business, make it a new business."

Final thoughts

What will be new for 1999 in the interactive news publishing world? My own view, which seems to be confirmed by my four colleagues, is that online transactions will be where much of the industry focuses its energies this year. My colleagues also suggest that local news sites still have a lot of work to do to in leveraging existing strengths to become the online "local portal" for their communities. That's not new ? the Internet industry spent much of 1998 obsessing on the idea of "portals." But for news sites, there's still much work to be done which will carry over well into 1999.

None of my colleagues mentioned it, but I expect "community publishing" to continue to make gains as more publishers realize that a program to allow community organizations and individuals to self-publish under the aegis of the local news site will go a long way toward making local news sites into true local portals. The kind of local information that a community publishing program developed by a local dominant news publisher can collect cannot be easily duplicated by even the most powerful national players who enter local markets. Combine that with online commerce applications, and you've got a powerful online engine to serve consumers and over time make a substantial profit.

Contact: Eric Magill, emagill@dca.net
Mark Potts, mpotts@cais.com
Norbert Specker, nspecker@interactivepublishing.c h
Peter Zollman, pzollman@aol.com

What's wrong with 1% clickthroughs

In reaction to one of my recent columns about e-commerce, which "hit a nerve," Kurt Wanfried, Internet director of The Sentinel in Carlisle, Pennsylvania, wrote:

"I can't understand why people see a 1% clickthrough rate for banners as bad. After all, newspapers, TV and radio have no clickthroughs at all. And while it could be argued that yellow pages produce clickthroughs (or 'dialthroughs'), certainly the rate of those who pick up the book calling any particular advertiser is well below 1%.

"So I think it's unfair to focus so much on clickthroughs to measure the effectiveness of online advertising. Banners still serve the same time-proven purposes on Web sites that ads and commercials serve in newspapers, TV and radio. That is, they increase name recognition, brand awareness. ...

"Certainly, good banners and/or offers will increase clickthroughs. And 2%, 3% or 4% is better than 1%. But we're selling our medium short if we pooh-pooh the value of an ad simply because it doesn't produce a high clickthrough rate."

URL oops

In my recent column about online transactions, I cited an incorrect Web address for Pinpoint Communications. The correct URL is http://www.pinpointcomm.com.

New Year's break

The next Stop The Presses! column will appear on Wednesday, January 6, 1999. I'm taking off on the New Year's Day holiday on Friday and taking an extra day of vacation on Monday. Happy new year!

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Got a tip? Let me know about it

If you have a newsworthy item about the online news/interactive news media business, please send me a note.

This column is written by Steve Outing for Editor & Publisher Interactive. Tips, letters and feedback can be sent to Steve at steve@planetarynews.com


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