Newspapers turn to readers for revenue help

Posted December 23, 2013

From MediaLife Magazine

By Bill Cromwell

This year, newspapers turned to readers to help offset their deep advertising losses. Newspaper subscription prices went up, and a growing number of papers erected paywalls to create a new revenue stream.

Next year the big trend in newspapers will be the continued move away from print advertising as their main source of revenue.

Papers will experiment with new ideas, some that blur the line between editorial and advertising, to make up for print losses.

Papers will begin to offer customized paywall plans instead of higher-priced one-size-fits-all options.

And they’ll continue their expansion into new services, such as integrated marketing, native advertising and web site building, that weren’t available a few years ago.

“The days of selling ‘space’ are ending, and the toolbox of the smartest publishers has grown dramatically,” says Ken Doctor, a news industry analyst and author of “Newsonomics: Twelve New Trends That Will Shape the News You Get.”

“Content marketing. Native ads. Marketing services. Custom video. Events marketing. The key is connecting these disparate arts (and buzzwords) into an arc of value for merchants. Those publishers who do it will succeed.”

It’s a lot of change for an industry that isn’t known for its ability to transform with the times.

After all, many argue that if most newspapers had begun charging for online content a decade ago, instead of giving stories away for free, they might not be having all these revenue problems.

U.S. newspaper advertising is on pace for an 8 percent decline this year, according to London agency Zenith Optimedia, and it forecasts 8 percent dips in 2014 and 2015 as well.

Though digital dollars have risen, they are not coming close to offsetting the loss in print. A Pew Research Center report last year found newspapers lost $15 in print for every $1 gained in digital advertising.

And the print dollars that have evaporated are not coming back. A recent study by Borrell Associates, a Williamsburg, Va., ad tracking firm, found that the percentage of small businesses investing in local newspaper advertising has fallen from 86 percent to 71 percent in the past year alone.

Paywalls were long seen as a way to make up for the revenue slide, and indeed they’ve shown promise. One third of the 1,380 U.S. daily papers now have paywalls, according to Zenith.

But as Doctor notes, most of these paywalls are simple, one-size-fits-all affairs. The coming year will spark more variance in paywall offerings, such as mobile- or tablet-only subscriptions, that better reflect the continuing changes in digital consumption.

That will also give ad reps new ways to sell.

“The smartest publishers are selling real, multi-platform brand reach to media buyers, and are increasingly able to back it up both with analytics and ability to change campaigns on the fly, given the immediate learnings of those analytics,” Doctor says.

As for the new content marketing initiatives, they will require newspapers to do a careful dance between editorial and advertising.

The lines have blurred in recent years, with front-page ads and sponsored wraps, and they will blur even further as papers offer social media marketing services or sponsored events.

“Within the integrated marketing push, the dance among advertisers, agencies and publishers is being re-choreographed. Who does what for whom, most effectively and cost-efficiently is the key question for all the players. There will be winners – and losers,” Doctor says.