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#wef12: WSJ’s Raju Narisetti on ‘copycat’ paywalls and the ‘golden’ future of digital advertising

September 4th, 2012 | 1 Comment | Posted by in Business, Online Journalism

Raju Narisetti from the Wall Street Journal, pictured speaking at the news:rewired conference, earlier this year

Speaking at the World Editors Forum on Monday (3 September), managing editor for the Wall Street Journal’s digital network Raju Narisetti said he had concerns about many US “copycat” paywalls, and whether they would be able to generate the necessary revenues to succeed financially.

Instead, he predicted that “the golden age of digital advertising lies ahead of us” and that by “running towards paywalls” news outlets may be missing the challenges of the future, such as the mobile consumption of news and the need to produce content which can travel with its advertising to platforms outside the news outlet’s own.

I caught up with him after the session to speak to him more about his views on digital business strategy, “copycat” paywalls, and why he thinks smaller news brands shouldn’t be “throwing the advertising baby out with the bathwater”.

I think most US metro papers are looking at the New York Times and saying let’s follow their model, whether it’s 20 free stories or 30 free stories, it’s a metered wall, and I think the New York Times has seemed to have pulled it off but I think a lot of smaller papers will find that the content they have is not going to be enough for people to want to pay.

My worry is that you’re throwing the advertising baby out with the bathwater saying ‘oh advertising rates are falling, it’s a no-win situation’. As you saw, as an entire global industry, we only get 2 per cent of digital advertising, so my concern is why are we not focusing on the advertising end of the business which is … much larger and is growing, rather than focusing on the subscriber end of the business where we’re going to have a much harder time convincing people to pay for content?

News outlets should instead be asking “how should I expand the pie?”, he said. Narisetti added that part of the opportunity in the digital advertising business will require news organisations to do more to understand audience interactions with adverts.

As an industry we know our readers very well, we know what they do what, what they read, where they come from. Why is it that we haven’t invested enough to know how they interact with advertising and taken advantage of that?

He said some news outlets have “abdicated the responsibility of understanding their advertising behaviours and then taking advantage of that”.

Instead, “we’re just selling eyeballs as opposed to selling our knowledge of our reader behaviour”.

We know so much about what they consume … why don’t we know what advertising works for our readers then? We’ve just ignored that.

So why does he think news outlets without that are moving in the paywall direction? Factors include a “me too” mentality, he said, where news outlets see another succeeding and want to try it too, in other cases it may be seen as a “defensive mechanism”, he said, “to say it will stop people migrating from our print to our website”.

But this could be missing a bigger issue, he warned.

My point is that increasingly readers have the opportunity to be more and more promiscuous because technology allows them to go anywhere …

While we’re all on a journey of different speeds on, say, this information highway, there’s probably going to be a big mobile wave coming behind that will put all of us in a relatively level playing field. How do you monetise mobile… how do you create stickiness, is something we should be thinking about now rather than worrying about our website which are increasingly seeing fewer and fewer people come.

… I’m not sure we’re going after the right set of problems.

The Wall Street Journal “never gave its content away for free”, so it does not face the challenge he has highlighted for others of trying to charge for content that was once free. And of course other paywalls are also seeing success, but his argument is that digital advertising is far from being fully maximised and paywalls should not necessarily be the first answer for everyone.

If you have a paywall that’s working, more power to you, but if you’re going to jump in feet first or head first, think a little about what’s going to work rather than just saying the [New York] Times is doing it, let me follow.

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Jeff Jarvis: ‘Journalism has a model built on entitlement and emotion, not economics’

Jeff Jarvis keeping an eye on City professor George Brock. Image: Wannabe Hacks

Journalism is labouring under a business model based on entitlement and emotion, not economic reality, said leading media commentator Jeff Jarvis today at City Unversity’s Sustaining Local Journalism conference.

We need to understand the business model. I’m tired of the argument that journalists ‘should’ be paid, what successful business model was ever built on the word ‘should’?

Virtue is not a business model, just because we are doing good things that doesn’t mean we should be paid.

He said it was a model in need of disruption.

Some of my colleagues don’t like it when I use that term, disrupt. But welcome to the jungle.

We are a business that has to add value to the community in order to extract value back.

Jarvis set out three ways he thought that hyperlocal sites could make money in a difficult market space:

Developing new products and services to sell
Events (he cited US blogs running flea markets and buying club events)
The creation of sales networks

He only elaborated properly on the last of these, saying that individual bloggers are usually too small to interest city-wide advertisers but grouping together in a network can make them much more of a force to be reckoned with. “When it comes to journalism, he said, “we are better off doing things together”.

Philip John, director of the Lichfield Blog, blogged in March about the need for hyperlocal sites to build networks, writing that they bring about “a sort of collective consciousness whereby an improvement to one site is an improvement to all”.

With the likes of Addiply founder Rick Waghorn and Talk about Local’s Will Perrin acknowledging earlier in the day that just turning a profit as a local or hyperlocal blogger in the UK was rare, it was surprising to hear Jarvis talking about local blogs in US cities of 50,000–60,000 turning over $200,000 a year.

Jarvis admitted that is was a hard slog for hyperlocal sites to bring in ad money, but argued that there was a return in building networks. Giving AOL’s huge hyperlocal network Patch as an example, he said Patch was hiring a journalist for each of it 150 sites and paying them $40,000 a year. AOL wouldn’t be doing that if it didn’t think there was ad money there.

Asked whether journalists should be concerned about conflating journalism and sales – a recurring theme of the conference – Jarvis cited the example of Rafat Ali, founder of paidContent, who he said “had to go out and sell the ads at first, but retained his own moral compass”.

“It is probably our job as educators to guide students in these things”, he said, adding that in the end it is all down to credibility, which can be maintained even if a journalist is pitching in with the business side of things. Maintaining credibility is vital, he warned.

“If you lose credibility you lose your value.”

Also from today’s #citylocal conference: Hyperlocal ad sales and ‘the age of participation’

You can see a Chirpstory of some of the best tweets of the day at this link.

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#citylocal: Hyperlocal ad sales and the ‘age of participation’

Community participation is key to selling ads around local and hyperlocal content, Rick Waghorn told the audience at today’s Sustaining Local Journalism conference.

Waghorn, who founded local ad sales platform Addiply, cited the example of Howard Owens, publisher of New York hyperlocal site the Batavian.

Owens, he said, was a “hyperlocal superman” for turning a profit from ads on his site. The reason for Owens’ success? P2P. That’s “person-to-person”. Waghorn praised Owen for participating in the community that he covers, knowing the people, and knocking on doors to get ads.

It’s P2P that will make hyperlocal ad sales profitable, said Waghorn, not algorithms.

Borrowing a term from Emily Bell, he said that we are in “the age of participation”.

Editorial is participative and local, why shouldn’t advertising be?

But Owens’ is a rare case, said Waghorn, stressing that hyperlocal publishers in the UK need to get more comfortable with participating in the community for ad sales.

We can’t all be Howard Owens. You look around the hyperlocal scene in the UK and the art of selling is lost on most people. Is is a different, different trade craft to finding a story.

It strikes me as odd that most people would be more comfortable doing a death knock than going into a local pizza parlour and asking for a 10 quid ad. Why? That seems odd to me. I know what I’d rather do.

Waghorn’s said his own ad platform, Addiply, could help publishers reach out to their communities to make ad sales.

It’s a bottom-up ad solution that, in our tiny, tiny way goes into battle with the adsenses and all the big betworks.

And bottom up solutions are what works, he said, “the world is turning upside down”. Citing Howard Owens again, Waghorn claimed that the door-to-door salesman is the missing link for hyperlocal ad sales. He contrased Owens’ approach with that of the big hyperlocal networks like AOL’s Patch.

I’m not Patch, descending down to you from on high, I am the one knocking on your door. Knocking on your door seven or eight times before you give me an ad.

Waghorn’s message? Journalists will knock on doors to ask about deaths, and will knock on doors looking for stories, and if they want to make hyperlocal pay they will have to start thinking about ad sales the same way.

That message was echoed by Will Perrin of Talk About Local, who called the Guardian’s sales approach to advertising on its recently-closed Guardian local sites “very odd”.

If you want to sell ads around local content you have to have a team there on the ground.

Tweets tagged with the #citylocal hashtag can be seen in this Chirpstory.

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Media release: BBC Trust approves greater international focus for Worldwide

April 28th, 2011 | No Comments | Posted by in Broadcasting, Business, Editors' pick

The BBC Trust has approved a new strategy for BBC Worldwide to include a greater focus on international opportunities.

In a release published by the trust today, it confirmed that a new strategy was approved for BBC Worldwide, the commercial arm of the broadcaster, in March.

This follows an 18 month-long review of the BBC’s commercial activities, setting out changes to the future remit of BBC Worldwide.

The BBC Executive’s strategy for BBC Worldwide is now to develop a more integrated and ‘balanced’ internationally-focused portfolio that, within the agreed parameters, balances the need for growth with acceptable levels of risk. BBC Worldwide should also seek to invest in growth businesses which offer new rights monetisation opportunities.

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Ofcom to allow product placement on UK TV

December 20th, 2010 | No Comments | Posted by in Advertising, Broadcasting, Business, Editors' pick

Broadcast industry regulator Ofcom has announced that product placement will be allowed in UK TV programmes from 28 February 2011. The rules for paid-for references on radio broadcasts have also been revised.

Full news release on Ofcom’s website…

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magCulture: What happens when you don’t resubscribe

December 10th, 2010 | No Comments | Posted by in Business, Editors' pick, Newspapers

From magCulture, a bold ploy by a Polish newspaper to prompt its readers to resubscribe.

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jBlog: How Facebook credits could save newspapers

December 7th, 2010 | 1 Comment | Posted by in Business, Editors' pick

Dave Lee offers some interesting ideas on how a virtual gifts or credit model implemented via Facebook could help newspaper publishers rethink their revenue models.

Am I telling everyone that newspapers need to start deploying farm-based games across their sites? No, don’t be silly. What I am saying is that people’s desire to have Facebook Credits in order to play online games is, for editors, a gift from the gods. Suddenly, we’ve got millions of people – young people, don’t forget – who have credits. Credits which they didn’t buy to read news but, now they’ve got them won’t give much thought to spending a couple on content.

The newspaper would, on current rates (dictated by Facebook), take 70 per cent of each credit’s monetary value.

I believe, ladies and gents, that’s what we call a business model.

Full post on Dave Lee’s blog at this link…

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Press+ paid content system targets US college media

December 3rd, 2010 | No Comments | Posted by in Business, Editors' pick

Press+, the paywall and micropayment system launched by US venture Journalism Online, has added new features to its technology aimed at signing up student media partners in the US and attracting payments from off-campus users, such as parents and alumni.

In 2011 the Daily O’Collegian at Oklahoma State University will launch the system on its website, ocolly.com, a release states.

The paper will collect a small fee from online readers who are outside the school’s immediate geographic area and who do not use an email address with an .edu affiliation and who read the paper online more than three times a month. This is achieved by deploying two aspects of the Press+ platform in tandem: the “meter” technology combined with “geo-targeting” technology.

Full release via Smudged Newsprint at this link…

Journalism Online was launched in April 2009, and won investment from News Corp in June 2010. Its first client was LancasterOnline.com, which began using the Press+ system in July to charge for its access to its obituary pages. Last month non-profit investigative journalism organisation ProPublica signed up to the system.

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Guardian: Trinity Mirror and DMGT mulled merger of regional media

December 3rd, 2010 | No Comments | Posted by in Business, Editors' pick, Newspapers

Trinity Mirror had “contemplated” selling some of its shares to the Daily Mail and General Trust earlier this year in return for DMGT’s regional newspaper group Northcliffe Media coming under its control, according to a report from the Guardian.

This would reportedly have been part of a merger which was allegedly being considered by the newspaper owners.

The basis of the deal was a scheme to bring together the two companies’ regional newspaper groups under the control of Trinity Mirror. In return Trinity would have offered a mixture of cash and shares to DMGT, giving it a strategic shareholder for the first time since the days of Robert Maxwell.

Negotiations between the two sides came to a halt, although Daily Mail executives have told their counterparts at Trinity that negotiations could resume in future.

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virtualeconomics: Why a Telegraph paywall might just work

December 1st, 2010 | No Comments | Posted by in Business, Editors' pick

News from the Financial Times yesterday that Telegraph.co.uk could start charging for content prompts this post from Seamus McCauley on why a Telegraph paywall might just work at this time:

The paywall strategy makes sense for the Telegraph if its management believes two things.

First, that the online news landscape is changing so that professional news – especially, perhaps, professional conservative newspaper journalism – becomes markedly scarcer online … Second, that the Telegraph’s current monetisation strategy – which is to attract a mass audience and show them display and search ads – is coming to an end.

There’s much more detail behind this arguments, so its worth reading the full post on virtualeconomics at this link…

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