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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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Johnston Press’ ad revenues feel effects of recession

August 28th, 2009 | 1 Comment | Posted by in Newspapers

Johnston Press has today reported half-year revenues of £218.6 million – down 25.4 per cent year-on-year.

Print advertising revenue fell by 33.5 per cent; while digital advertising revenues also declined – by 18.8 per cent.

The publisher’s revenue from employment advertising was down by 53.8 per cent, property ads by 54.2 per cent, motors by 29.3 per cent and from other classifieds by 11.5 per cent.

The company’s interim report said ad revenues were down 32.7 per cent in the first six months of 2009 compared with the same period in 2008.

In an attempt to improve their digital recruitment sites and therefore their appeal to recruitment advertisers, Johnston Press has entered into a joint venture with Daily Mail & General Trust, giving them access to the latter’s Jobsite software.

The report also expresses the group’s struggle ‘to compete with the regional activities of the publicly funded BBC digital presence’, claiming that it ‘distorts the markets within which they operate through making the charging for news content extremely difficult’.

“The timing of the economic upturn remains uncertain but advertising revenues are demonstrating greater stability
and we expect the cyclical improvement when it comes to more than compensate any structural change. We will
maintain our focus on costs and look to secure operating efficiencies during the second half of the year,” said CEO John Fry in the report.

Yesterday the publisher celebrated success after it was announced that it had attracted the most unique users, to its network of regional newspaper websites, in the first six months of 2009.

The publisher, which is responsible for more than 323 websites, recorded 6,864,820 monthly unique users on average over the period, according to the Audit Bureau of Circulations Electronic’s six-monthly report for regional newspaper groups.

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WAN Amsterdam: Digital will account for 43 per cent of newspaper advertising growth by 2012 according to PricewaterhouseCoopers

October 20th, 2008 | 4 Comments | Posted by in Advertising, Events, Online Journalism

The global leader for the entertainment and media practice, at PricewaterhouseCoopers LLP in Hong Kong, Marcel Fenez, argued that ‘traditional media isn’t dead’ on the last day of the WAN/World Editors Forum 11th Readership Conference (information courtesy of WAN conference updates).

The latest media and entertainment industry forecast from PricewaterhouseCoopers predicts that global newspaper advertising will grow 2.9 per cent to 136.8 billion dollars in 2012, with digital advertising accounting for 43 per cent of the growth.

  • Print advertising will grow 1.8 per cent to 123.3 billion dollars worldwide in 2012
  • Digital advertising will grow 19.3 per cent to 13.4 billion dollars:
  • While the growth rate for digital advertising will continue its impressive rise over the next five years, the total in 2012 will represent only 10 per cent of total print and digital newspaper advertising.

“Some people say that traditional media is dead. Well, it isn’t. For the next five years, it ain’t gonna be,” he said. “The death of traditional media is exaggerated, at least in a 5-year context.”

Fenez said the forecasts, based on consumer and industry sources, does not take into account the recent economic meltdown, which could have a negative impact on the figures.

Fenez reported:

  • The generation that comes of age in 2012 will be the first that doesn’t know the pre-internet world. “We hear a lot about user generated content from the ‘net generation’. It’s very, very, very important. But premium content is still really valuable. Even the net generation values premium content. They’re tired of watching videos of a dog running up a tree.”
  • Advertisers will take a ‘wait and see’ attitude and be cautious about spending in the first half of 2009. “They won’t do anything until mid-year. If they have the revenue, they’ll release their budgets.”
  • Video games advertising is set to grow 17 per cent to 2012, though the revenue is still negligible. Most of the money being spent on game advertising is coming from television.
  • “We’re on a journey of transition from traditional to digital: the first to probably go totally digital is the music industry. In 2011, the majority of revenues will be digital.”
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Future websites attracting over 11m unique users per month

May 23rd, 2008 | No Comments | Posted by in Journalism

Future publishing’s portfolio of websites, which includes TechRadar.com and GamesRadar.com, are attracting over 11 million unique users per month, figures released today suggest.

GamesRadar alone attracts three million page views a day, according to the publisher’s financial report for the six months to March 31.

The report also stated that revenue from digital advertising now accounts for 19 per cent of the group’s total advertising revenue – an increase from 15 per cent last year.

“Our digital strategy, which attracts the lion’s share of our investment in new product development, is at a very exciting stage. With the launch of MusicRadar and TechRadar networks earlier this year, we now have pillar online properties in each of our specialist sectors,” Stevie Smith, chief executive of Future, said in the release.

However, operating profit for the publisher fell from £7.7 million over the same period in 2007 to £5.2 million.

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