It isn’t easy for newspaper companies to learn and implement new revenue models. This may, in fact, be the most challenging piece of the Newspaper Next Game Plan – N2’s strategic roadmap for newspaper companies.

(The subject of new revenue/business models is covered in Section III, Area 3, of the N2 Report. You can download a free copy of the report here).

The N2 Report urges newspaper companies to adopt several online revenue models. These aren’t new, but most newspaper companies have been slow on the uptake.

Why? Two main reasons: They involve technologies we don’t know, and they are tough to sell through our existing sales channels.

Now, however, for one of the more promising revenue models recommended in the N2 Report, there's a new solution that appears to shatter these barriers.

The revenue model is self-serve advertising. That is, providing a way for businesses to create and place their own online ads, simply and cheaply. The textbook example of self-serve advertising is Google’s AdSense, which allows even very small businesses to create simple online text ads, limit their spending to what they can afford, and pay for them with a credit card.

The N2 project team saw self-serve advertising as a true disruptive opportunity – a way for newspaper companies to serve online a whole new tier of businesses too small to advertise in any but the smallest (i.e., least expensive) print newspapers.

In most newspaper markets, countless businesses consider themselves too small or too narrowly focused to use newspaper advertising – for example, dry cleaners, small restaurants, small one- or two-person service businesses, and so on. And these businesses aren’t attractive for our traditional sales models, because their budgets – even if they could be persuaded to advertise in the newspaper – would be too small to justify the cost of serving them with a professional ad rep.

If there were a way to unlock this large, unserved market with a low-cost, automated solution, the payoff could be sizable – not many dollars per advertiser, but a huge potential number of new advertisers, and therefore possibly a significant new revenue stream.

In the N2 Report, we advised newspapers to create self-serve solutions for small advertisers. At that time, we didn’t know of any off-the-shelf solution they could use to accomplish this.

Now it appears there is one: Adify. It was just announced at the recent AdTech show in New York. The solution is thoroughly described on their Web site, www.adify.com.

Recommending specific vendors is outside the scope of Newspaper Next, and I haven’t attempted to use the Adify solution myself, so I have no hands-on experience with it.

But based on a couple of interviews with Adify and an online demo of the tools, I can say that the Adify setup offers a very smart combination of the features most newspaper companies would want in a self-serve solution:

• You can customize their generic “storefront” with your branding and offer it as the self-serve ad shop within your newspaper’s website.
• You determine the ad locations and sizes available on your site and set your own rates and sales models (fixed rates or auction or both). You can review the ads prior to placement on the site, if you wish.
• Customers can see the available ad locations, create their own ads using the Adify tools, and place bids or buy with a credit card.
• Adify’s back end serves the ads, bills the customers, processes their payments and provides reports to the publisher and the advertiser.
• There are no up-front costs. Adify’s standard cut is 20 percent of the revenue from your sales, although rates may be negotiable for deployments on multiple Web sites.

This looks like a great way for newspapers – small, intermediate or large – to get their websites into the self-serve advertising business. With the right supporting promotion and marketing to make small businesses aware of this opportunity, it could open new frontiers among unserved small-dollar advertisers – at minimum risk and cost to the newspaper company.

The Adify Web site is set up to provide everything an online publisher needs to get started without human contact. However, Adify’s Jordan Shultz would welcome a conversation with any interested newspaper. He can be reached at (650) 392-6248 or by email here.

Besides the self-serve ad business, there’s another aspect of Adify’s activity that may be interesting to newspapers. Adify can provide the back end for newspaper companies that want to create local, regional or other online ad networks. In fact, the Washington Post is using Adify solutions to power ad sales across its blogroll.

This really got me thinking. Would a newspaper company be smart to take the lead in setting up a local Internet ad network, enabling local, regional or national advertisers to make buys across a number of the highest-traffic local Web sites?

To the traditional newspaper mindset, of course, the idea of helping competitors by selling ads into their sites would be horrifying. But if you have the most-trafficked local site, you may have the clout to create a network that enables you to sell a bigger buy to your advertisers – and get a nice share of the revenue from all the ads you sell into competitors’ sites. And, at the same time, to get revenue from sales the competitors make into your site through the network.

That might not be a bad idea at all, and some newspapers are exploring it already for their markets. Definitely something to consider.

In the meantime, though, newspapers sites that don’t already offer self-serve advertising – and that’s most of them – would be wise to take a close look at the Adify solution.