A great process for discovering new revenue opportunities
The biggest challenge facing virtually all newspaper companies right now is creating new revenue. Even among the most innovative companies -- those that are quickly diversifying their offerings and creating innovative new products and services for consumers -- the revenue performance often isn't as good as they hope.
That's why the Newspaper Next 2.0 report urges newspaper companies to redouble their focus on non-consumption among businesses, not just consumers. The revenue opportunities are huge, especially in two categories: small and medium enterprises that rarely advertise in newspapers, and larger businesses that have advertising objectives a newspaper can't meet very well. There's a lot of money in those two zones for newspaper companies that figure out how to meet these needs.
A new case study from NAA provides a great example of how to do it. Here, as so often before, the Bakersfield Californian is leading the way. You can download the excellent NAA report, written by Stacy Lynch.
The case study explains how, over the last few years, the Bakersfield team has developed a data-driven process that enables them to see and pursue the biggest non-consumption opportunities among local businesses. This was an eye-opener for them, and it has changed their approach to product development.
First, they built a comprehensive database of local businesses and estimated the ad spend by each business. Then they created a "New Product Scorecard," designed to make sure their new product ideas will yield not just a sizable consumer audience, but also a sizable number of businesses that can generate a major new revenue stream. The scorecard is downloadable from a link in the case study.
The Bakersfield example provides an excellent tactical approach that's a perfect fit with N2.
Their method is ideal, but it may be more complex than some companies can manage. Still, even a simplified approach -- if it begins with a good inventory of local businesses and an honest assessment of what types and categories of businesses don't advertise with the newspaper -- could enable a company to see opportunities they've missed for years.
So, buy the SIC data for your market, if you can -- it will open your eyes. But if you're at a small newspaper that can't afford to do that, some no-cost options would be to get the list of registered dba's ("doing business as") at the county courthouse, and to spend some serious time analyzing who advertises in the Yellow Pages, looking for the categories of non-consuming businesses that offer the biggest revenue opportunities.
Comments
I think one of the biggest challenges with the newspapers right now is that the newspapers don't think their medium has any true value and therefore for over-correcting and dropping price. I feel that there isn't enough data on the true ROI of advertising in newspapers, particularly for the local business, to make this judgment. It is my recommendation for the newspapers to begin measuring the responses for both their online and offline properties, determine ROI and fix the REAL problems in their model and provide a reasonable pricing structure. The current challenge is the businesses that could benefit from advertising in the newspaper can't afford it, basically because they are small businesses that need to know what they are going to get from their ad spend. Newspapers should take some time to evaluate their own business, determine under-performing categories and products and shore things up with real data, not drastic misconceptions.
Posted by: Rick Rochon | November 22, 2008 11:36 AM
Newspapers should also consider technology to better match content with advertiser offers, and not be content to sell only on a CPM/pageview basis.
Posted by: Steven | November 23, 2008 10:08 PM