Deal of the Day

Newspapers and city magazines ought to be kicking themselves (yet again). Several start-ups have emerged in the last 12 months rolling out dazzling deals of the day for savvy bargainistas. GroupOn and LivingSocial have been the front runners, with TownHog nipping at their heals. All three are out canvassing merchants around various cities for compelling wares and services to dangle before audiences looking for "such a deal!"

I first bumped into GroupOn several months ago when searching for play tickets in Toronto. LivingSocial I read via HuffingtonPost -- and while researching this article I tripped over TownHog. All three have a similar model that advertisers love: pay nothing upfront to have someone else market your product. There is only a charge to the advertiser if the product sells. And what could be a better deal for retailers trying to drum up business than a risk-free promotion! Further, for a deal to go through, a certain threshold of takers needs to be met, if not, there is no deal. This incents consumers to virally promote the deal among their network.

Of course there are drawbacks: Retailers need to know that they can handle the demand if the deal is truly a great one. (I had a meeting with one national brand -- whose IT department found out that the company would be offering 50% off from Web site sales -- just 7 days before the offer went live. They were terrified that the servers would crash. They didn't.)

And, I have heard rumblings that some of the deal-meisters pay retailers at a slightly slower rate than others (can't confirm that). My brother-in-law has been trying to get a GroupOn rep to call him for a few months -- so perhaps there are some growing pains.

There are some newspapers like Media General & McClatchey that are catching the tiger by the tail and partnering and sharing revenue with these daily dealers. In Media General's case, Groupon is selling and developing the clever creative for offers -- while Media General markets the offering. (In some cases this creative is the ONLY web presence the retailer may have.) No word on the revenue split.

Here's the deal though: Media General like all newspapers OWNED the local market when it came to sales and fulfilling creative in print. How in the world could they let some outside organization get close to their customers -- and offer the marketing platform?? At least be the sales arm for the venture! It certainly seems that this is short-sighted at best -- and yet another lost opportunity for local news organizations to find a model that makes them relevant and solidify their reason for being.

PayPal for a Free & Open Media

The future of newspapers -- is not really something I lose sleep over. The better concern should be: The future of a free and open media. The media that is supposed to be the checks and balances to the government (instead of shills). With media jettisoning news creators -- read that: bonafide journalists, the question is: who will do the work? Better still: who will pay them to do the work?

The New York Times had a front cover story of a Pennsylvania VA Hospital that didn't have safeguards in place so that a rogue doctor was able to botch about 90 routine prostate procedures -- errantly putting radioactive seeds in bladders and rectums to consign his patients to a life of misery. The article ran easily 5000 words -- and probably took hundreds of hours to pull together. That's one mere example of good reporting -- and doesn't take into account the hundreds of thousands put in by good journalists all over the country safeguarding our democracy. Who will pay for this? Syndicated columnis Aaron Harber presents some very timely and well-thought out suggestions on the future of news gathering.

Let's face it, the commercialization of the media has not been a panacea. Not much is open nor free when media owners squash or skew stories because it may offend an advertiser. (You are naive if you think this doesn't happen.) Still, most of think of news coverage as a de facto right -- and expect to have people committing hours of their life tracking down the truth for us. But are we willing to pay for high quality reporting?

What is the value in the news gathering efforts -- listening for leads, reaching out to victims, researching backgrounds, interviewing countless sources -- many of whom can't keep facts straight, delving into databases -- to then sit down and right a 5000-word piece? (And that is 5000 words that follow rules of grammar -- no smilies and no abbrev.) How do we subsidize what might have been months of work for our behalf?

In watching this Iranians struggle to find the truth we can see first hand the value of news. But of course there is an intense distrust of our own media -- which may have been made worse by Vanity Fair's Matt Pressman's navel-gazing attempt to get at the "truth." The deal is there is a very good chance that our gravy train will end; that there might cease to be major corporations willing to pay staffs of people on average upwards of $50,000 a year to report on abuses and scandals. And when that happens, we may find ourselves helping to support passionate activists like Kelly Golnoush Niknejad, an Iranian emigree, who is fully dedicated to getting out news about her native country -- and who lives on the PayPal donations of others -- in the home of her parents.

Schmidt's Advice to Publishers

I was stuck at home with the flu so couldn't get out to the Newspaper Association of America's conference in San Diego. Bad one to miss. Most of recent years' events would have tested an insomniac's affliction, but this year, Eric Schmidt was brought in as a headliner to kick some -- er, motivate publishers to seek new ways to reach out to readers and focus on, wait for it, advertising.

Now, really, that is priceless: The 10-year old Internet prodigy telling the century old media scions a thing or two about audience development and making money from eyeballs. According to my friend and Nstein colleague, Christopher Hill, who bore witness to Schmidt's carefully chosen words in his closing keynote, Schmidt attempted to move the dial from foe to friend, appealing to publishers' egos by calling papers trustworthy and curators of the public record. He almost sycophantically exalted the printed form versus the web presentation. Simultaneously he wove in bits on cloud computing, networking and data mining. All of these strings were tied up with the meme of innovation. With these technological tools and newspapers' strengths for story-telling, he gave advice on how newspapers be more relevant -- and make money. But the fun began when the Q&A started. Someone asked Schmidt to speak frankly about what newspapers have done right -- and what would he do if his 'fantasy' came true and he woke up to find himself a publisher! He praised them for getting onto the web back in the 90s. Then he took a circuitous path to a direct hit: "What have you done for a second act?"

He said that first and foremost he would try and figure out what his reader wanted. Ha!! Those words transported me back to 1995 -- when we were launching two new "ezines" for IN Jersey's portal: The Surf Report and Neo. The duo were unapologetic in its embrace of Gen Xers who shunned pro-sport coverage (a staple of newspapers) in favor of X-treme action like surfing and (snow & skate) boarding. Our coverage was superb (yes we used real writers) and our national and even international following for both were robust and enthusiastic. At the time we asked our sister dailies if they wanted to repurpose our efforts in print. I might have just as well asked them if they would like to pepper their food with cockroach feces.

Newspapers thought they could shovel their product from their editorial systems to their web content management systems, and all would be right with the world. Any attempt to create content outside the bastion of the newsroom was met with contempt. There was no room for innovation for a newsroom back then. Neither in how they presented the news online - nor in their understanding of what was news.

While everyone blames the Internet for eroding print sales, could it be that the real problem was that newspapers didn't adopt coverage to their changing audiences? As if playing hot potato with NFL and MBA coverage "no, really, you take it" the major tv networks realized they just couldn't get the fan following particularly in the 18-35 audience -- and cut back accordingly. And that was a decade ago. And yet, papers devote proportionally massive real estate and man-power to covering pro sports, yet are derisive when they cover surfers who "flaunt the laws, and surf during rough weather." Just whom are they appealing to?

Last month at NAA's MediaExchange, Chris Dorsey, Digital Media Sales Director for Forum Communications paper in Fargo, ND was on a panel on contextual advertising. Dorsey was explaining how contextually speaking, Fargo is a cold place, and what is of interest to his constituents is what to do when it is cold -- or when the river rises. Beer blasts and drying up wet basements. So Dorsey created a home-page product called "Marketplace Offers." For $149 a month, businesses can advertise Ladies' Nite Specials or offers to remove mold. Every listing has a print or mobile response -- all facilitated by the paper -- a vendor doesn't need to have an IT staff at the ready to do this. Readers can subscribe for daily emails of specials. This morning's count: 125 business offers, or nearly $20,000 in monthly revenue for something with that should be exceedingly high margin (self-serve sales origination page).

This is what Schmidt was talking about. Know your audience and create a service that reaches it. Don't try and lock your content behind a paywall -- unless you cover a niche market and have created value for that information. What information do people find valuable? Is it alerts to buy a new car or to be notified of job opportunities?

The lesson is not just for newspapers, but magazines, bloggers, ecommerce folks, anyone. People pay for that which they perceive to be valuable – whether it is a lead, a job tip, where the ladies' night specials are -- or how to dry a wet cellar.

Rocky Mountain Low

The decision by the E.W. Scripps company to close the Rocky Mountain News on February 26 -- a month shy of its 150th birthday was more evidence of a vastly troubled industry. The mourning in Denver for the favorite voices that were silenced, was the exact way I felt in 1982 when Cowles Media stopped the presses on the Buffalo Courier-Express. (That paper resulted from the union of the Buffalo Courier and Buffalo Express, whose vast archives extended back to 1828, and whose ownership included a guy by the name of Samuel Clemons, aka Mark Twain.)

1982, you might recall, is the year that economists harken back to, usually in the context of "the worst economy since 1982." Some numbers:

• Median houses: $83,000
  
• a gallon of milk: $2.24
• a gallon of gas: $1.30

Whether 2009 will win the dubious distinction of surpassing 1982 as worst year, there is no doubt that the perfect storm of a bad economy and changing technologies kills businesses and hastens transformations. What changing technology impacted newspapers in 1982? Hot metal typesetting (truly the very first movable type!) to phototypesetting -- also known as "hot-type" versus "cold-type." The cold type process eliminated the need for a skilled set of laborers who deftly created lines of copy for press. Adapting to the technology required negotiating with unions, investing in technology and dealing with the criticisms that phototype was a generation less than hot-type. (There would often be a blurriness that drove readers nuts.)

The other technological change that impacted the C-E was, believe it or not, television. The evening news on TV had seriously eroded evening newspapers, causing many of them to move into the morning slot -- such as the C-E's competitor, the Berkshire Hathaway-owned Buffalo (Evening) News. A decade of plant closings and subsequent exodus from the Buffalo area saw the population plummet and advertising shrink. Sound familiar to today's woes? The C-E had actually invested in cold-type but hadn't been able to implement it because of union constraints. And suddenly the voices of syndicated Chicago columnist Mike Royko and New Jersey's Jim Bishop were eliminated from the Buffalo news diet. Over the next decade many two newspaper towns shrank to one. Denver dodged that bullet for yet another decade before succumbing last month.

This traipse down memory lane is not to belittle the sorrows of newspapers today. Rather it is to show natural evolutions that occur following every technical advancement. Savvy papers moved from evening editions to morning, and savvier ones realized that they could use those presses they reserved for news to print commercially for others. Still the savviest will be those who follow the upgrade path available to them, and while it won't be easy, it is still a more graceful morph than, say, the horse and buggy to a car.

Yes, the models have to change, and yes the infrastructures have to change, and yes union contracts will have to be rewritten. But there is an upgrade path. The Seattle Post-Intelligencer, all but out of the pulp business, is seriously talking about going all digital. It wouldn't surprise me if Hearst migrates its San Francisco Chronicle into web only as well. ImpreMedia's Hoy New York went all digital in January. The Detroit papers are both ceasing home delivery save for Thursdays, Fridays and Sundays. They are evolving: losing their tales that are heavy to transport.

The next step is modifiying the notion of church and state. Notice I didn't suggest eliminating church and state, but modifying it. There is room for a little integration, a little cooperation. And how about democratizing news -- so that not just reporters determine what is news worthy. Perhaps the model will be to open up the gates for users to assist as field researchers, while a writer/editor follows up and fact checks. We all trust readers during catastrophes -- why not create a process for readers to assist in the newsgathering process? HuffingtonPost is popular for its voices -- and the voices it aggregates.

The Rocky Mountain low being felt right now will not be just an isolated event in the news industry. And we will look back at this time as a transformative one, as going all digital will not be a last-ditch gasp at life -- but a viable alternative. The voices that ceased in the '80s when the presses were stopped, were not silenced with the shuttering of the RMN, but have morphed into Inside the Rockies and I Want My Rocky, two new sites by former writers. No doubt the ownership and business model may change. So while yes, in 2009, just like in 1982, some organizations will be hastened to die, some will hang on, others will adapt -- and some pure-plays will be borne. "Without failure, the culture of risk fades. Without risk, creativity withers," says NYT Columnist Roger Cohen who points out that churn is the American way.

Or to paraphrase Mark Twain, the rumors of the death of newspapers is greatly exaggerated.