Journalist’s New Clothes: Dress Yourself Up Like a Paradigm Shift

It's a sensible practice to look at the news products that people already pay directly for and then determine why they do it.

Investment newsletters and other specialty publications still enjoy high levels of profitability. The information is timely, relevant, and solicited. Any product placements (usually stocks) are things that the readership already wants to buy.

Contrast that with the New York Times. The ads are often irrelevant to the reader. When I opened up the international section today, the second page was cluttered with ads for Tiffany jewelery, Coach bags, and an enticing Macy's promotion for varieties of lipstick.

Already, they lost me. I just looked over several hundred thousand dollars worth of ad spending, and all it did was degrade my experience of reading the paper.

I had an excellent e-mail conversation with Cody Brown on this subject, and I'll expound on it in a long blog post in the next couple days.

In short, the answer is that the old media model is too inefficient to be rescued. Some magazines might be able to pull together, but even then, I'm not so certain about it. When newspapers, magazines, and television were the only means of mass-communication – and the channels were limited – advertising was quite valuable. Now, when I want something, I can just search for it. My social graph will inform me of new products and services that I might be interested in.

You might want to check out Seth Godin's “Permission Marketing” for more about the issues plaguing advertising.

The journalism has to be relevant and valuable enough to a specific audience or it can just act as an advertisement for some other service. For example, the blog posts on TechCrunch are basically marketing copy to get people interested in the conferences, which are quite profitable.

I do agree that the old-journalism business is irretrievably out-of-date and inefficient. Looking back, I wonder how we all had the patience to look at so many ads and articles that did not actually target our interests! It was nice to browse and discover surprises; but my goodness there was a lot of noise in that signal.

I think you make a good point about those specialty publications being timely, relevant, and solicited. The problem is, of course, that specialty publications are, well, special: by definition, their audience is small.

So the current winning strategies seem to be either creating a long-tail specialty publication that speaks efficiently to a small group of people; or a bigger and somewhat-wider-appeal publication (like TechCrunch) that can use its content to sell something.

Old-journalism is certainly aghast as selling anything other than subscriptions, but with so few consumers willing to pay, it doesn't seem like there's any other alternative. (That's why I'm planning to turn this blog into a book once its profile is high enough. Shh! Don't tell anyone my secret strategy.

Yes, the specialty publications are small, but the audiences sometimes have a lot of money. I go to a book club with a reporter at a newspaper for bond analysts and traders. You don't need many subscribers when they all pay thousands a year.

Naturally, not everyone can write for lucrative markets like that. But it can still be applied elsewhere.

Gothamist, for example, sends out a newsletter called GothamList. At the top, there's a promotion for some local eatery or event, usually a Groupon-style discount.

I'm unsure of how much of their newsletter consists of paid advertisements, but it's an example of how to use permission marketing.

Old-journalism is “aghast” at changing their model because they still earn millions in revenue on a daily basis. Competitors are chipping away at their market share constantly, but that doesn't mean that everyone working there can't just ride it as long as possible until it collapses.

Like, the solution for Myspace is to have everyone quit right now, shut down the servers, and figure out something better to do. But by pretending that everything is reasonably OK, they can still draw paychecks for a while longer. Pretty good work if you can get it.

Does that make sense? The solution is “shrink radically and re-think the business.” Most of these companies are heavily unionized. They can't fire people without buying out contracts or risking expensive legal disputes.

Another magazine that seems to be healthy is Consumer Reports. They earn money from subscriptions alone. Again, it's targeted, relevant to the audience, solicited, and trusted.

The iPad might be beneficial if only because it allows these publications to finally have a unified design between print and the web. They'll be able to port their print business to the new hardware. Possibly, they'll be able to target advertisements better. For example, the NY Times on the iPad will know that I'm a 23-year-old male, they might be able to know some of my purchasing and search habits, and may be able to alter advertising to target me more efficiently.

That doesn't solve the broader problems with conventional advertising, but it's certainly a start.

Your post about movie critics is particularly insightful in terms of the kind of thinking that needs happen. It's not just the advertising side that's breaking down. The editorial mission needs to shift to support the business.

Definitely, radical shrinking and re-thinking needs to happen. And I can say that it definitely is, since so many of my journalist friends are either out of work or experimenting or both. Can anyone predict which experiments will work? I sure can't. I mean I have some theories but I'm no Amazing Kreskin.

Those examples of things that are working — GothamList, Consumer Reports — all seem to have found a way to do something that newspapers used to be able to: give users something they want that they can't get somewhere else. For a newspaper, that definitely requires a shift of editorial mission, since users are suddenly a lot pickier about which news they want, and can find most of what they want for free from non-professionals.

Can journalism — that is, stories about what is happening in the world — provide something that is both awesome enough that people want it and difficult enough to create that amateurs can't undercut the market by making it for free? I think it's possible. BUT HARD.

Briefly before I get some sleep –

Yes, I have some theories as to how it can. If you're going to do war reporting just by regurgitating Pentagon press releases, then you might as well allow the Pentagon to take over that propaganda function on its own.

If you're going to write the next Dispatches, perhaps you can raise money for the project on Kickstarter (or a similar service, like ProPublica) and get it done that way.

You can continue with the advertising model, like Business Insider. Your stories about the Hot Daughters of Hedge Funders can generate the pageviews that will subsidize an investigative report on the founding of Facebook.

I believe the amateur advantage is over-stated. There's nothing that Gawker does (well, now that John Cook is working there, it's slightly different) that other people can't do. But no one beats Gawker, despite challengers in the same space. Probably because copycatting is a foolish business model.

Focused writing talent is rare. An editorial mission is challenging to maintain. It's tough for amateurs to coordinate the editorial, business, design, and writing parts of a publication. Which is why it doesn't happen.

There's also the issue of neutrality that comes up. Readers mistrust PR. For whatever reason, when a press release goes through the press-machine, it magically becomes more trustworthy for the common reader – even if there's nothing substantive added to the article.

Editorial and advertising have to come closer together. The content should be relevant to the advertising and vice versa.

The Wal-Mart model of media has been decaying for a long time now, starting with the growth of cable television, and the increasing fragmentation of markets. Why would I want to read the NY Times Auto section when I can read a specialized car blog?

As an aside, the blogs run by the NYT are probably the best thing that they've done lately. Unfortunately, their business development hasn't kept up with that editorial innovation.

It's a sensible practice to look at the news products that people already pay directly for and then determine why they do it. Sensible indeed.

Certain people pay quite a bit for Foreign Affairs and The Economist, both of which are relatively low on ads (FA much more so than E, and correspondingly more expensive). This is knowledge the readers feel they need and can–will!—act on. Certain hobby magazines get a similarly high density of loyal subscribers. I would argue that a small part of the success of the blogosphere is due its more partisan bent; bloggers were able to link to political campaigns and charitable donations in a way that traditional news sites were loathe to do; the “read, think, do,” process was all encapsulated on one page, earning individual writers both loyal followings and surprisingly robust tip jars.

Personally I think the interactivity conversation is getting stalled out on regossiping & social media as the interaction; commenting, sharing and retweeting all feeling like real “doing” reaction after a while.

I think rather than there being a “amateur advantage,” there's a “professional disadvantage” — that is, the folks used to getting paid are being undercut by kids who just give it away.

The solution would seem to be offering reporting that's so great and so scarce that nobody can duplicate it. But do enough consumers really want quality reporting to justify that, or are too many people satisfied enough with ONTD and Daily Beast?

Or, barring great reporting, maybe the solution is better advertising. I know a lot of journalists who really believe in The Purity Of Journalism and will cry if that turns out to be the case. I may be one of them.

In truth, a balance of the two — great reporting mixed with sticky advertising — is what's required. Finding that balance is the challenge.

Yes, those finely-targeted publications seem to have a lot of strength. Do you think that's a model that can be replicated out of a few very successful niches? Or will we reach a maximum-capacity of long-tail publications?

And what more is required of interactivity than regossiping & social media? What are the opportunities being missed out on?

(PS: Are you going to Hacks and Hackers at Google tomorrow? Maybe we will bump into each other there!)

My completely uneducated hunch is that it can be replicated, and in fact is being replicated–TPM Media comes to mind–in those markets that most readily see themselves in this light. At some level it's the same story with GigaOm & TechCrunch—they are successful because they have a niche audience that sees itself as making real use of the information and analysis they consume. But there's a certain kind of cooperativity between the publication and the community/market that has to be exploited for this tail to have enough room for a decent number and variety of paid writers. My hypothesis is that extending the interactivity in ways that suit the niche community at hand will both build the community up and build up its loyalty to and desire to pay for the media serving it.

Interactivity? Well, that's an umbrella term that actually covers a lot of conceptually different reader-publication relationships, but I'll stick to the theme at hand: empowering civic action. There can even be somewhat impartial or detached or cool-headed calls for action, they don't have to all be donate-here buttons. But stories about school district controversies can have iCal feeds of school board meetings you can drop into your calendar; government officials' names could always be linked to their office contact information (the mobile versions can be loaded with phone numbers); stories about razor thin votes in the state legislature cane a place where you can “ask” the story how your rep voted; stories about city plans being up for public comment could be able to launch copy of the of plan that's been ported into a PDF form that you can fill out with your comments. Make sense?

Yes, I'll be at Google tomorrow. ..DM me or something.

I think you may be right! I just Googled the most niche-y blog I could think of — “cheese blog” — and the top hit is Curd Nerds, a blog that's monetizing its reputation with Amazon affiliate links. Enough to pay the bills? Maaaaaaybe. But if they set up a store or even just sold their own book I bet they'd do okay. Their traffic's pretty good and I would expect their readership to be pretty engaged.

I want to believe that interactivity like you describe is something that people want. I have a hunch that only the thinnest of nerdy tails would actually care about attending government meetings. But if it was a calendar of upcoming celebrity appearances at the local mall, maybe that would get some traffic. Bleh, I don't mean to sound so cynical about consumers, but as someone once said, “the heart wants what the heart wants.”

That's a cool find.

Here's what I'd do if I were cheese-man.

1. Eliminate the Google ads. Cruft!
2. Get rid of the affiliate links. Also cruft.
3. Redesign the blog to be less vanilla. Not my area of expertise – all I know is that it's too standard-looking.
4. Start exploring ebook or book-selling options.

He's already advertising events. You can charge for those. Note that he mentions a $30/year cheese newsletter that someone else runs. When you think about it, cheese is actually a huge niche internationally. The US is kind of dull in terms of cheese, but it's a major food category on the continent.

As for affiliate deals, Amazon just offers terrible rates. Maybe he could offer an affiliate deal for a cheese of the month club or something similar.

It's a good example of something that's too small to support through most forms of advertising alone, but actually has significant potential for revenue if structured properly.

There's a lot more to advertising than just the CPM, but for some reason, old-school types have trouble getting past it.

The cheese blog is a solid platform because the readers demonstrate intent to consume cheese. And people also like to drink wine with cheese, so you might also be able to get away with promoting that to them as well (wine has a much higher profit margin than for most cheeses). Unlike most other foods, cheese is also relatively non-perishable, making it a fairly good fit for online sales.

What does cruft mean?! I've never seen that before!

It definitely needs a redesign. It almost looks like a spam blog. Spam & cheese? There's no about, no byline, no personality or voice. But it also looks very functional and optimized for group use, so maybe it's not trying to be pro, and the ads are to pay for the hosting. This magazine, Culture, about cheese is trying to be pro. Most of their content is behind a subscriber's paywall, which might be smart actually be smart.[1] I see this magazine for sale at Berkeley Bowl, which of course is its ideal selling place. Other monetary schemes: they have events, contests, and a 'center fold club,” (!) (you get the cheese of the month). And of course, for certain advertisers, they're an extra special market. Theyr'e barely a year old, so who knows how they're doing, but I don't think there's any innate reason they should fail.

I'm curious why you want to get rid of the affiliate status? That apparently works quite well for some people?

Here, btw, is a personable blog that's amateur in the writing dimension but possibly professionaly motivated; I can't tell if she's a pro cook or not.

[1](The paywall debate is most applicable to daily newspapers, imho.)

Cruft is a slang term for extraneous, ugly material.

I suppose it's a matter of personal taste – I found his blog charming. He also writes columns about cheese for Serious Eats, and some of the guy's older posts are more in-depth.

I like the design of the blog you linked to much better. It's still not set up as a sales platform, though.

Amazon affiliate links, like Google ads, rarely pay out significant amounts of money. To me, a Google ad block on a blog signifies either senseless greed or laziness. Greed for a low-traffic site, as it will likely return a few dollars a month at most. Laziness for a high-traffic site which should be negotiating for more targeted advertisements at a higher rate that gels better with the overall design.

“Paying for hosting” might be a valid design argument for young children without jobs, but anyone else can pay for hosting trivially. Even if they're a dirt farmer or something.

The attention of your reader is limited on a web page. If you clutter it up with affiliate options and advertisements that distract the reader, you're less likely to make a sale.

For example, you can make something like .50 per thousand page views (CPM) with a block of text ads, or you could sell some product for $150 (like a cheese-of-the-month subscription or something). If 1000 people view that sales page and 4% convert to sales, you just earned $6,000 in revenue with the same amount of traffic.

Does it make a bit more sense now as to why pageview-based advertising is such an ugly business model relative to the alternative? I'll take that $6,000 over the 0.50.

On the other hand, ads on the Gawker network earn about $12 CPM.

I'm a fan of paywalls for certain classes of products. Investment newsletters work well with paywalls because the information becomes less valuable the more it gets spread around. If the information in the publication confers some kind of competitive advantage, then it deserves a paywall.

Most daily newspapers just contain way too much information for a person to consume in a single day. It's like buying a 10 foot long sub sandwich, taking three bites, and throwing the rest out. Not that many are likely to be willing to do that.

I have a hunch that only the thinnest of nerdy tails would actually care about attending government meetings.

Oh, absolutely. But right now even that thinnest of nerd tails isn't being targeted.. Serious local journalism is still topically broad, not engagingly deep.

I had a longer comment but it turned into thoughts I need to chew on some more.

[...] TechCrunch is highly targeted and mostly-free, but makes money off of ads and, JC, points out, conferences. GothamList is highly targeted and, like TechCrunch, makes money off of its [...]