Follow the Reader
By Christina P. O’Neill
When the website of weekly Holden newspaper The Landmark went dark early last year – closed for remodeling – readers called the paper’s offices. Without access to the paper’s website, they said, they’d have to subscribe to the print version.
The fact that some readers consider the print version a second choice to online isn’t lost on Publisher Gareth Charter. "We’re getting people renewing their print subscription and bundling the online at the same time," he says (print or online subscribers can get both versions for $1 over the one-mode subscription cost of $33 a year). Advertisers are surcharged for web presence and can opt for the print version only, but only about 10 percent do, Charter says. The Landmark has a weekly circulation of 9,000 that he describes as stable, with a market penetration of 60 percent. "I definitely think the online is contributing to that," he says.The Landmark is just now marking the first full year of its updated, enhanced website, which the paper’s parent company, The Holden Landmark Corp., markets as "an Internet companion" to the paper. Analogous web sites are online for sister publications, The Community Journal (www.thecommunityjournal.com) and the Leominster Champion (www.leominsterchamp.com). Paid online subscribers get full access to the latest editions of three publications a day before the print editions are available. The publications’ electronic archive is searchable by keyword — something print can’t do. It’s a long way from the days when a newspaper’s website was essentially a place-holder with words and images only. Charter says The Holden Landmark Corp. is preparing to launch an entirely new online classified environment in the coming weeks, combining the classifed ad content of all three publications.
Web-based advertising is the fastest-growing and most profitable segment of many print publications’ portfolios. But their challenge — and the bigger the publication, the bigger the challenge — is to turn that 0 to 60 growth into a Mach 2 revenue stream to boost profits for the overall enterprise. Online distribution can reach a thousand readers as cheaply as one, but newsgathering remains expensive.
Reaching the people
So, publications are looking to distribute their news content through as many delivery systems as possible. The Worcester Telegram & Gazette, owned by The New York Times Co., is approaching its 10th anniversary of web presence and now posts virtually all its news content online. Longtime print reporter Jim Bodor, who helped launch the paper’s Business@Noon midday blast e-mail product, became the paper’s Online Editor last year. He characterizes the change as "very different" from print, and notes that it’s a fast-moving environment.
The T&G’s website offers amenities to subscribers such as e-mailing the top stories from all the paper’s zoned editions, as well as world and business headlines, and also offers intraday news,
— often a preview of what will appear in the next day’s print version. Nancy Cahalen, director of marketing and new business development, says the online segment of the T&G is small but fast-growing. "The whole idea is that print or online, you want to reach as many people as possible," she says.
Online services are still packaged as a value-added component to a print buy, says Michael Donovan, principal of marketing and branding consulting firm Metaphor Communications. With decades of experience in the Greater Worcester ad market, he observes that the T&G still relies on its print ad sales force to get the word out about its online services. While he regards the New York Times-owned dailies as doing a good job with their online presence, "The numbers just aren’t there dollarwise [now]. But you’ll find that the numbers in readership are going to grow faster than print in the years to come."
Joint efforts
As local weeklies like The Landmark hit their stride on the Internet by determining what it is they want their websites to do, metropolitan dailies across the country — the T&G and The Boston Globe among them — are watching the Web’s incursions into their display ad and classified ad markets.
Retail print advertising has declined due to consolidations among big retailers. Print classified ad revenues suffer from defections to online advertising, most notably in advertising for jobs, automobiles and real estate.
The nation’s dailies have responded by teaming up with sites such as Monster.com, or they’ve entered joint ventures with other newspapers to create sites of their own, such as the online shopping service About.com, a product of The New York Times Co., which also owns the Telegram and The Boston Globe. Belo Corp., parent company of the Providence Journal Bulletin locally, last year signed an exclusive distribution agreement with online recruiting service Yahoo! HotJobs to offer employers advertising in The Dallas Morning News and PJB the ability to post their jobs on Yahoo! HotJobs.
Are we making money yet?
In reporting their 2Q06 results, publicly held newspaper chains have repeatedly noted that online advertising is the fastest-growing ad revenue segment, and the most profitable. But there’s a catch. To date, it’s often also the smallest segment, and the profitability results from the low basis cost of online advertising rather than the big revenue stream they’re bringing in. The Landmark’s Charter says the cost of hosting the publications’ website is half the surcharge to advertisers — a 100 percent profit.
Advertisers seem to feel comfortable with the price. Though they can opt out of the surcharge and advertise in print only, about 90 percent of them choose to pay the extra. Online ads contain links through the advertisers’ URLs, connecting prospective customers with the click of a mouse.
Big publications are struggling to latch onto some of that margin and self-selected customer base. In December of last year, Belo Corp., the publicly held parent company of the Providence Journal Bulletin (194,000 daily circulation) in Rhode Island and the Dallas Morning News (466,000 daily circulation), announced a sweeping companywide initiative to invest more in interactive media such as online classifieds, customized content on demand, and multi-platform advertising. On Aug. 10, it publicly outlined what that will mean for the staff of the Dallas Morning News. It’s offering voluntary severance, which it didn’t even call a buyout, to almost all its newsroom staff. In a press release that day, the company said it expected at least 85 of the roughly 475 newsroom employees to respond to the offer. If they don’t, involuntary reductions are possible. Eligible employees have until Aug. 30 to accept or decline — and the accepters’ last day will be Sept. 15. The company says "a significant newsroom reorganization" is expected to be announced in November.
The T&G’s Nancy Cahalen, when asked if the paper had undertaken or would consider a similar initiative, responds only that all departments are involved in the online initiative. "We do spread work around among a lot of people," she says.
Search for tomorrow
The future, some experts say, belongs to search engines. MSN and Yahoo are preparing to debut their local search engines by yearend, which will give media buyers such as Mike Donovan alternatives to Google local to make online buys. That will, he anticipates, restructure the pricing pattern for online pages such as Super Pages, whose click costs are much higher than Google’s. "That’s going to come down. They’re feeding off folks that don’t necessarily know what they should be paying," he says.
Just as web pages have gotten more sophisticated in terms of how they relate to search engines, search engines have gotten more discerning about web pages. Instead of focusing on keywords meant to boost a web page’s presence on the search engine, they target relevant content. "Search has been the thing that has disrupted everything," says Donovan. "It’s blown the industry apart."
Christina P. O’Neill can be reached at coneill@wbjournal.com
WBJ Web Partners
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