A Sustainable Business Model?

Last week AdWeek featured an analyst report from Deutsche Bank that was positive on urban daily newspapers. Analyst Paul Ginocchio expects a return to profitability but not until 2012. Since newspapers have seemed to be an endangered species for the past several years, even that level of optimism caught my attention.

When I read it, I was even more intrigued. His prediction is based on outsourcing and continuing “to wring costs out of their operations.” Ginocchio wasn’t very sanguine about newspaper websites, pointing out that users spend just 41 minutes a month on newspaper sites.

A press release issued today by the Newspaper Association of America says that figure grew to 43 minutes per month in the 3rd quarter of 2007. They add that 59 million people, 37.1 percent of active Internet users, visited a newspaper site in that time frame, up from 56.9 in the 3rd quarter last year. Page views increased from 2.5 to 2.8.

Those stats are in line with the view that websites represent the future of newspapers, not print, no matter how many costs they wring out. But I’ll let others argue that if they wish. I’d like to report on a genuinely innovative newspaper business model that I ran across recently.

BostonNow debued in April 2007. It’s the brainchild of Russel Pergament, “a print guy” by his own admission. He’s also an expert on local print—the founder of the Brookline-Newton Tab and the founding publisher of Boston Metro. And he has a new hybrid business model in mind. He says that:

the marketplace has gotten ahead of the newspapers. All of them. That the arrival of our social media, coupled with the fragmentation of media and the personalization of media, has created something different, and the same old thing is not reaching people the way it used to. Hence our hope, our kind of struggle, to define with our reader[s’] input this new channel.

The print version, especially, represents a departure from the content of other local dailies, most of which consists of news bureau feeds. BostonNow employs real reporters and they do investigative reporting. Russel proudly shows articles like the rat one, many of which are later picked up by the two large dailies in Boston.













But it is the web version where the new model is being revealed. Looking at the top section of the home page, it’s not too different. You really begin to see the difference when you look below the fold. News items are tagged (there’s a tag cloud at the bottom of the page) and readers are invited to share their own articles post to a blog. BostonNow’s commitment to reader involvement shows clearly in their invitation to join the morning editorial conference.

Blogs are a key to reader involvement. The staff was smart enough to know that few members of the general public have their own blog, strange as that seems to many of us. But the person on the street doesn’t have a blog, hasn’t commented on a blog post and may barely know what they are. BostonNow’s Interactive Media Director Susan Kaup and her assistant visited libraries and neighborhood centers, teaching people to blog. That effort seems to have borne fruit.

Russel Pergament will tell you that the integrated business model is not yet clear in his own mind. He’s working it out with the help of his readers! That’s a real step forward for a hybrid print/Internet business model—one that may just prove to be sustainable, not only in terms of profit but also in terms of reader engagement and a valued role in the community.
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Mass Media Master Experiments with New Media

An alert student pointed out the new P&G foray into mobile “advertainment.” It shouldn’t be a huge surprise. They’ve been producing soap operas since the early days of radio. They continue to produce television soaps—the Guiding Light since 1937 and As the World Turns since 1956.

So they have plenty of experience. The current venture is a series of 3-minute videos features Ashley trying to make her way in the big city. It’s an interesting attempt to reach younger viewers. If the reactions of some of my students and comments I saw on other blogs are a good indication, they need to add more “entertainment” to the “adv.” But they deserve congratulations for making a start.

If you’re like me and have no idea how to get this content on your mobile phone, watch the version that’s posted on the Tide website and see what you think.

Watch the ad here.

Remember, this is not video; the mobile networks won’t support long video clips yet. But someday we’ll have broadband mobile and mobile video will be in business. Marketing Charts reports a 34% increase in viewing of mobile video between January and August of this year. It’s still just 3.7% of US mobile subscribers, but their numbers are growing.

Will P&G be in a better position to take advantage of mobile video when its time really comes? Undoubtedly they will even if the current content seems lame! It’s actually not their first experiment. Looking around, I find that they tried something similar with Herbal Essence shampoo last year. Apparently that was terminated when their mobile video supplier went bust under the weight of all the pornography on the site.

There is suggestion of another mobile experiment using British mobile services supplier Flytxt. The SMS sweepstakes promotion called Irresistibility IQ Test for Crest and its associated website are still available. Note that Miss Irrestible has a MySpace page! Especially take a look at the questions; are they appealing to the SMS user? A lot of people use text messaging, but the profile is undoubtedly skewed to young to middle-aged adults. Are they looking for something more engaging?

I’ve frequently pointed out that this is a time for marketing experiments. If you are especially interested in mobile, it’s a time for following developments in Europe, Japan and the Pacific Rim, all of which are far ahead of the US in developing broadband mobile applications.

Can your firm do better? Should it be trying?
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Don't Just Listen - Pay Attention to the Voice of the Customer

The marketing world is all a-twitter with news of the iPod touch ad originally created by an 18-year old English college student. On his YouTube post in September Nick Haley said,

I loved the look of the new iPod Touch, found this music, and thought it was perfect for it. I made a commercial using material from apple.com and editing in Apple's Final Cut Pro.
*Sorry about the grey start, its the way YouTube deals with MPEGs*
Made on my MacBook - September 2007.
Music - CSS - Music is My Hot Hot Sex.

Apple found the 30-second ad, loved it, and brought the young man to the US to confer with their agency, TBWA/Chiat/Day. The result? His ad, with minor modifications, started airing last night on Desperate Housewives and the World Series. If you missed it, take a look.


Apple posted a higher quality video here.

And, no, apparently no one knows what kind of a deal the agency made with Nick Haley. Whatever it was, as a college freshman, he’s probably pretty happy with it. And if he wants to go into advertising, he has a great start on his portfolio!

I think the relevant words in all of this are “Apple found” it. But you also have to add, “they followed up with a smart response.”

So enjoy the ad. It’s slick, professional and thoroughly appealing. While you do, ask, “Who in my company scans communication channels for what users are saying about us?” “What do they do when they find it?” “Do we have a mechanism for dealing with the negative by opening a dialogue?” “Do we encourage employees at all levels to bring material to the attention of marketing?” “Do we have an organizational process/organizational support for bringing the positive in and taking advantage of it?”

I’ll belabor the obvious. It’s is a rich ecosystem of customer-created content out there. Marketers ignore it--good or bad--at their peril. If they’re smart, they react positively to the good stuff and use it in ways that build strong bridges to their customers. And if they get lots of positive media twitter in the process, that’s a bonus!
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Social Networks Getting Smaller?

Much has been made of the growth of the big networking sites like MySpace and Facebook. As this table from Marketing Charts shows, there’s good reason for all the attention. They have tremendous reach. It’s easy to liken them to shopping malls, with something for everyone.

So I was intrigued last week when I ran across this article in the New York Times. The idea of a social network just for your apartment building made me to search to see what was available. LifeAt is the firm referenced in the article. It’s pretty new and the application below seems to be the work of the property manager, but if the residents choose to participate it will become interesting and vital.


As I looked I realized there were numerous sites where one can set up personal networks and other sites that have local collaborative content like Topix.com. There are, of course, local newspapers, which are offering many kinds of user-submitted content and creating community around that.


I feel another mashup opportunity coming on. There is growing support for the creation of neighborhood or small town communities although sites like FatDoor are in their infancy. Or web-savy residents will build sites on their own, taking feeds from sites like CitySearch and Craig’s List. They’ll adding a lot of opportunities for their neighbor to provide content and they’ll not only have vibrant local social nets, they’ll also have ideal opportunities for local advertising. It won’t be a virtual community like Second Life; it may in fact, be a lot more useful and engaging—a new version of the local shopping papers, but one that’s personal and interactive.
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Integrating New Media Into the Mix

Integrated marketing communications is one of my favorite soap boxes. An excellent article in iMedia Connection today reminded me that I hadn’t discussed it in this forum. And it’s not only really important, it continues to become more difficult. We have more media options and a lot of them are really specialized. Can the same agency handle a national TV campaign and run your advertising on MySpace or Facebook, for example? It’s a good bet it can’t. So the problem—and the core of the solution—looks like this.

The media and ad exes interviewed for the iMedia article return frequently to “the big idea.” That goes all the way back to David Ogilvy and no one has said it better. I found this on Brainy Quotes:

It takes a big idea to attract the attention of consumers and get them to buy your product. Unless your advertising contains a big idea, it will pass like a ship in the night. I doubt if more than one campaign in a hundred contains a big idea.
David Ogilvy

If you don’t have that “big idea” (or you might prefer the Rosser Reeves phrase “Unique Selling Proposition”), you have nothing to integrate around and you won’t have a consistent message. So that’s major step one.

Step two requires executing in this world of fragmented markets, media and suppliers. Let’s make one simplifying assumption: the specialist agencies are not only experts in a particular technology (video) or application (Facebook), but they understand the market segments it reaches. If they don’t understand markets, their skills are hollow, and they are not going to do the marketing job. So hire not only for technical expertise but for the ability to use it to reach markets, often niche ones.

This requires managing execution across multiple groups inside and outside your organization. Don Buckley, SVP of Interactive Marketing at Warner Bros., talked about that a few months ago. What he says suggests they have a good handle on it in their own organization.

Click here to view video.

Listening I was reminded of the very early days of database marketing and the early days of the Internet when the “techies” were often isolated from “the suits.” Successful marketing organizations are now integrating the people as well—perhaps in work teams, perhaps the kind of frequent interaction Don Buckley talks about.

However you choose to manage the process, it starts with a big idea that can be messaged appropriately across media and it achieves its goals by consistent communication across specialist domains.

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