Mass Media in a One-to-One World
Scott Stines - IDEAS Magazine - March 2000

It should come as no surprise that newspapers initially approached the Web from a mass media perspective. The Web was viewed as a low cost distribution channel for newspaper content and advertising. During the last half of the 1990's, hundreds of newspaper web sites appeared, often featuring the same content and classified ads found in the daily print product. Newspapers, large and small, invested significant resources developing and managing their online brands, some with little or no expectation for a return on investment.

While ads provided base line revenue, most newspapers were unable to generate enough revenue to cover operating costs or achieve traditional operating margins. Many newspapers freely admit they have not found the right business model for the Web. Still many believe they must maintain their Web presence to defend their local news and information franchise. Consider the following when charting your newspaper's future direction on the Web.

Its About Transactions

A bank executive shared some revealing information last year at a database marketing conference attended by newspapers and retailers. The cost of a customer transaction with a teller in a branch office was more than $3.00. The same transaction at an Automatic Teller Machine (ATM) cost $0.36. That same transaction online cost $0.03. Are you thinking what I'm thinking? How much does it cost to start a subscription or process a vacation stop? What is the true cost of processing a classified ad? How much does it cost to renew a special section advertiser or deliver an ad proof to a customer for approval?

Perhaps a more important question is, "How much of your newspaper's online budget is devoted to developing online transaction capabilities?" Transactions like starting a subscription, placing a classified ad, reviewing or approving a display ad?

An Example Close To Home

INMA knows first hand how powerful the Web can be in terms of increasing the speed and lowering the cost of transactions. Each year INMA publishes a membership directory. This is generally a long, drawn out project requiring a lot of follow-up with members. Well, not exactly. This year INMA used the Web to send mass personalized emails to members requesting they confirm or update their contact information. More than 60% of association members responded within 36 hours. What took weeks, now took hours.

Its About Managing Knowledge

The February 2000 issue of Knowledge Management magazine, reported that The New York Times Co. acquired Abuzz Technologies of Cambridge, Massachusetts last year. Abuzz's Web-based knowledge management product, beehive, "Š(puts) experts in large companies in touch with others who need their knowledge." The Times Co. is reportedly using the product's technology to "build online communities. . . . and target narrower subsets of readers by combining relevant content with interactive services."

The London Telegraph is another example of a newspaper leveraging the interactive characteristics of the Web. Its online brand, The Electronic Telegraph, has been used along with the daily newspaper to develop a database containing valuable information on consumers. This information has been translated into the knowledge that spawned the creation of a number of profitable interactive services generating new revenue from pet owners to wine drinkers.

Its About Learning

Is it time to take a fresh look at what the Web has to offer your newspaper? If so, consider attending or sending your staff to the INMA Internet Workshop, April 13-14, in Miami. There are a number of newspapers capitalizing on the interactive capabilities of the Web. Several will have representatives serving as discussion leaders at this one-of-a-kind workshop focused exclusively on newspaper Internet marketing issues. The best defense is still a strong offense. Plan on joining us in Miami for a new perspective on the value of the Web to newspapers.

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