Promise Media
Online Newspaper Publishing – A Plan for Growth
Tactics for building profit, revenue and audience

Online newspaper publishing is a complicated process that requires a high level of commitment, planning and resources to be effective. This white paper outlines a plan for successful growth.

Three of the most important numbers in a print newspaper budget are circulation, revenue and profit. A newspaper Web site is no different because those same three goals are critical for success. Many newspapers would add a fourth goal for their Web site — extending the brand of the print product online.

Let’s explore these goals in more depth.

Audience

Whether free or paid, a newspaper requires a large audience to justify advertising rates. Likewise, a newspaper Web site needs a large audience — not to justify rates, but rather to build as many ad impressions as possible.

The key to Web site revenue and profit is total ad impressions, and the key to getting those impressions is growing as much audience as possible. It is entirely a volume business. Online ad rates have far less flexibility than print rate cards because Web sites have far more competition for online ad dollars.

Revenue

The growth in ad impressions — and again not a growth in rates — will result in the growth of revenue. In the beginning, the total volume of revenue is small but the annual growth rate is exceptional.

“Grow revenue at least at the same rate as audience. But first grow audience.”

After three years of a 50 to 100 percent annual growth rate, a small base of total advertising dollars will become much more beneficial to the paper’s top line. Grow revenue at least at the same rate as audience. But first grow audience.

Profit

A common mistake among newspapers is trying to achieve a 30 percent margin with their Web sites. Is it better to have a 30 percent margin with a 10 percent annual growth in the profit or a 10 percent margin with a 30 percent growth?

In this day of intense online competition, a good argument can be made for the latter. Grow market share to grow total profit. Newspapers became highly successful and profitable by gaining massive market share and therefore high profits. They won’t do so online by pricing themselves well above their competition.

Extending the core brand

Newspapers even today have high readership — but mainly among older demographics. Newspaper Web sites have strong readership among younger demographics.

As a result, online newspapers do very little damage to readership, circulation and advertising for the print product. Exending the core brand means using the Web site to capture non-readers of the print product and advertisers who don’t advertise there.

Functional Requirements

At least six business functions are required to manage an effective newspaper Web site:

  1. Product development
  2. Technology
  3. Content management
  4. Marketing
  5. Advertising
  6. Statistical tracking

Product Development

The people responsible for developing and managing a newspaper Web site often come from a news role. It is understandable that many sites emphasize news on the home page. But newspapers also have other valuable content that belongs on the home page — features and classifieds.

Feature content is highly prized by advertisers because of its easy targeting for niche products and audiences. Classifieds often generate the highest ad rates of any content on the site.

For readers, news matters the most on the home page. But for advertisers, features and classifieds matter far more. The important decision for product development is how much of news, features and classifieds are allowed to have a presence on the home page.

Likewise, layout also determines site results. Effective online advertising requires putting two display ad positions above the fold, meaning above the point on a Web browser when people have to scroll down to see more.

Extensive research and experience show that a small minority will scroll. The involvement of advertising people in the site layout — both where the display ads will go and where any classified links will go — will have an impact on revenue and profit.

Technology

Two major aspects of Web site technology are hosting and content management systems.

For Web site hosting, the standard practice is leasing space from a hosting company. Note some essential needs:

  • How often does the hosting company back up sites? Backups may take place anywhere from once a week to twice a day.
  • How much disk space does the agreement provide? Archiving 1,000 stories won’t use much space. Archiving 1,000 photos and PDFs will use a great deal of it.
  • How much monthly data transfer does the agreement provide? A newspaper Web site, especially a high-growth one, chews up a lot of bandwidth at a hosting company.
  • Finally, what kind of security record can the hosting company show? Be aware that shared hosting — where your site resides on the same server as other sites — increases the risk.

For content management systems, consider the following:

  • Just like with hosting, security is a major consideration. Do Web searches for information on the CMS track record for breaches.
  • Technical support is always a challenge. If the CMS is free from a community such as WordPress, Joomla or Drupal, be prepared for spotty support. The support only comes from the generosity of fellow community members.  Commercial newspaper CMS’s almost always come with paid support. The money is usually worth it.

Content Management

Major newspaper companies are generating 15 percent or more of their total advertising revenue from their Web sites. They generate such results in part by putting a substantial amount of newsroom staff time into those sites.

If the print product is shrinking, it stands to reason that there is less work for editors and reporters to put into the print product and more time to put into the online product.

Site performance improves with the quantity of material put on the site and the frequency with which the site is updated. Search engines respond to quantity and originality of content. More is always better.

Marketing

Promotion in the print product will drive more visitors to the Web site. Promotion of the print product on the Web site will drive more readers to print. However, many newspapers benefit the most from their Web sites by having the sites allow people to submit classified ads to either the site or the paper.

Common online marketing tactics for newspapers include putting the site address in the masthead, running house ads in the paper and running news story teases.

Email marketing for both readership and advertising is an effective tactic, although it takes a long time to build up a big enough list of email addresses to make an impact.

Link exchanges are effective because Google in particular ranks a site higher in search results if other sites link to it. External online advertising is worth considering, especially for high-value sections such as classifieds.

Integrate the Web site address in everything you do.

Advertising

Advertising is not near the end of this white paper because it is less important. It is down below because the other requirements above are necessary for successful advertising results.

The three most basic ad sizes are 300 x 250 (pixels), 160 x 600 and 728 x 90. Resist the temptation to offer other ad sizes. Building a successful Web site is complicated enough; keeping things simple will pay off.

The two most basic product types are banner and text ads. Sell banners to local advertisers at the top of the page; use inventory below the fold for house ads and advertisers generating the lowest rates on the site.

Most rate cards use CPM or cost per thousand to determine what an advertiser pays. Some papers use a sponsorship model, which is where an advertiser buys the home page or an entire section for a period of time regardless of the number of times the ad appears. The sponsorship model is gradually declining. Avoid it unless the advertiser is keen on it.

Customers come in three flavors — current print, former print and never print. A Web site is great for going after former and never in print advertising prospects. The Web site is worth offering to current print advertisers who are thinking about cutting their budgets, want experience with a Web site, etc.

Grow revenue as fast as audience.

Financial

One of the great benefits of online newspaper publishing is the statistics that are available through site analytic software, ad serving software and other tools. The most basic reporting of audience activity should include monthly unique visitors, visits, page views and ad inventory.

10 Takeaways

  1. Build volume above all else — page views and ad inventory in particular
  2. Decide how much features and classifieds will dominate the site
  3. Pursue a modest profit margin but a high total profit growth rate
  4. Use the site to extend the core print brand
  5. Give classifieds a strong presence on the site
  6. Find a Web hosting company with daily backups and good security
  7. The more content the better
  8. Integrate the Web site address in everything you do
  9. Grow revenue as fast as you grow audience
  10. Track all statistics at least monthly if not weekly or daily

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