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Volume 2 · Number 2 · December 2003 digital edge report Online Registration: Converting Anonymous Users to Loyal Customers

Online Registration: Converting Anonymous Users to Loyal Customers By J.D. Lasica

J.D. Lasica ([email protected]) is an independent journalist, former new media manager and former editor at The Sacramento Bee. He is currently writing a book about digital media, and writes a daily Weblog at www.new- mediamusings.com.

NAA Staff Acknowledgements: Editor: Rob Runett Layout: Katie Howington

© 2003 the Newspaper Association of America. All rights reserved. No part of this doc- ument may be reproduced in any form or by any means without the prior, written permission of the Newspaper Association of America.

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Table of Contents

Introduction ...... 1

Approaches to Registration ...... 2

Buy or Build? Vendors and Market Size Consideration ...... 11

The Impact of Registration on Revenue ...... 19

Benefits to the Newspaper Enterprise Beyond Advertising ...... 24

The Legal Arena ...... 27

Looking Ahead ...... 30

Additional Resources ...... 32

Report Sources ...... 33

For more information about the Digital Edge Report, contact: ROB RUNETT, Director, Electronic Media Communications Newspaper Association of America 1921 Gallows Road, Suite 600, Vienna, VA 22182-3900 703.902.1806 fax: 703.902.1745 email: [email protected] www.digitaledge.org

During the past three years, a handful of news Circulation, classifieds, editorial and customer pioneers took the first halting steps down the service all stand to gain. trail of online registration. But it wasn't until 2003 that the industry began a wholesale At a minimum, registration has succeeded in move toward user registration, coming to making the online space more tangible to adver- view it as an inevitable step and valuable tool tisers. “When you approach an advertiser to sell in understanding online customers. an advertising campaign, you’re no longer talking a bunch of techno-flap about page views or Today the conversation has largely moved past unique visitors. You’re talking about real people whether to require registration and settled into a and customer characteristics in a language that’s new phase: How can newspapers capitalize on meaningful to advertisers,” said Steve this new wealth of customer data? Leaders in the Yelvington, vice president of strategy and con- field of online registration have begun to mine tent for Morris Digital Works. “That’s a change these registration riches to deploy targeted this industry just desperately needs.” advertising campaigns, launch new e-mail initiatives and build out sections of their Web sites in This report will look at online registration from response to readers’ needs. top to bottom, with actionable strategies for decision makers who have committed to a registration program and for those who are weighing the pros and cons. The following chapters Registration data can explain the most advanced registration tech- become essential building niques, the various registration models avail- blocks in a paper's efforts able, best practices, new revenue streams, les- sons learned from registration pioneers, added to become an audience- value brought by vendors, and what’s coming focused media company. next.

But while registration is rooted on the Web, its benefits extend across the enterprise. If executed with care and precision, and embraced by the publisher, registration data can form the essential building blocks in a paper’s efforts to become an audience-focused media company.

On the Internet, many people still chafe at the Today, with the advent of registration systems, idea of having to walk through a registration Web managers are asking for, and receiving, process to access news. But the complaints are information about the gender, birth year, postal becoming less bellicose now that more news sites address and local media habits of their online vis- have adopted the practice and registration has itors. Besides The New York Times on the Web, taken hold as a familiar part of the online land- which required user registration since its first day scape. on the Web in 1996, other early movers include Belo Interactive, Tribune Interactive and Newspapers of all sizes have taken the plunge Washingtonpost.Newsweek Interactive, all of and now require registration, from The New York which impose access controls on their content to Times (11.7 million registered users) to the spur users to fork over the demographic goods. Watertown (S.D.) Public Opinion (8,814 registered users). During 2003, Advance Internet, Newspapers of all sizes Knight Ridder Digital and Morris Digital Works have taken the plunge began to roll out registration programs. So did USAToday.com, SignOnSanDiego.com, and now require registra- NewsOK.com in Oklahoma City and dailies in tion. mid-size and small markets such as The Augusta (Ga.) Chronicle, The Bakersfield Californian, and Carroll County Times in Maryland. There's a new bargain being struck between Internet publishers and site visitors: Publishers Morris Digital Works' Steve Yelvington summed can't afford to provide local content on the Web up the new prevailing mindset this way: "Given for free, but instead of demanding payment, dig- that our business model is built on aggregating ital-media companies want information. And mil- relevant audiences for local advertisers, there's no lions of people are providing personal data in other way to go. My only regret is in not moving exchange for content. ahead as aggressively as we should have in har- vesting this information. I wish we had done this "People have to pay in some form, and the best a year or two ago." way to do that online is to get payment in the form of personal information as a way to increase A year or two ago, most online news managers targeting advertising possibilities," said Rebecca could only glean hints about their audience by Baldwin, director of product development for poring over traffic reports and IP addresses. In Tribune Interactive. truth, they were largely flying blind, unable to ascertain the demographic and psychographic Added Stephen Newman, deputy general manag- makeup of their visitors. Registration doesn't er of NYTimes.com, "From the beginning we felt completely solve that puzzle, but it adds deeper strongly that filling out a form one time was a layers of understanding, especially when com- very small price to pay for the value you were bined with other audience management tools that getting." track individuals' behavior while visiting a Web site.

2 © 2003 Newspaper Association of America. All rights reserved. digitaledge Interestingly, all of these registration pioneers have taken somewhat different paths in how they ask for and use customer data.

Different Approaches to Registration

Approaches to registration run the gamut from voluntary registration (San Diego), to a quick three-question pop-up approach (Washington Post, USA Today), to a minute-long form (The New York Times), to a lengthier form (Tribune), to a detailed form that takes perhaps four minutes to complete (Belo).

SignOnSanDiego.com began to ask users for registration information in July 2003. "We liked the Washington Post approach, but we wanted something still more gentle," said Chris Jennewein, The San Diego Union-Tribune's director of Internet operations. "We didn't want to SignOnSanDiego.com go the L.A. Times route, which we thought was too restrictive." newspapers see it as the first step toward a sub- Through the use of cookies, a user is allowed three scription model." visits to the site before a window pops up to ask for age, gender and ZIP code. Even then, the user can The Washington Post Co. launched its unobtru- click through to the story by choosing, "Ask me sive but mandatory registration program on Aug. 7, later," allowing the user three more visits until 2002. Site visitors were met with a pop-up box that another pop-up window appears. If he or she does asked them to volunteer their age, gender and ZIP sign up, it takes all of 10 seconds. code (or country if they lived abroad). A week later washingtonpost.com began to make the questions San Diego is home to a large military community, mandatory and launched the survey section by sec- which prizes its privacy, Jennewein said. It's also a tion across the site, so that only the front page is destination city where travelers may be visiting the freely accessible. site to plan a vacation itinerary, "so roping off the site would be a mistake in this market," he said. CEO Christopher M. Schroeder said at the time that the site was "committed to better understand- "In an industry like newspapers where growth in ing our audience so we can create a more powerful customers is flat and the one growth of area is user and advertiser experience," and that being online, we think it's vitally important to continue able to target segments of the audience was "an that growth," Jennewein said. "Online is one area exciting and potentially enormous proposition for where newspapers can continue to be a mass medi- Web advertisers. Interactive capabilities such at um. There's a danger in the registration concept if this are not only unique to the medium, they are the

3 © 2003 Newspaper Association of America. All rights reserved. digitaledge Azcentral.com, the joint Web site of Gannett Co. properties The Arizona Republic and KPNX TV, signed up 536,000 users within seven weeks of launching registration on Sept. 2, 2003. Like USAToday.com and washingtonpost.com, it asks for a user's age, ZIP code and gender. "With a long registration form, there's no incentive for people to tell us the truth," said Mike Coleman, senior manager of digital media.

washingtonpost.com For first-time visitors, azcentral.com decided to steer a course midway between washingtonpost.com and USAToday.com. If keys to the success of quality content sites." a user follows a link from Google News or Matt Drudge or a Weblog, no registration is required Company spokesman George Nolan said the Post until the user clicks on a link to a second story. continues to use registration data to improve the "We didn't want to shut out Google News, espe- user experience and to drive advertising revenues cially when a national story hits," Coleman said. through precision ad targeting. He said the site "And we don't want our registration database does not disclose registration figures. filled with people who just want to read a story about Britney Spears and Justin Timberlake." USAToday.com launched its own registration effort in February 2003 with a system that close- The one hitch so far is that azcentral.com assigns ly emulates that of washingtonpost.com. The site no log-in or password, and so users have to re- collects three pieces of information — ZIP code, register each workday if they work at companies age and gender. Hence, the system's nickname: where the IT department clears out the cookies ZAG. "Our goals were to make it more user from hard drives on the network every night. friendly for customers as well as information rich Azcentral.com has assigned one full-time staffer for advertisers," said Susan Lavington, director of to deal with "the 18 different reasons people marketing. The ZAG approach seemed nonintru- might be having cookie problems," Coleman said. sive for users and covered the basic demographic elements of interest to advertisers, she said. Another newspaper company squarely in the ZAG (ZIP code, age, gender) camp is Advance Unlike the Post, USAToday.com requires registra- Internet. "I think it needs to remain quick and tion only for returning visitors. "If you're a first- simple to work," said company president Jeff time customer, we want you to sample the site Jarvis. "Users are tolerant of a small speed bump. and come back again," Lavington said. Returning I fear they would not tolerate a maze." visitors get a registration interstitial when they click to a story off the front page or section front.

4 © 2003 Newspaper Association of America. All rights reserved. digitaledge Visitors to MLive.com, NJ.com and other Advance Internet properties see a story if they follow a search engine or Weblog link; to follow a second link, registration is required. A few business-related services also don't require registration. "Our traffic is up considerably over last year and that's the best proof that this works," Jarvis said.

Advance Internet decided to reopen the sites' employment sections to non-registered users to make it clear that the questions about age azcentral.com and gender were not related to employment advertising. "They weren't, but we wanted to be certain there would be no misunderstanding," Jarvis said. nation. In addition, readers who access the site via Google News do not need to be registered to The New York Times on the Web has been view the article. However, users who follow a requiring users to register since its first day in Google search engine link to the site do need to cyberspace back in 1996. Its registration database be registered. The Times is working on ways to has grown from 1.7 million active users 18 move certain Google search results outside the months after launch to 11.7 million today — the registration firewall, said spokeswoman highest number of registered users for any online Christine Mohan. newspaper in the world. Tribune Interactive helped cement the current The driving force behind registration, New York trend toward registration by introducing it at Times Digital CEO Martin Nisenholtz, told a chicagotribune.com in March 2002 and at Jupiter Media conference in March 2002: "The latimes.com a month later. "I don't know if we purpose was not so much to collect demographic broke the ice or if everyone was thinking about information about our users, but more to establish doing the same thing, but once the Chicago customer contacts. Then when we wanted to go Tribune and Los Angeles Times began requiring back and upsell them to new services, including registration, we began seeing it much more paid products, we could." across the industry," said Rebecca Baldwin of Tribune Interactive. The Times originally asked for age, ZIP code, gender and income range. In January 2002, All told, Tribune Interactive has 3.5 million reg- NYTimes.com added new fields to its registra- istered users across the network — and it is a net- tion page that sought information about job title, work. A user who registers at one Tribune site can function, industry and whether the user sub- log on to any of its other sites. Tribune clearly is scribes to the newspaper. thinking about packaging segments of its network-wide audience to advertisers. "Tribune Readers who are not registered can see doesn't have a central strategy for required regis- NYTimes.com's front page, section fronts, classi- tration. What we do centralize is the enabling fieds and movie, theater and restaurant reviews, technology," Baldwin said. given New York's popularity as a tourism desti-

5 © 2003 Newspaper Association of America. All rights reserved. digitaledge Each newspaper is free to choose whether to Users who follow a search engine or Weblog link roam down the registration path. Tribune to chicagotribune.com or latimes.com can't Interactive's registration form asks for the user's access the article unless they have registered. name, birth year, gender, phone number, e-mail "Both L.A. and Chicago said they saw no reason and street addresses and subscription status, with to let people in because they got there in a certain some sites asking for household income and way," Baldwin said. areas of interest. Some non-news sections, such as latimes.com's advertorials, Kids Reading On the whole, the reaction of users to registration Room, high school sports and L.A. Times events has been "surprisingly receptive and overwhelm- such as the Festival of Books and Travel Show, ingly positive," she said. Those who complain are are open to non-registrants. told that registration enhances advertising revenue, which allows the company to provide a free site, "and they accept that," she added.

Latimes.com lost about 20 percent of its audience immediately following registration but regained the traffic after seven months, said Elaine Zinngrabe, the site's assistant general manager and executive producer.

In 2003, The Hartford Courant's ctnow.com and The Orlando Sentinel launched registration efforts, following in the foot- steps of Chicago and Los Angeles. "Their fears were relieved when they saw the first couple of sites roll out so successfully," Baldwin said.

"There's an initial drop-off in visits when you require regis- chicagotribune.com tration, but metrics like page views, loyalty and visits per visitor continue to grow. Yes, In Chicago, the new media managers embraced we have fewer drive-by visitors, but those who registration as a tool to get a deeper understand- do come have a stronger relationship to the Web ing of their online audience, which they weren't site than before." able to glean from third-party surveys. The registration data allowed chicagotribune.com to deliv- Several new media managers expressed admira- er targeted ads and to tailor marketing messages tion for the aggressive registration approach pio- to a select audience on behalf of advertisers, neered by Belo Interactive. "We've been out in Baldwin said. front in a lot of ways in the online space, but in this area we're following the lead of Belo, which-

6 © 2003 Newspaper Association of America. All rights reserved. digitaledge has done just an extraordinary job of registration rather than a nuisance, she said. implementation," said Yelvington of Morris Digital Works. The company began a yearlong rollout of mandatory registration in May 2001, beginning with Linda Fisk, vice president for audience develop- WFAA.com and DallasNews.com's sports sec- ment and management for Dallas-based Belo tion. By mid-2002, all 24 of Belo's Web proper- Interactive, said the benefits of user registration ties were under the registration umbrella. Today include targeted content and advertising, person- the only sections not requiring registration are the alization options, segmented online marketing front page of each site, the archives and classi- programs, online loyalty programs, targeted fieds. incentives and rewards, and product development guided by consumers. A chief source of wonderment in registration cir- cles is how Belo Interactive has managed to pull "It's a win win win," Fisk said. User registration off the trick of asking online readers to answer benefits advertisers by providing rich, detailed some two-dozen questions. Users are asked for demographic and psychographic profiles about their name, gender, birth year, e-mail address and customers as well as giving ad clients a way to 16 lifestyle questions about hobbies and interests. tailor messages to select audiences. Registration A phone number and income level are voluntary, increases the ability of Belo's newspaper and TV making it more likely that those answers are Web sites to create content, products and func- valid, Fisk said. Belo's newspaper sites ask for a tionality tailored to users' interests and lifestyles. street address to match against the circulation And customers gain by having a more personal- database; Belo's TV station Web sites ask for a ized content experience and by receiving adver- ZIP code. tising messages that are useful and valuable

DallasNews.com

7 © 2003 Newspaper Association of America. All rights reserved. digitaledge Fisk said she is asked all the time by colleagues Two years ago, users were more wary about the at other sites about the risks of driving away practice of registration, but now they see it as a users. "The fear in the industry is that you can't normal course of business on the Internet, Fisk have a long registration form, that you can't wall said. As part of its registration effort, Belo off the whole site, that the outcry will be incredi- Interactive created an in-house customer service ble and you'll drive consumers away. I was system, with a small number of staffers given the braced for worst but those fears just weren't real- task of responding to reader e-mails. ized by our organization."

Mid-size, Smaller Markets Join the Trend

Newspapers in mid-size and smaller markets have started to join the registration bandwagon, viewing it as an opportunity to foster closer customer relations and produce additional revenue streams.

NewsOK.com, a joint venture of The Daily Oklahoman (207,538 circulation)and KWTV, launched a voluntary registration program on March 17 and got 8,000 people to sign up in the 10 days before it locked down all stories. NewsOK.com General manager Kelly Dyer handled e-mail complaints, which amounted to 0.5 percent of those who registered.

Users accept the three- to four-minute process Site managers settled on a fairly extensive regis- because they know they'll be getting something tration form, asking for name, address, e-mail, of value in return, Fisk said. Belo Interactive test- phone, gender, birthday, income, education, sub- ed forms of varying lengths and found that two- scription status, Internet connection speed, and third believed the lengthiest form was easy to hobbies and areas of interest. "Some people who complete and three-quarters appreciated the don't have a lot of education were offended, and lifestyle questions. some people told us we didn't need their birthday, just their year of birth," Dyer said. "We thought it Most of the feedback took place in the first month would be nice to e-mail them the front page of the after launch, with complaints coming from 2 per- newspaper on their birthday." cent of users who registered. Traffic to the sites dropped off initially but recovered far faster than NewsOK decided to launch registration during expected. "Within eight weeks, we were hitting March, a high-traffic month because of the new records of users and page views on the sec- NCAA basketball tournament. The site uses con- tions that we had walled off," she said. tests and games as an incentive to register. The

8 © 2003 Newspaper Association of America. All rights reserved. digitaledge site has 181,918 registered users as of October Charlotte Observer) a week later. "We're looking 2003, with a robust opt-in rate of 50 percent for at these two markets as test cases before we offers from partners or advertisers. extend the concept to our other sites," said Dipik Rai, senior business manager for registration at Registration helps the site define its audience bet- Knight Ridder Digital. ter for both editors and advertisers, Dyer said. Some 70 percent of the site's registered users live KansasCity.com promoted registration by featur- in Oklahoma, an important selling point to adver- ing a contest that offered a year's worth of free tisers. Requiring an e-mail address lets KWTV groceries from a local supermarket or a paid trip News 9 communicate with users during sweeps to a Kansas City Chiefs-Denver Broncos football month. It also gives the Oklahoman a way to do game in Denver. The contest, which included tie- outreach to the 38 percent of users who do not ins at local sporting events, was an effective way subscribe to the paper. to boost sign-ups for the site and to capture e- mail and postal addresses of local residents, said The Bakersfield Californian (65,899 daily print Anna Zornosa, chief marketing officer at Knight circulation) launched registration on Feb. 1, Ridder Digital. Most of the site visitors who reg- 2003, and has garnered more than 50,000 regis- istered for access during the contest entry period tered users to date. "A primary goal was to learn also participated in the contest. more about our users," said Darrell Kunken, vice president of strategic marketing and interactive media. "We wanted detailed data on the age and The Bangor (Maine) income profiles of our users, plus their relationship to our core print product." Daily News' executives view registration as the Morris Digital Works of Augusta, Ga., began to first step toward an require registration at AugustaChronicle.com, the Web site of Morris Communications Corp.'s flag- online subscription ship newspaper, in July 2003. Like others, it model. began by putting the registration curtain across the business section and handling customer questions and complaints before rolling it out to other Knight Ridder Digital will bring registration to at sections. "We didn't want to slam the curtain on least seven more markets during the first half of the entire site at once, so we started with a small 2004, Zornosa said. Contents will have a promo- set of users and expanded it in such a way that the tional role in some of these markets. Smaller load would be consistent," Yelvington said. papers, too, have begun wading into registration. At the Watertown (S.D.) Public Opinion AugustaChronicle.com generated nearly 22,000 (evening, 12,798), publisher Mark S. Roby said, registered users in the first two months after roll- "We want to know who the readers of our online out. "We're working from our larger markets product are, hence we require registration to read down, and we may modify our plan as we roll the locally produced content of out," he said. PublicOpinion.com." The combination of print subscriber data and demographic data derived Knight Ridder Digital decided to test its regis- from online users offers advertisers a better value tration rollout at two newspapers to iron out the proposition. wrinkles. KansasCity.com (home of the Kansas City Star) was the first to launch, on Oct. 2, 2003, The NH.com network of Web sites, including the followed by Charlotte.com (home of the Nashua Telegraph, NH Magazine and NH

9 © 2003 Newspaper Association of America. All rights reserved. digitaledge Business Review, will integrate a registration hadn't even thought about the customer service component in January/February 2004 for users angle," he said. Answering questions from con- who click beyond the home page and section cerned site visitors is "a real time sucker." fronts. Expect to spend at least an hour a day responding The Bangor (Maine) Daily News (63,611 circu- to people who can't log on or who disabled cook- lation daily) has collected personal information ies in their browser. Asking people for personal from 120,000 users since it began to require reg- information on the registration page means they istration in May 2002. The newspaper has not yet will expect a higher level of customer service, he used the registration numbers to try to boost said. (See Archambault's Digital Edge article on advertising revenues, said Tim Archambault, the hassles new media managers should expect to online services manager and a one-man Web face — www.digitaledge.org/registration.html) team for the newspaper. Instead, the newspaper's executives view registration as the first step Among the most common problems: Some pro- toward an online subscription model. "This gives grams that stop pop-up ads also block cookies. us a gauge of whether we should charge," he said. WebTV doesn't hold cookies well, and that "It's going to happen, but we're waiting for a crit- accounts for 5 to 6 percent of bangornews.com's ical mass of newspapers to go that route first." audience. Internet Explorer's default settings might not accept a cookie from a site it doesn't Archambault cautioned newspapers considering recognize as a trusted partner. "I also get hate registration not to underestimate the customer mail from Green Party people who think cookies service commitment that is required. "I talked to are something we put on their computer to watch someone from Knight Ridder who was two them," Archambault said. weeks away from launching registration and they

AugustaChronicle.com

10 © 2003 Newspaper Association of America. All rights reserved. digitaledge Archambault is thinking of making one change to He is weighing a change that would let first-time the paper's system. "We had 5,000 registrations visitors access an article or sample the site; if one day because Rush Limbaugh mentioned an they come back, they'll face a registration pop-up article on our site. Those one-time visitors don't screen. do us much good."

Best practices:

•Tell your readers in advance that registration is coming by posting a notice prominently on the home page, written by the site manager, two to four weeks in advance.

•Begin with a soft, voluntary registration so that your system is not overwhelmed all at once.

•Allow visitors a chance to sample stories on your site before requiring registration.

•Don't drive away traffic from search engines and Weblogs by blocking access when someone follows a story link. Forcing one-time visitors to register only pollutes your registration database.

•Think carefully before deciding which data points you wish to collect from users.

•Commit adequate resources to customer service for the increased workload.

•There is no one-size-fits-all formula in deciding the length of a registration form. You're the best judge of how your audience will respond.

Buy or Build? Vendors and Market Size Consideration

Online newspapers considering a registration sign on with another vendor to deliver targeted system have two initial decisions to make: First, ads. do they build it in-house or hire an outside vendor? Second, what do they do with the data once USAToday.com built its registration system in- they have it? house by employing the same technology used for its advertisers' interstitial pop-ups. To date, about nine out of 10 Web content sites SignOnSanDiego.com built its registration sys- with registration systems have built it them- tem in-house by using Zope, an open-source selves, according to Dave Morgan, founder of application server from Zope Corp. in software company Tacoda Systems. Putting up an Fredericksburg, Va. Tribune Interactive devel- HTML form or pop-up screen to collect user data oped its system internally and hired Exterion for is the easiest part of the process. The more chal- its ad mail program. NewsOK.com built most of lenging issue is how to parse, analyze and take its system in-house and hired Ion Technologies of advantage of the information once it's captured. Dublin, Ireland, "for less than $10,000" for its e- There are other factors to consider as well: mail tracking software, said general manager whether to hire a vendor to handle e-mail Dyer. newsletters and marketing messages, whether to

11 © 2003 Newspaper Association of America. All rights reserved. digitaledge While this report cannot detail all the different also can manage registration. Knight Ridder vendors that serve online newspapers' audience contracted with eMeta to provide access control management needs, here's a quick rundown of for its new registration systems at Kansas- some of the key players: City.com and Charlotte.com. Other clients include NYTimes.com, TheStreet.com, FT.com. •Tacoda Systems, New York: By tracking users' surfing patterns and mapping that against regis- •mass2one, Hiawatha, Iowa: Founded in 2000, tration data, clients can serve targeted advertis- this startup focuses chiefly on permission-based ing or customized content to individuals. Tacoda e-mail marketing. Its audience management also offers analytical tools that let clients know offerings include a registration component. which customers are visiting which sections of their sites. Clients of Tacoda's audience management software include eight of the nation's Sorting Out the Contenders largest newspaper companies. The Richmond Times-Dispatch and Tampa Bay Online use its Registration data alone won't get you to the new registration software. promised land. But it can be an invaluable source of insight into your customers when combined •Nando Media, Raleigh, N.C.: The online unit of with behavioral tracking and offline databases. The McClatchy Co. in Sacramento, Calif., offers a turnkey online registration system that allows for password protection of Web pages and sites "The reality is that in a busi- and for the collection of users' demographic profiles and site behavior. Clients include the Star ness sense, we're not inter- Tribune in Minneapolis and The Bakersfield ested in transient traffic from Californian. out of market." •TownNews, Moline, Ill.: Focusing chiefly on — Steve Yelvington, smaller markets, the company offers registration Morris Digital Works as part of an overall content management system. Clients include the Watertown (S.D.) Public Opinion and the Carroll County (Md.) "The one thing I fret about is that as an industry Times. we're operating without enough solid data on who our customers are, and registration alone •Clickshare Service Corp., Williamstown, won't get you there," Morris's Yelvington said. Mass.: Clickshare offers registration authentica- "It's important to keep in mind that registration tion services and electronic transaction billing. provides a picture of the people who've filled out Visitors who register on the site of a Clickshare forms, and it's not a picture of the people who client are automatically recognized by other actively use your site." site's within Clickshare's network. Clients include The Daily Hampshire Gazette To Yelvington, a one-time visitor from out of (Northampton, Mass.), Erie (Pa.) Times-News, state has little value to AugustaChronicle.com. Foster's Daily Democrat (Dover, NH). "The reality is that in a business sense, we're not interested in transient traffic from out of market. •eMeta Corp., New York: The digital asset man- In fact, we'd be fine if it went away. It's not ger- agement software provider focuses chiefly on mane to our site objectives." subscription- and transaction-based sites (such as access to NYTimes.com's archives), but it

12 © 2003 Newspaper Association of America. All rights reserved. digitaledge Instead, Yelvington is interested in learning as ics capabilities to its e-mail communications with much as he can about loyal customers. "One of readers. "By tying their systems together, they the key issues we have to confront in this indus- were the first online newspaper to do what I try is not only the total reach of our product but would call audience management," Morgan said. the frequency of use of our products," he said. "Monthly visitors are a different audience than Partly as an outgrowth of that effort, Morgan daily or weekly visitors." founded Tacoda in 2001 as a way for newspapers to interact with their audiences. Clients of its To identify active users and what they're doing audience management system include Advance online, several newspaper companies have turned Internet, Belo Interactive, the Chicago Sun- to outsourcing solutions from startup companies Times, Landmark Communications (for The that offer behavioral and usage analysis tools that Weather Channel), McClatchy, Media General, offer rich demographic insights about news site Tribune Interactive and USAToday.com. The sys- audiences when combined with registration data. tem tracks individual users' surfing pattern as a To date, Tacoda Systems has been one of the way to tell clients which pages and ads the visitor most aggressive audience-profiling evangelists. saw, how often he or she visits, as well as other CEO Morgan said that publishers often initially data. approach online registration from a product-cen- tric viewpoint. "They'll say, I want to control That information can be used by clients in two access to my valuable content," he said. "Our ways: view is that in an online world, the core asset of media publishers is their audience, not their con- •To serve targeted advertising — for example, by tent." identifying those who viewed sports or automotive content on a previous visit;

From the start, NYTimes.com •For analysis, offering answers to questions such tied its registration system to a as: do people who visit the travel section also real-time ad server and added like local news? analytics capabilities to its e- In one case, Belo Interactive's DallasNews.com mail communications with used Tacoda's audience targeting to serve ads for a Mitsubishi dealer to visitors who are currently readers. browsing the site's auto section, and to anyone who had visited the section in the previous 30 days. The result was a click-through rate of 7.7 Through Tacoda's products, clients can learn how percent and a 100 percent increase in credit appli- often visitors interact with ads, their loyalty in cations. Forty-four percent of all phone calls to returning to the site, and whether the company the dealership were attributed to the online cam- has sold them an online or print subscription. "It's paign, even though eight promotions were run- less about 'How are we managing the delivery of ning in other media. this online product?' and it's more about 'How are we managing this online relationship?' " he said. While some user predilections and demographic data can be inferred by tracking surfing habits, NYTimes.com hired Morgan's former startup, combining it with registration data — from the Real Media, in 1996 to help build its infrastruc- site's own registration system or Tacoda's new ture. From the start, the Times tied its registration registration offering — adds greater depth and system to a real-time ad server and added analyt- accuracy.

13 © 2003 Newspaper Association of America. All rights reserved. digitaledge "You can do Tacoda without registration, but Morgan said that by allowing clients to change you're only looking at the size of the audience registration data points on the fly, "a newspaper and mapping that to behaviors, and you don't site could say, 'A local automobile dealership know anything about the demographics of the wants to do a big program to target prospective readers," Yelvington of Morris said. "You don't SUV buyers by identifying households with chil- get the full bang for the buck until you wire the dren. We don't want to ask all of our registered two together." users for that, so we'll only ask people in certain ZIP codes or with certain characteristics, and we Fisk of Belo Interactive added, "We've overlaid can build a campaign around those profiles.' our database with Tacoda behavioral tracking on Presence of children in a household is really top of our registration information, so now I can important to auto dealers and grocery stores." track the visitation patterns of users on our site. We know not just where they're going but which Asking for an e-mail address should be a key audience segments are going there." component of almost any registration system, Morgan said. "It may be intrusive, but it's pay- Recognizing that behavioral tracking and regis- ment for the content," he said. An e-mail address tration data go hand in hand, Tacoda added a registration component to its audience management Asking for an e-mail address system in April 2003. Media General has deployed it across its network of 17 newspapers should be a key component of and broadcast Web sites, including the Richmond almost any registration Times-Dispatch and Tampa Bay Online, and The Toronto Star is currently installing Tacoda's audi- system. ence registration system, Morgan said.

Pricing of Tacoda's audience management system varies depending on the side of the media com- lets publishers ask users to opt in for commercial pany's audience. An enterprise software license e-mail offers. Forty percent of site registrants costs $200,000 to $600,000 up front with a 20 typically say yes. Collection of the e-mail address percent annual fee for maintenance and support; allows the site to contact the user for customer its ASP (application service provider) product, support issues, polls and other reasons. It gives hosted by Tacoda, costs $100,000 to $300,000. publishers the ability to match customer informa- The registration system costs $150,000 to tion against print subscription databases that con- $250,000 up front as a stand-alone product. tain e-mail addresses. And it establishes a higher level of loyalty and commitment, often leading to Tacoda's audience management system can hold more frequent visits to the site. hundreds of data points on each person, culled from different sources. One of its key selling Publishers often underestimate the revenue points is the ability to dynamically deliver differ- potential of commercial opt-in e-mail, Morgan ent registration questions to different people, said. The Dallas Morning News generated more Morgan said. AMS can dynamically deliver reg- than $1 million in e-mail revenue in the first year istration questions with registration systems other after registration. Tribune Interactive saw more than Tacoda's, assuming that they support incre- than $300,000 in incremental ad revenue in the mental registration (the ability to add one data year after it launched registration in Los Angeles point at a time on a dynamic basis), but it works and Chicago. best with Tacoda's registration system because of tight integration, he added.

14 © 2003 Newspaper Association of America. All rights reserved. digitaledge "We believe this will be an important way for media companies to become the trusted partner of the consumer," Morgan said. The initiative is sched- uled to go live within a year.

Targeting Mid-Size Markets

Nando Media, the technology arm of McClatchy, has become a leading vendor of registration and subscription services. Product manager Norm Cloutier outlined several approaches newspapers could take when registering users: an incentive-based rewards program, vertical silos that require registration for one area of a site, a process that allows access only to print subscribers, a mixed lockdown featur- ing varying levels of access for those who register or subscribe, and a threshold approach that requires registration after a user visits a certain number of pages.

Since August 2002, Nando has rolled startribune.com out its InSite registration product at the Star Tribune and The Bakersfield Californian, as well as subscription and fee-based services at other sites. Currently no site allows readers to opt out of targeted online display ads. "Publishers recognize Bakersfield.com introduced a fairly short regis- that if all you have to sell is undifferentiated eye- tration form in January 2003. "We told site users balls, there is no profitable business model for that registration was coming for over 30 days free content," Morgan said. prior to launching it to warm them up to the idea," said Darrell Kunken, vice president of But if users can't control the ads served to them, marketing and new media. they can have a voice in the personal information publishers keep on file. Morgan said trust and Bakersfield was able to marry online registration personal privacy are "a huge wildcard" in the reg- data with Experian market data, U.S. postal istration process. As a result, Tacoda has devised addresses and other customer files to create an a privacy management application that will soon impressive database of user profiles. The depth of let users log into a media site to see what person- the online data gave local advertisers a chance to al information is being stored about them. see what types of consumers were visiting the site. The detailed customer information persuad- ed a local Ford dealership to triple its advertising spending instead of canceling for the year.

"The most effective advertising is both relevant and requested by the consumer," said Nick Rogosienski vice president, interactive and direct marketing. "Our members indicate their interest by categories, and we make it easy for them to change their preferences when desired. Because the advertising information is coming from startribune.com at their request, it has the credi- bility and legitimacy that is lacking in the unsolicited e-mail communications so preva- lent today."

When registering or updating their accounts, Carrollcountytimes.com members of startribune.com can elect to receive newsletters generated by startri- In Minneapolis, which launched registration May bune.com staff and advertisers' offers via e-mail. 27, 2003, visitors can view the home page and one story without having to register. McClatchy will also likely add Nando's InSite Startribune.com was among the first newspaper registration to its Sacramento Bee, Anchorage sites to put registration in front of its classified Daily News and Tacoma News Tribune Web sites section and among the first to get sponsors for toward the end of 2003 and into 2004, said Kathy opt-in marketing messages in such categories as Ives, sales and marketing manager for Nando travel, finance, automotive and entertainment. Media. People who register for a category receive an e- mail under the startribune.com brand that con- Catering to the Smaller Markets tains the solo offer from the category's sponsor. The use of category sponsorship also has allowed Software costs and the resources required to ana- startribune.com to begin immediately generating lyze the data and respond to customer questions revenue from the registration process. An innova- make it clear that registration may be difficult to tor in direct marketing, The Star Tribune takes an implement at some newspapers. Tim integrated approach to its traditional mail and e- Archambault of the Bangor (Maine) Daily News

16 © 2003 Newspaper Association of America. All rights reserved. digitaledge had this word of warning for mid-size and small- the Carroll County Times in Westminster, Md., er papers considering registration: "If you're not he said. going to do it to make money, then don't do it because the time commitment is huge. It's yet to The Public Opinion has been using TownNews be seen if smaller markets have much to gain since July 2002 to sign up its 8,814 registered from it." users. Registered users may access the site's local news, sports, obituaries and archives. He said that online papers like DallasNews.com stand to gain from registration, but smaller papers The Carroll County Times (morning, 24,203) face a much more difficult challenge. When seg- uses registration to gauge who is reading the menting 120,000 bangornews.com registered paper online instead of in print. "Then they can users, Archambault can only deliver a few hun- go to an advertiser and say, 'We have x number of dred readers to any given advertiser. "The possi- print readers and y number of Web readers who bilities are not as exciting," he says. live within a half hour of your store. Here's a joint print-Web campaign that makes sense for you,' " TownNews of Moline, Ill., caters to mostly small Wilson said. and mid-size newspaper companies by offering registration as part of an overall content manage- Some 11,000 people have registered at carroll- ment system. The company, 80 percent owned by county.com since registration took effect in July. Lee Enterprises, hosts more than 800 newspaper "We initiated this to begin to let our online users sites on its server farm. realize that information on our Web site is unique and is not totally free," said publisher Robin Saul. CEO Marc Wilson said online newspapers work "Long term, we would like to establish a fee- with TownNews for user access control during based access, one that's free to our newspaper registration, subscription services, archives pay- subscribers." ments and e-commerce. A third paper, the Somerset (Pa.) Daily American, "We typically serve smaller papers and the abandoned a paid subscription model in May in demand for registration is smaller there because favor of one that entices readers with free news they're understaffed and overworked and they content for all readers and access to the entire don't need extra projects," Wilson said. "I tell site, including obituaries and other popular sec- publishers, unless you have a plan for how you tions, for print subscribers (about 14,000) and want to use the data, don't do it. Don't annoy your online-only subscribers (more than 100). customers unless you commit the staff and the time to analyze the information you've gathered." The database of 14,000-plus registered users may eventually be used to solicit additional advertis- TownNews typically charges a $100 setup fee ing. and $75 per month to run its registration software. The company doesn't provide analysis of One little-noticed advantage of registration, registration data or site traffic, but does allow Wilson said, is that after someone fills out the Web managers to view data in Microsoft Access registration form, a newspaper has 90 days to or Excel spreadsheets so they can analyze the solicit a subscription without violating federal level of interest in a story or section by audience do-not-call regulations. One strategy at Lee segment, Wilson said. Enterprises is to offer a free two-week subscription in return for providing registration data, he Two papers that are making use of registration added. data are the Watertown (S.D.) Public Opinion and

17 © 2003 Newspaper Association of America. All rights reserved. digitaledge Looking ahead, Wilson foresees greater use of Belo Interactive is in discussions with another registration data in newspapers' Web advertising company about deploying its registration and campaigns. "We believe that the online newspa- customer service solutions externally. And per is often the No. 1 electronic local medium in Morris Digital Works developed a "registration a trade area, with the online news site being read lite" system that it rolled out Oct. 9, 2003, to con- by as many people as are listening to the local trol reader access to the Web site of The Post and radio station or watching local TV stations," he Courier in Charleston, S.C. The newspaper is said. "Registration data about your local readers owned by the Evening Post Publishing Co. That gives you a leg up when competing for ad dol- registration solution will likely be offered to oth- lars." ers as a commercial product, Yelvington said, while a more far-reaching unified publishing sys- Other Registration Options tem across the Morris network will remain inter- nal for the foreseeable future. Two newspaper companies have begun to offer registration technology to other media companies as a commercial product.

Best practices:

•Registration does not make sense in all markets. Identify the tangible benefits you hope to realize and weigh the advantages and disadvantages before making the leap.

•Don't follow the registration herd — especially if you're in a smaller market — unless you have the resources to analyze and act on the data you gather.

•Consider flexibility before committing to a particular registration system.

•Overlaying behavior tracking with registration data can provide a powerful means of learning the nature of your online readership.

In a medium where profitability remains elusive Latimes.com also recently sent out an e-mail ad for many content sites, registration offers a wel- message promoting water conservation on behalf come path to new revenue streams, particularly of the Metropolitan Water District. The site was from e-mail marketing and targeted advertising. able to send it only to users ages 35 to 64 with Instead of approaching advertisers with the fuzzy higher incomes in the Los Angeles DMA. math of anonymous users and page views, sales reps can use registration data to discuss their cus- Another e-mail message targeted Los Angeles tomers in demographic terms that advertisers can residents on behalf of vegas.com, a portal for Las appreciate. Vegas hotels and shows. A fourth ad mail, bought by the San Luis Obispo Tourism Board, targeted "We had reached the point where it was becom- Southern California women to visit the Central ing clear that simply having a large volume of California coast. The advertisers craft the body of anonymous visitors wasn't very valuable," said such e-mail messages, while latimes.com handles Elaine Zinngrabe of latimes.com. "We wanted to the distribution and inserts a tagline at the bottom have the ability to offer targeted advertising, and with contact information and removal instrutions. to generally know more about who was coming to the site in order to make decisions about what "The CPMs are much higher than you sell a ban- to offer our users." By combining registration ner for," Stokley said, "yet for the advertiser it's data with traffic analysis, latimes.com learned more cost-effective than purchasing a solo mailer that 35 percent of its readers live in its core themselves." Southern California market. "It was becoming clear that Registration has been particularly beneficial to latimes.com's ad mail program, says Donna simply having a large vol- Stokley, director of online advertising sales, West ume of anonymous visitors Coast and latimes.com, Tribune Interactive. wasn't very valuable." Users who register provide e-mail addresses, ZIP code, age and income, and they automatically — Elaine Zinngrabe, agree to accept ad messages under the strictures latimes.com set down by Tribune Interactive. "We can parse any of these fields and go out to our advertisers," she said. "For us, ad mail has generated a whole new revenue stream." Online display ad targeting, made possible through registration, has also enhanced site rev- Latimes.com sent out an e-mail offer on behalf of enues, Stokley said. An airline wanted to adver- the agency sponsoring the theatrical show "The tise additional flights to the South and was able to Producers" to women in the greater Los Angeles target readers in Southern California. area between ages 25 and 54 who earn more than Registration enabled the site to serve ads only to $50,000. The special offer for a dinner and show latimes.com readers who live in Southern was opened by 24 percent of recipients, and 61 California rather than the two-thirds of readers to percent of them clicked through to purchase tick- whom the ad would serve no benefit, Stokley ets, Stokley said. said.

19 © 2003 Newspaper Association of America. All rights reserved. digitaledge At ChicagoTribune.com, another Tribune "These new programs have been enormously well Interactive site, Rebecca Baldwin said registra- received by advertisers," Lavington said. tion has led to several advertising success stories. In June 2003, a targeted ad campaign on the site Tacoda software tracks the surfing behavior of resulted in significantly higher sales of pianos. USAToday.com users and drops a cookie on them Similarly, a continuing education program using when they visit section fronts and other pages. targeted ads proved so successful that it crashed Tacoda is also the engine that serves them the tar- the client's servers, Baldwin said. geted ads.

"The e-mail programs that have proven most suc- Using gender, age, ZIP code and household cessful have been those that offer a benefit to the income together with behavioral activity on the user, such as discounts to a show coming to site, USAToday.com created seven prepackaged town," she said. Lifestyle promotions, such as gift segments of its most valuable readers: E-fluen- certificates to a day spa, have been particularly tials (people who've read a tech review in the past successful. 30 days), Lookers and Bookers (readers who visited the travel section in the past 30 days), Bulls Baldwin acknowledged that Tribune Interactive and Bears (self-directed investors), Armchair has been criticized for its "interesting and contro- Athletes (male sports fans), Tire-Kickers (auto versial way" in which readers are forced to accept buyers) and two demographic categories based marketing promotions as a condition of registra- on self-reported data: women and affluent house- tion. There is no way to opt out of e-mail market- holds. ing from Tribune and its partners during the registration process — other than to not register. Baldwin said fewer than 2 percent of registered users have lodged complains, and "the rate has been so small it hasn't forced us to change the policy."

For USAToday.com, registration opened up entirely new advertising opportunities. The site's readership skews 75 percent male and 25 percent female, similar to USA Today's print readership. The newspaper depends heavily on business travelers. "Because we were so heavily skewed male, in the past we had a tough time getting ad dollars from advertisers looking for a female audience," said Susan Lavington, director of marketing at USAToday.com. "Today we're going back to those same advertisers and saying, 'Now we can Latimes.com e-mail ad message serve your ads only to women.' "

Based on both registration data and behavioral Elsewhere,Washingtonpost.Newsweek tracking information, USAToday.com sales reps Interactive would not release the specifics of are approaching Ford, Chrysler and other auto company revenue related to registration. "In gen- manufacturers and telling them they can target eral, we have seen strong advertiser demand for ads at any user who read a car review in the past targeting based on our registration data, and we 30 days along with their location, age and gender. are able to charge a premium for such cam-

Two Big Success Stories

Executives from several other newspaper companies said it's hard to identify precise revenue increases attributable to registration, but that registration has proved to be a key factor in their robust online revenues. Heading the list of those success stories are two registration pioneers, The New York Times on the Web and Belo Interactive.

NYTimes.com credits targeted advertising, based on registration data it has collected since 1996, as a primary driver of its continued profitability. "For years we were the only significant NYTimes.com ticketwatch place around that gave advertisers the ability to target users based on their registration data," said Deputy General Manager Stephen Newman. with a maximum of five pages. Users can be targeted based on the pages they've visited in the Registration data gives the Times increased flex- past. "An advertiser could hit people who fit a ibility in how it delivers targeted ads certain profile if they've visited the health sec- (http://www.nytimes.com/adinfo/web_target- tion, so the next time they visit they may see a ing.html). An advertiser might come to the paper series of ads regardless of where they start on the with a request to reach online readers in certain site," Newman said. Recent Surround Session ZIP codes. A financial company might want to advertisers include American Airlines, Audi, limit an advertising campaign to the New York FedEx, IBM, Porsche, Verizon and Visa. area, or a clothing retailer might want to target women under age 35. NYTimes.com can target "Because it is a gateway that everyone must pass not only by demographic data but by behavior on through, registration has become an amazing way the site. to build e-mail lists and promote new products," Newman said. The site's Today's Headlines The Times has identified a half-dozen groups that newsletter has nearly 4 million subscribers, and advertisers may choose to target in such cate- "registration has played a big part in building gories as business, health, retail and travel. For that." example, the site looks at users who frequently visit the health section, an attractive audience for Registration has also inspired a number of e-mail pharmaceutical advertisers, Newman said. An marketing promotions. The producers of the advertiser may want to create a campaign via a musical "Chicago," for example, may offer price health-related e-mail newsletter or initiate a discounts to upcoming shows in the Times' Surround Session campaign on the site. TicketWatch e-mail, which goes out to more than 350,000 subscribers. A cruise line may offer spe- Surround Sessions allows an advertiser to serve a cials in a travel newsletter that has close to series of ads to a user as he or she steps through 500,000 subscribers. the site from page to page or section to section,

21 © 2003 Newspaper Association of America. All rights reserved. digitaledge In some targeted ad campaigns on the Belo sites, behavioral campaigns directed at specific audience groups outperformed ROS ad campaigns by a four-to-one ratio.

But the most tangible benefit of registration has come in the form of e-mail marketing, which opened up a new revenue stream for the 24 Belo Interactive sites. During registration, users are asked a series of questions about their hobbies and interests, as well as whether they would like to receive offers related to the subjects they list- ed.

Some 30 percent of registered users — more than 1.1 million people — have agreed to receive MySpecialsDirect, a permission-based e-mail product. Under the program, Belo's sales staff MySpecialsDirect approaches advertisers with a proposal to target segments of the readership. "We'll say, we have 150,000 people who are interested in travel. New York Times Digital's advertising revenue Would you like to send them a deal or coupon or during the third quarter of 2003 increased 25 per- discount in connection with your message?" Fisk cent compared with the same period in 2002. said. Advertising revenue for the first nine months of 2003 improved 29 percent. Total revenue The program has been "wildly successful," she climbed to $21.8 million during the third quarter said. Some mailings led to open rates as high as (+19.7 percent), and year-to-date revenue grew to 92 percent and click-through rates as impressive $63 million (+20.9 percent). (The Times does not as 32 percent. AT&T Broadband did a campaign break out revenue by Web site, so these figures through My Specials Direct for high-speed cable are for NYTimes.com, Boston.com and an Internet. In one mailing they generated more than archive distribution business.) 1,300 new customers. While Belo won't turn over its registrants' e-mails to an advertising partner, it Belo Interactive has also reaped the whirlwind does allow cable companies to target users in spe- of registration. Dave Morgan of Tacoda Systems cific neighborhoods where they are rolling out said, "Belo probably has the most successful new services. implementation of any registration system in the world." In another campaign, the Dallas Symphony targeted users who said they were interested in While ad sales have increased dramatically quar- music and entertainment and had a higher than ter after quarter, Linda Fisk said it's difficult to average income level. Some 45 percent of the determine how much of that success can be people who received the e-mail offer bought a attributed to registration data. "The sales force ticket to the symphony. appreciates being able to talk to advertisers in a more sophisticated way about our audience and "We've become really good at targeting specific the people viewing their advertising," she said. audiences to specific advertisers," Fisk said. "We delivered a perfect audience for the Dallas

22 © 2003 Newspaper Association of America. All rights reserved. digitaledge Symphony. The effectiveness rate of our e-mail a young demographic, "ultimately they want campaigns has been just amazing." everyone to come into their store. One of our customers is a pest control company and it's hard to The e-mail categories with the highest level of see how targeting would help his business." interest so far have been entertainment and movies, sports, music, travel and cooking, Fisk Site managers decided not to merge said. SignOnSanDiego.com's new registration database with its existing e-mail newsletter database, Jumping on the Revenue Bandwagon which contains 200,000 subscribers. "With registration we're registering computers, and with e- Given the revenue gains that some sites have seen mail we're tracking individuals," Jennewein said. as a result of registration, other newspaper com- "A person might be comfortable giving out an e- panies are following close behind. mail address in return for receiving a newsletter or even e-mail from third parties, but he might be Cox Newspapers plans to introduce registration uncomfortable with an expansion of that if his at its network of online properties beginning in browser is targeted." the first quarter of 2004 with the Austin American-Statesman, to be followed by AJC.com As one indication of readers' privacy concerns, (the Atlanta Journal-Constitution site). And if Jennewein and others cited the preponderance of imitation is the sincerest form of flattery, Belo registered users who live in the 90210 ZIP code should be mighty flattered. Cox is asking users to or at 1600 Pennsylvania Avenue. supply a name, phone, address, e-mail, gender, birth date and 10 areas of interest. Morris Digital Works' Yelvington said registration also opens the door to other revenue streams "We've had consultations with Dallas and decid- such as persistent search. A user who registers ed to follow their lead in taking a more aggres- can enter a keyword in a Morris paper's classified sive approach," said Michael Parker, vice presi- and display advertising database and will be dent of Internet strategy and solutions, Cox alerted by e-mail when the item becomes avail- Newspapers. "We see a big opportunity for mov- able. ing into targeted advertising and developing new products based on interests from our online "If someone is looking at used cars in the online users." classifieds, they're probably looking to buy a car," Yelvington said. "If I can cross-reference Azcentral.com has been profitable for two years, that with demographic information, then I can said Mike Coleman, but registration gave the site find 25- to 34-year-old female car seekers who a way to stabilize retail revenues by serving ads live in the 30809 ZIP code. Now I've got an inter- more effectively. "A client can now come to us esting proposition for a car dealer, if I can use and say, 'I'm opening a new women's health club that information to target an ad to that and only on the west side of Phoenix and want to reach that audience." females 35 or older in these 20 ZIP codes,' and we'll be able to deliver that audience," he said.

In San Diego, Chris Jennewein said he welcomes targeted advertising but cautions, "the local advertisers haven't been clamoring for that." He said local merchants are interested in broad expo- sure and, while they may market more heavily to

•Gathering registration data such as age, income and field of employment allows you to target readers who permit e-mail advertising offers. Such ready-made demographic groupings are especially appealing to advertisers.

•Offer readers tailored ad messages that carry a tangible benefit or reward.

•Turn a potential negative (only 25 percent of your site's readers are women) into a strength (you can limit your ad campaign only to them) by demonstrating the ability to successfully target such groups.

•Nothing succeeds like success. Gather success stories from a targeted marketing campaign to entice future advertisers.

Benefits to the Newspaper Enterprise Beyond Advertising

Knowing your audience and increasing rev- segment the audience geographically "to enues are the twin driving forces behind reg- automatically serve our deep local content istration for many Web managers. Many and advertising to users in each market. " other benefits can also be realized from the wealth of customer data provided from reg- Michael Q. Parker at Cox Newspapers istration databases. Chief among them: prod- named three areas outside of advertising in uct development, especially new e-mail which the company believes it can capitalize offerings and Web site functionality; editori- on registration data: "In editorial, registra- al programs, both online and in print; more tion gives us the ability to see what our audi- opportunities to upsell the print product to ence is interested in and allows us to devote online users; and better customer service. resources to those interests, whether it's a new gardening section or a gardening e- Kelly Dyer, general manager of mail," Parker said. "Likewise, we see the NewsOK.com, offered yet another potential data providing us with a pool of people we benefit: Through the collection of e-mail can draw upon for marketing research when addresses, phone numbers and ZIP codes we do usability studies. For example, we from users, "our staff will be able to e-mail might send them prototypes of a new gar- people from all over the area for trend stories dening section. And from a circulation stand- we're reporting. And when a breaking story point, it can help us better understand the occurs, we'll have an available pool of peo- relationship between our print and online ple available, zone by zone, and we can ask audiences." them if they want to comment." At the New York Times on the Web, regis- At Advance Internet sites such as tration has always informed online product MLive.com in Michigan, registration goes initiatives, said Stephen Newman. That hand in hand with the "hyperlocal content comes in handy when building out enhanced that is the primary strength" of the sites, said content that targets men or women in a cer- president Jeff Jarvis. In addition to targeted tain industry. advertising, registration allows the editors to

24 © 2003 Newspaper Association of America. All rights reserved. digitaledge "As we build out our new movies vertical, [email protected], we make decisions about where to take it based on what we know about the profile of our movies audience — are they higher income, do they skew male or female, how are they dispersed geographically?" he said.

Barbara Rice, New York Times Digital's group director of research, told me in 2002: "The data helps inform content decisions, such as whether to add to the current stew of video and audio on the site, which now includes a photographers journal, cooking demos, movie clips, audio NYTimes.com movies reports from baseball beat reporters and other features. We're examining the resources we want to commit to multimedia, so this morning we pulled registration data on which audiences are Yelvington of Digital Morris Works also men- the most loyal users of multimedia. The editorial tioned registration as an invaluable tool in mar- side likes to know who's reading what articles keting the print product to non-subscribers. "One and packages. Are stories being read by a New of our key objectives with registration is devel- York City audience or international audience?" oping a coherent view of who our customers are that will help us not only know the difference Several newspapers are using registration data between online and offline users but hopefully to about customers' media habits to try to lure new convert online users into offline users. This is subscribers. The Dallas Morning News delivers potentially a great boon to newspaper circulation targeted home-delivery offers to departments." DallasNews.com visitors in the distribution area who don't subscribe to the paper. One e-mail Belo Interactive executives see registration as the campaign targeted 130,000 non-newspaper sub- starting point that informs personalization efforts scribers. Twenty-four percent of the delivered and other content initiatives. messages were opened by recipients, and the paper gained 44 subscribers, Linda Fisk said. Khou.com, one of Belo Interactive TV station sites, will be among the first to introduce the ini- Belo Interactive maximizes the ability to test dif- tiatives. "We're rolling out additional personal- ferent marketing messages with its e-mail cam- ization features that allows people to choose the paigns. In July 2003, the company created three type size and color palette," Fisk said. "Soon distinct messages for MySpecialsDirect sub- they'll be able to tell us the kinds of information scribers in The Dallas Morning News circulation they want to see highlighted on the home page." area. The e-mail recipients, none of which had a Those personalization preferences are tied to the home-delivery subscription, were split into three user's registration profile. groups of about 55,000 each, Fisk said. Within 24 hours, 45 people accepted a 12-month print sub- The Belo sites' use of 16 hobby and lifestyle- scription, 14 took the 24-month offer, and six based questions in the registration process helped signed up for the 36-month offer. The campaign the product development team determine which led to 108 new subscriptions. Belo Interactive areas to devote more resources to, Fisk said. "We does not charge The Dallas Morning News to found out through registration that we have a deliver messages to MySpecialsDirect sub- great number of automobile buffs. We initially scribers. thought that having an automotive classified

25 © 2003 Newspaper Association of America. All rights reserved. digitaledge one of our sites has a relevant, valuable experience," Fisk said. "The best way to do that is to tailor their experience to them. And the Internet is the only medium that can really do that. No other media can match its relevance, immediacy and personalization."

Parker of Cox Newspapers said he'll be interested to see the level of reader interest in customized content. "I'm not sure how much the audience wants a more refined personalization of the product," he said. "If people say they're very interest- DallasNews.com autos ed in these subjects and would like customization not only of the content but of delivery times for newsletter e-mails, that's something we'll be section would suffice, but a lot of readers love watching." digging into content about cars, and so we added a number of columns and built out the automotive Morris' Yelvington said that one overarching ben- section pretty dramatically." efit of registration will be the tying together of disparate customer databases inside a newspaper Registration also gives Belo's content teams a company. Currently, the registration system for better idea of what users care about so that e-mail AugustaChronicle.com is not integrated with the newsletters can be tailored to their interests, she access control system for its archive product, said. AugustaArchives.com. "Our vision is for one account for all services in a given market. We "We really believe deeply in the idea of a cus- want to have one view of the customer," he said. tomizable and personalized Web site experience, "Right now our reality is a little different from and we're trying to ensure that everyone who uses that."

Best practices:

•Registration gives newspapers an opportunity to capture a subscriber relationship. An e-mail address can be a powerful tool.

•If local news is a strong component of your site, registration permits the delivery of more "hyperlocal" content online.

•Solicit registered users' input on prototypes of a new section, a site redesign or a newsletter that's still being formulated.

•Registration enhances the ability of a news site to offer more relevant, personalized material.

When online managers weigh the ramifications sell products or to share with advertising partners of registration, few realize the plethora of legal are established in the site's privacy policy. and regulatory issues that it presents. Privacy, Freeman said a link to the policy should be promi- confidentiality of personal data, spam and per- nently displayed on the site's home page and on the mission-based marketing all fall under the head- registration page in close proximity to the user's e- ing of: Proceed with caution. mail address, if that is part of the registration form.

"We are facing a whole new set of legal issues "Newspapers need to think about several things," related to data collection," said Elaine Zinngrabe said Freeman, who specializes in privacy and of latimes.com. "I wouldn't say this is a down- information security. "Are we going to allow our side, so much as something to keep on top of. At advertisers to learn anything about the success of a newspaper there are a lot of points of consumer their online or e-mail campaigns? Are we going to data collection, and it's important to keeping use cookies or Web bugs on our site? Are we going track of what promises were made when differ- to allow a partner to run a campaign for us? You ent pieces were collected. It gets complex." want to figure out who's going to get the information, how each party will use it, and you want to Managers of online news departments should be disclose all that." aware that collecting customers' private, identifi- able data as part of a registration system can For some choices, the smart thing to do is to ask open up a host of legal issues, according to D. the customer for opt-in permission. "The world is Reed Freeman Jr., a partner in the firm of Collier moving to opt in, both from a marketplace and leg- Shannon Scott PLLC in Washington, D.C., and a islative standpoint," he said. "If you want to send leading expert in the field. newsletters or e-mail marketing messages, you'll want to have them opt in." "My single most important piece of advice is for companies to think broadly and develop a regis- The Tribune Co. has been the target of some criti- tration system that lets you set your own ground cism for not allowing users to opt out of online rules and gives you wide latitude," Freeman said. advertising or marketing messages when they reg- While there are no laws that govern how regis- ister at sites such as chicagotribune.com and tration must be done, a news site must abide by latimes.com. Freeman wouldn't comment on the the rules it sets down. wisdom of that approach but said that not giving users the opportunity to opt out could have legal A publisher wants to obtain the broadest possible ramifications if not done carefully. array of contractual rights "that you feel comfortable asking for," Freeman said. The respons- He noted that two new anti-spam laws in es should be gathered at the time of registration. California could open news sites up to legal expo- Experience shows that publishers are much more sure if the user does not provide informed consent. likely to get customers to accede to the site's Under the e-mail marketing law, SB 186, a news- request up front rather than circling back later to paper that sends out an e-mail newsletter must ask for permission, he said. receive the user's consent not only for the newsletter but for any advertising in it as well. "The law Generally speaking, details that determine how suggests that the advertiser needs permission to be the publisher may use customer data to market or included in the e-mail," Freeman said.

27 © 2003 Newspaper Association of America. All rights reserved. digitaledge "Registration systems need to be rebuilt to com- by the Network Advertising Initiative, a self-reg- ply with that requirement." ulating body of online publishers. He said publishers that adhere to the rules set down at the The second law, SB 27, says that if a company is (http://www.networkadvertising.org/) NAI site going to share its customers' personal informa- will steer clear of trouble. tion with other organizations for direct marketing purposes, the company that owns the names has to tell requesting consumers what the information was and with whom it was shared. A link to the Web site's privacy policy should be prominently Class-action attorneys looking for an inviting tar- displayed on the home page get may eye a media company that runs afoul of these new laws, Freeman said. and on the registration page.

"California's laws are far and away the most aggressive right now," he said. Solicitous customer service is another way to Federal legislation to reduce spam is expected to head off problems, he said. "Regulators don't preempt existing laws and California's SB 186, come up with cases to bring out of thin air. They which would take effect on January 1, 2004. The monitor complaints, and [publishers'] customer CAN-SPAM Act of 2003, passed by the House service [departments] should carefully monitor and Senate in December 2003, requires that bulk customers' concerns and complaints — and deal e-mail senders integrate "opt-out" features within with them with an attitude of whatever it takes. the text of commercial messages, identify the Once a consumer goes to a regulatory body, it's mail as a commercial message and label all sexu- too late." ally oriented messages. Of great importance to publishers, a provision of the CAN-SPAM Act Freeman says the "mythological working allows companies that have an existing relation- assumption" of U.S. regulators is that everyone ship with consumers to continue to deliver mes- reads and relies upon a site's privacy policy when sages. Recipients can request to be dropped from they provide their personal information. With the mailing list. Spammers can face millions of that as a protective backdrop for media compa- dollars in fines. nies, he said, "the privacy policy is your chance to write your own federal and state law. So there's In addition to the new e-mail regulations, pub- no excuse for not living up to it." lishers should create policies about cookies, the well-known tiny data files that recognize a To Freeman's knowledge, government agencies returning customer, and Web bugs, which range such as the Federal Trade Commission have not from the benign to the pernicious. Newspaper lodged any complaints against online news sites companies such as Belo Interactive and Tribune over violations of consumers' personal informa- Interactive use Web bugs to track how many tion. "So newspaper publishers must be doing a users open a marketing e-mail and click through good job," he said. a link, while vendors such as Tacoda use tracking technologies to observe a user's behavior from When putting together a registration program and page to page. privacy policy, the legal department should lead the initiative, but it must also involve the man- Freeman said Web bugs can be useful as long as agers who touch the data, Freeman said. "The their use complies with the guidelines set down best thing you can do is take off your legal and

28 © 2003 Newspaper Association of America. All rights reserved. digitaledge marketing hats and think about how your activi- relationship with a customer, and it requires a ties will be received by consumers," he said. constant watch on privacy law developments."

Annie Loftus, a technology analyst with Some users may also react differently to targeted Technical Solutions LLC, a newspaper consul- advertising, she said. Many customers who pro- tancy with ties to NAA, said that users vary wide- vide a birthday and a ZIP code are unaware that, ly in their concerns about privacy. "Some are on average, about eight people with the same delighted at personal greetings and custom serv- birthday live in each ZIP code. Given the year of ices," she said. "Others are surprised and offend- birth in addition to the birthday, a media compa- ed at how much is known or guessed about them. ny has a fair chance of uniquely identifying the Sometimes the same user responds differently to individual. different sites. A long-term customer relationship involves trust, especially online, and invading the "Newspapers stand to lose a lot if customers find privacy of your customers is a sure way to lose out they have been tracked in ways that they did- their trust." n't expect," Loftus said. "If the customer finds out she is being served different pages than other Some corporate policies that may be perfectly people, she may or may not see that as a benefit. legal — such as a universal mandatory opt-in for If the data is incorrect, or the aggregate data e-mail marketing messages — might not be a doesn't apply, the advertising may be totally mis- sound business practice, Loftus said. guided. Perhaps a spouse's surfing behavior at home gets inadvertently tied to an account used at "An opt-in policy, where the user must select the work. Perhaps a work ZIP code links a person to option to receive more information, is a way to the wrong salary range. This type of pitfall is pre-select the best sales leads from your visitors," more likely if the customer is not involved in the she said. "It makes more sense to find people who customization process and could void its bene- want more information about your products and fits." market to them. Chasing people who hate to be bothered is a lousy way to start a long-term

Best practices:

•Respect users' privacy rights.

•Post a privacy policy on your site, with prominent links on the home page and registration page.

•Involve new media managers and the legal department in the drafting of the privacy policy.

•Make it clear and understandable to lay readers. Have an editor rewrite the legalese.

•Be upfront and let users know how their personal information will and will not be used.

In 2001, a Borrell & Associates report called for ready to do the type of targeting being pushed by an alliance of newspaper sites to use a single solutions like Tacoda, Revenue Science and sign-on, one-account, one-registration technolo- AlmondNet — and also pay the premium gy known as an e-wallet to build a uniform trans- required with the use of that kind of technology." action standard and create a nationwide databank of customers. That never materialized, with During the next few years, online newspapers online newspapers taking a balkanized approach will continue to fine-tune their registration to registration outside of their corporate net- efforts. Elaine Zinngrabe of latimes.com spoke works. for many when she said, "Hopefully going for- ward, registration will be less of a burden on the Beyond newspapers, Microsoft Corp. and the consumer and more of a tool that we jointly use Sun Microsystems-led Liberty Alliance have to better tailor advertising and editorial." introduced competing systems that allow for Web users to register once and then have access to a During fall 2003, the Jerusalem Post Online network of affiliated sites. Perhaps a nationwide Edition removed registration as a requirement for registration solution will be found one day for users who want to access to "Latest News," the newspapers. most popular section of the site. The site's executive editor, Alan Abbey, told a reporter that the Until then, it's likely we'll continue to see hit-and- change was made to funnel more readers toward miss experiments in registration, followed by the editorials, columnists and op-ed pieces, all of mass adoption of the most successful practices. which still require registration. The Jerusalem While registration appears to be a successful Post counts about 300,000 registered users, 70 strategy for many sites, the one certainty is that percent of them from the United States and what works in some markets may not work in Canada. others.

Many sites concentrate too heavily on recruiting The Jerusalem Post counts new registrants, said Charlene Li, principal analyst at Forrester Research. "My conclusion is that about 300,000 registered most sites don't handle registration very well — users, 70 percent of them from they focus on serving new registering users but the United States and Canada. not necessarily serving returning users, who are their most valuable customers."

She noted that newspapers' approaches to regis- The question of whether to give readers direct tration vary widely, from washingtonpost.com's access to their personal data will soon begin minimalist technique to the detailed process at appearing on newspapers' radar screens. Linda Belo Interactive or latimes.com. "But a bigger Fisk of Belo Interactive said that by January 2004 problem," Li said, "is actually doing something the company plans to launch the next generation with the results. Few of the sites are in a position of customization and personalization across the to monetize the information they collect. There's network in a section called Member Center. also a question about whether marketers are

30 © 2003 Newspaper Association of America. All rights reserved. digitaledge Users will be able to change their profiles, update As described throughout the report, each visitor's their registration data, customize their Web site e-mail address represents a critical marketing experience, and opt into and out of newsletters touchpoint. As salespeople become more knowl- and e-mail marketing products — all in one area. edgeable and advertisers more receptive to targeting enabled by registration, both groups will At NYTimes.com, Stephen Newman doesn't press for more details about the audience. foresee any significant near-term changes in the site's use of registration data. "We feel we're right Those who are just entering the registration game where we want to be. There's a danger in trying see the potential for spillover benefits to the to do too much, to hypersegment the audience newspaper industry as a whole. Yelvington, who down to a granular level where it becomes costly said he wished Morris had moved faster into and confusing," Newman said. "A lot of compa- realm of registration, issued this sobering call to nies have tried customization with only limited arms: success. I'm not so certain that's the way to go." Instead, NYTimes.com will continue to use reg- "I believe that the single most critical issue facing istration to focus on its corporate goals of brand the entire newspaper industry today is the poten- extension, knowing who the audience is, tracking tially fatal inability to connect with people in the site's international audience, and providing younger demographic categories. If you look at more relevant targeted advertising. the drop-off in print product consumption below age 35, it's precipitous and frightening. From an "I really need to take the pulse editorial and product development point of view, I really need to take the pulse of the online audi- of the online audience and ence and understand the behaviors of different understand the behaviors of age groups so that I can craft products that will different age groups." hopefully win back some of that lost audience. And without registration, I'm guessing. I'm shoot- — Steve Yelvington, ing in the dark. I'm just obsessed by this under-35 Morris Digital Works problem. In the next decade this whole industry will be deeply troubled if we don't come up with new products that win back that audience."

Publishers that began the registration process by introducing a three-question survey — e.g. the smallest impediment to customers' site access — likely will request more information.

The Digital Edge and NAA offer more information about online registration.

A compilation of Digital Edge and Presstime articles dating back to 2001 is available here: http://www.digitaledge.org/registration.html.

For details about sites that require registration, examples of user levels and registration strategy, visit http://www.naa.org/feds/onlineresource/onlinereg.cfm.

In May 2003, NAA hosted two Web-based educational sessions about registration models and revenue applications hosted by Nando Media's Norm Cloutier and Belo Interactive's Linda Fisk. To purchase archival access to the sessions, visit http://www.naauniversity.org. Access to the Webinars will be available starting in February 2004.

Still seeking more registration advice and examples? If you are interested in participat- ing in a NAA e-forum dedicated to registration, send an e-mail message to Rob Runett, [email protected].

Tim Archambault, online services manager, Bangor (Maine) Daily News/Bangornews.com, [email protected], 207.990.8034.

Rebecca Baldwin, director of product development, Tribune Interactive, [email protected], 312.222.4503.

Norm Cloutier, product manager, Nando Media, [email protected], 919.829.4858.

Mike Coleman, senior manager of digital media, The Arizona Republic, mcole- [email protected], 602.444.8074.

Kelly Dyer, general manager, NewsOK.com, [email protected], 405.475.3979.

Linda Fisk, vice president, audience development and management, Belo Interactive, [email protected], 214.977.4017

D. Reed Freeman Jr., partner, Collier Shannon Scott PLLC, rfreeman@colliershan- non.com, 202.342.8400

Kathy Ives, sales and marketing manager, Nando Media, [email protected], 919.861.1207.

Jeff Jarvis, president, Advance Internet, [email protected], 201.459.2850.

Chris Jennewein, director of Internet operations, The Union-Tribune Publishing Co., [email protected], 619.718.5285.

Darrell Kunken, vice president of strategic marketing and interactive media, The Bakersfield Californian, [email protected], 661.395.7201

Susan Lavington, director of marketing, USAToday.com, [email protected], 703.854.3498.

Charlene Li, principal analyst, Forrester Research, [email protected], 415.848.1319.

Annie Loftus, technology analyst, Technical Solutions LLC, [email protected], 703.902.1904.

Don Marshall, director of communications, Washingtonpost.Newsweek Interactive, [email protected], 703.469.2721.

Dave Morgan, CEO, Tacoda Systems, [email protected], 646.674.2728.

Michael Parker, vice president of Internet strategy and solutions, Cox Newspapers, [email protected], 678.645.4033.

Dipik Rai, senior business manager for registration, Knight Ridder Digital, [email protected].

Mark S. Roby, publisher, Watertown (S.D.) Public Opinion, [email protected], 605.886.6901 x134

Nick Rogosienski, vice president, interactive and direct marketing, Star Tribune, Minneapolis, [email protected], 612.673.7749.

Robin Saul, publisher, Carroll County (Md.) Times, [email protected], 410.857.7870.

Kathy Schwartz, new media manager, NashuaTelegraph.com, [email protected], 603.594.6458.

Donna Stokley, director of online advertising sales, West Coast and latimes.com, Tribune Interactive, [email protected], 213.473.2557.

Marc Wilson, CEO, TownNews, [email protected], 800.293.9576.

Steve Yelvington, VP, strategy and content, Morris Digital Works, [email protected], 706.823.3359

Elaine Zinngrabe, assistant general manager and executive producer, latimes.com, [email protected], 213. 473.2552

Anna Zornosa, chief marketing officer, Knight Ridder Digital, [email protected], 408.938.6063.