2003 – International Symposium on Online Journalism Panel 2: The Post-Bubble World Has profitability been achieved for the online news industry? Moderator: Melinda Gipson, Electronic Media Director, Newspaper Association of America Panelists: Neil Chase, Managing Editor, CBS MarketWatch.com Peter Krasilovsky, Partner, Borrell & Associates Inc. Stephen Newman, Deputy General Manager & Director of Operations, New York Times Digital Elaine Zinngrabe, Assistant General Manager & Executive Producer, Los Angeles Times (latimes.com) MELINDA GIPSON: Peter Krasilovsky is a partner with Borrell Associates. Steven Newman is Deputy General Manager and Director of Operations and New York Times Digital. Elaine Zinngrabe is Assistant General Manager and Executive Producer at latimes.com and I predict the most popular panelist because she took UT in the final four office pool. And Neil Chase, Managing Editor of CBS MarketWatch.com with apologies to Neil, all these other people are sort of in and out of the newspaper business, but he's the one that we get all our good ideas from. He's the one that we go to to steal. I'm going to shift a little bit from just the topic of profitability to talking about value and what the online publishing experience adds to the value of the franchise that we have as publishers. What we really have to do to create value is we have to prove our worth to advertisers, we have to enhance our worth to readers, we have to shape the future of media - we have to make this something that helps us get to where we want to be. And we have to be an asset to our industry. So let me ask real quickly, how many of the students here are journalism oriented? Almost everybody. How about marketing? Any marketers - future marketers of America? One. OK. Well, you know, sometimes when I start off by saying this, I say, well guess what? Your salary is all going to be paid by online job ads. But in fact, it's a lot more complex than that. We really are trying to build this as a business for advertisers across a wide range of categories. And what they value is reach, relevance, and return on investment. So you have to ask yourself the question, how does your online site uniquely deliver these things? Well, you have to be a dominant media player or you don't get the reach. Right? That is either locally or in your niche - like MarketWatch. 1 2003 – International Symposium on Online Journalism But you also have to build networks and partnerships and you have to leverage that local reader loyalty if you are just a local paper into something that you can deliver to advertisers who've been buying preprints and display ads all this time. What we work on at the NAA is trying to turn that into more of a network place so that we can start to pull in the money that has been going online which is very nationally based. You know, it's BMW, it's Dove. So the most important thing for us to remember in this whole equation is that it's still about putting buyers and sellers together. You have to ask your question, what are buyers doing? What are the readers doing online? This is what they're doing online. Top ten researched activities online: traveling, shopping. Going to movies, eating out at restaurants, listening to music, attending concerts and theatre events, attending cultural events, book reading, cooking, home decorating. So when I go on the road and I talk to newspaper publishers, I ask them how closely does your online site match the interests of what people do online? Think about that. This has become an even more interesting question of late because what we have done is we've been working with MORI Research on a day part study. When are people online? And what are they doing online at different times of the day that changes throughout the day. Eight to eleven pm? That's squarely the newspaper website. We're doing great there. And even first thing in the morning a printed newspaper. But the numbers are much bigger for the Internet than even for the online newspaper in general in that time frame. And if you look 6-10 pm, the other big 50 square under Internet, that's huge compared to where people are in terms on an online newspaper or printed newspaper for sure. And it's the closest thing to television in the evening hours. You'll get a chance to take a look at these slides later. I just want to point out what the blue squares are telling us. What they are telling us is that from 6-10, what people are doing when they go online is - we already said they're shopping to a large degree, but they're looking for jobs, homes, vehicles, auctions. 9-11 is where you get the 21 percent bracket here. That's when they're shopping for business related purchases. But what are we talking about there? Hewlett Packard, Compaq. You're talking about personal stuff 6-10. When you get home or maybe if you're in the office a couple hours later. Six-10 pm users online banking, off-beat news, online games, downloading music, calendar of events, health information, movie and event times, travel information, multimedia features, maps and directions. What are we doing about it? There are about half a dozen newspapers I know of now that have started to have a full time day parting editor sort of function. That changes over at 5 pm. There's a new look here. There's a good night Phoenix, or whatever else is going on in those markets. It turns into a little bit more of a city guide type of site. It's a lot more hip, there's more blogging, there's downloading music. That's what it's starting to look like. Edging your lead story in graphics - this is the Lawrence Journal World. Rob Curley is one of our sort of stars out there. But you still have to show the advertisers what 2 2003 – International Symposium on Online Journalism their success looks like or you can't make the business proposition. And every year what we do at the NAA is we have this digital edge awards and we give awards for online advertising. And I don't want to - I'm not going to say anything negative about this site. I'm just going to say that this is the reality for a midsize site. This was the winner this year. It was actually very clever of them to have gone to Dillards and talked to them about what their marketing and their brand goals were. They wanted to extend brand preference and built affinity, they wanted to drive foot traffic to the local store, and they wanted to target a medium to upscale user. Obviously this is a wedding site. The difficulty that the newspaper ran into right away was, here's a registration online site and wouldn't it be great if that's what Dillard's wanted. But it wasn't. They didn't really want the database. They wanted to make this site drive foot traffic to the local store where they would go in and register. They almost didn't know what to do with the database itself. So here we have a disconnect between what we're able to offer our advertiser and what they're really able to understand and accept and exploit. Flip side. Interesting that it still involves getting engaged, getting married. That's a lot of what the web is about, right? - is finding the right person… So this is the Washington Post's entry and they also won in the big size category. And what they did, is they had this floating wedding ring, or floating anniversary ring or big red lips. And they targeted this very intrusive advertising - what is in effect a popup - to the sports sites for the younger guys and to the business site for the anniversary rings. Here again, trying to target a very upscale audience, trying to do it in a way to get their attention. They had the ability to take registrations if you were interested and Mervis Simon wanted it big time. They actually exploited that list and found it very valuable. It can be big like the intrusive ad that I was talking about. It could be also small - a tiny little ad down there for Days End. The KU Sports site here - of course basketball was big there as well this year. What it says is best KU Bball room rate. They didn't even have to call the advertiser and tell them this ad was open, was on the site, because they got 8 reservations the first night it was up without telling anybody. OK, this is extremely effective because it's contextual and it's in a place where somebody would want to find a room. We've gone large in a lot of respects as well. This is a campaign that the Boston.com folks did alongside the Boston Marathon. They of course built a marathon site as they do every year. But they got it sponsored this past year by Kohls and they decided to tie in event marketing, a lot of feel good stuff. They built a whole site for - anybody a marathon runner here? - no. When you run a marathon (no, I'm serious, a lot of people in advertising, you'd be surprised.) They have to get sponsors to be able to run at all because it's expensive to run in a marathon.