With so many people predicting your imminent death, you're probably wishing the Grim Reaper would just stop by and get it over with. The good news is that when everyone in the technology business or the financial press is making the same prediction, it's wrong. Certainly you've made some bad decisions along the way, borrowing too much, buying that Taj Majal when maybe staying put was a smarter move. But just like that messy divorce, that's all "water under the bridge" as they say, so what do you do now?
I am an entrepreneur, and as such I've found myself in some tight situations. My companies have all been small, owner operated firms, so cutting costs to boost profits was never an option. My only option has been to find ways to make money, for the only way to dig yourself out of a hole is to grow your business. Where other people see despair, I see opportunity. I am just a small entrepreneur, so weight my advice accordingly as I offer my two cents.
Most of the papers and magazines I read put out a quality product. The irony is that while people don't think about spending money at the newsstand, they balk at paying online. This seems like an intractable problem, and maybe it is, or maybe not. I thought that people in my peer group would never pay for music after Napster appeared some years back. Apple has proven without doubt that if you package a product well, price it fairly, and make it easy to consume, people will buy it. Most of my friends are now voracious iTunes users. A few still use tools like LimeWire and BitTorrent, but they are the minority. The point is that people thought the Internet was the end of the music industry as we know it, and it has brought about great change, but now it seems that it was a bad thing for big box retailers more than anything.
I think your problem is pretty simple. Your content isn't the problem (unless you've already gutted your editorial team to boost short-term profits. If so, you can stop reading now and head over to the morgue). Your problem is you don't know how to make money online, at least not in meaningful quantities. I've made a few observations over the years, some of which are relevant to your situation.
People like to shop. Yes, it's true. People enjoy shopping. If you create a welcoming marketplace that serves an interest group or local need, people will come, and merchants will happily pay rent (advertise) to be there. Travel is a good example. People are always on the lookout for getaways. Cynics in the technology industry will say that Expedia and company already have that trade locked up. Last time I checked, Expedia doesn't do trains, buses, boats or horses. Not every trip involves an airplane. A chartered bus to a resort in the Adirondacks is travel just as much as a packaged trip to Cancun. While the airlines have mastered the process of stuffing people into winged tubes, the rest of the travel industry is less efficient, less visible, more local and needs a marketplace, one that you can build for your community. That's just one example.
Your archives are packed with ideas. Isn't it ironic that you are being punished for embracing technology. Many of you were publishing online when some of your critics were still wetting their beds. The people who built online advertising systems misunderstood the difference between advertising and merchandising. Pay a visit to your archives, and you'll see that many of your ads were really a form of merchandising, where merchants displayed a collection of offers to bring people into their stores. Take some of those old display ads, but apply that concept to the web and you can do some really interesting things. Back to the travel example (this will work for lots of things, but I'll focus on travel for this article). Let's say you create a page on your site like www.dailyretort.com/escapehatch where people can go to see this week's travel deals in your city. What they see is an attractive and well organized collection of ads from a variety of vendors, along with some links over to current travel articles on your site and elsewhere. The ads in the marketplace could run the gamut from airline fire sales, to bus trips, to a chartered fishing expedition that has a few seats left. Part of the fun of shopping is not knowing in advance what you want to buy. Oh, one other thing, don't underestimate the power of nostalgia. It has been a while since this style of marketing was prevalent, so it may be due for a comeback.
Advertising and merchandising are not the same thing. Merchandising is the art of selling products to willing buyers. This takes many forms from window displays to full page advertisements in magazines. In an online format, there are many ways to do this, with two primary forms. One form, which we're all familiar with, is an advertorial page, where a merchant, a travel agency for example, publishes its best deals of the day or week. These are not especially interesting online. What should work well are multi-vendor pages where merchants pay to be featured, while the editor has discretion in how the pages and offers are laid out, links to offpage editorial content, and so on. The editor's job is to make the page or mini-site interesting enough to visit and bookmark. Ad sales people are tasked with finding merchants with interesting and relevant offers for the page, and persuading them to advertise there. The point is to create a page or mini-market for a category of locally relevant merchants that is appealing to reader, while advertisers pay based on performance, probably some combination of views, clicks and premium fees for larger format panels.
Don't rely on others to sell your ads. I've talked to a lot of people who run a variety of websites. Most of them have reported poor results when they outsource their ad sales. Every trade magazine I worked with did most of their ad sales in house. Whatever you do online, it's up to you to sell your inventory. If an ad network wants to make a bulk buy, great, but don't sign an exclusive deal with someone expecting them to knock it out of the park. Every deal I've landed was a deal I brought in. Whenever I've relied on outside parties, whether for fundraising or outside sales, the results have been mixed at best. Again, back to the travel example. The airlines are an obvious source of ad dollars, but they're notorious penny pinchers. Merchants offering less conventional trips, Flounder Phil's Fishing Expeditions, may be happy to pay for last minute ads to fill a boat, but they're harder to find. You'll need to hire someone with some moxie to find these accounts, and to uncover great deals for readers, but once you do, you'll build up a loyal base of advertisers who will call you when they have something to sell. Don't forget, these ads are content. People who love to travel will be visiting Escape Hatch, or whatever it's called, to see what finds you've uncovered. People like to be sold to, so sell.
Local merchants need a marketplace. Local newspapers, while they may lose the 'paper' soon, are a natural marketplace for local businesses. What works for local travel operators will work for many other types of businesses, whether its a marketplace for clothing, restaurant deals, or home electronics. There are shoppers for every category. A display ad or merchandising format works equally well for online and offline vendors. A reader can click on an airline's ad to book a trip, while clicking on a local tour operators ad might go to a ready-to-print coupon. Local merchants are looking for ways to bring in business. Help them, and they'll pay you. Readers are looking for local merchants to buy from. Create an attractive and efficient marketplace for a category and buyers will go there. Cynics in the technology industry will say that "so and so already has a marketplace for ___". The one constant in the technology industry is change. If you create an attractive and compelling marketplace, people will go there, especially because local markets are underserved online.
Classifieds are a loss leader. Nobody will pay for classified ads now, apart from a few categories. In some markets, Craigslist is the default place to go, so think about ways to make free classifieds or Craigslist classifieds a loss leader that draws people onto a page with other paid ads. Used cars are a good example. Try to cut a deal with Craigslist, for example, to republish used car ads on your site, then frame them in a page that includes display ads from new and used car dealers nearby. Some people prefer to deal direct with sellers, others will want to go through a dealer. If you create an audience of likely buyers, sellers will want to be there.
Design matters. Automatic ad delivery systems are great for serving certain types of ads, but not the type of merchandising pages I am talking about. You may want to automate some things, like pulling an RSS feed of cheap travel deals from Expedia, but others you should lay out by hand. Merchandising is an art form. If it's done well, people will keep coming back, just like they used to read mail order catalogs. If it's done poorly, what you have is a dowdy link farm. Fortunately, you don't need to invest in expensive new systems to build these pages. You should be able to do this within your existing publishing system without writing a lot of custom software. This is also important. It means you can hire locally. People who can draw and write well live everywhere. You don't have to hire computer science graduates out of Stanford to do this.
Online subscriptions will happen, but maybe not for a few years. Apple demonstrated that it is possible to create an online marketplace for music. Amazon's Kindle, and other devices like it, offer similar potential, but we're probably 2 or 3 years away from mass adoption. Sooner or later, someone will produce an ebook reader that is cheap enough and good enough that it will become a must-have device. When that happens, and if you package and price your online product correctly, you should be able to generate subscription revenue. I am optimistic that this will be more successful than people are predicting. Word is the New York Times will be available on the Kindle for $10 to $15 per month, 50 cents per day on the high end. Packaging and pricing is all about presentation, so once consensus emerges on the magic price point, I don't see why newspapers and magazines won't enjoy similar success as music titles do on iTunes, especially if buying is as simple as pushing a button. The bad news is subscription revenue from these devices isn't going to be significant for a while yet.
The personal computer is dying faster than you are. People will look back on the period from the 1980s to the present as the time when personal computers were anachronistic, typewriter like devices. We're headed into a world of ubiquitous computing where computers will be embedded in many form factors that emphasize portability and convenience. People pay for convenience. Not many people will be reading you on a desktop computer five or ten years from now. It's more likely they'll be reading you on a full color foldable electronic ink display of some sort. We don't know yet who will be making that device, or what the magic bundle of products and prices will look like, but I think it's a safe bet that people will be buying books and magazines to read at the beach, on the train, and wherever just like they do today.
So look at the bright side. This is a period of great change, and with that, great opportunity, so don't give up just yet.