One way to save newspapers

by Bruce Kasanoff on September 14, 2010

Mass media is dead. Long live personal media. Basic elements of personalization strategy have the potential to save the newspaper industry, despite a trend that looks ugly. The transition won’t be easy, but at least this approach offers some hope for the industry, for readers, and even for advertisers.

A printed newspaper is about as mass media as mass media gets. With a few minor exceptions, everyone gets the same newspaper and the same ads. With this history in mind, it’s no surprise that most newspapers have brought a mass media approach to the web.

Sure, online newspapers experiment with social media by allowing comments and showing which stories are most popular or most often emailed. Other sites – not necessarily those run by major newspapers – allow readers to set up individualized news feeds. But few major newspapers understand and have adopted the basic thinking underlying personalization, which is:

personal = smarter

A personalized newspaper makes its readers smarter, and also never stops learning how to both serve each reader and profit from each reader. Let me give you a few examples of each.

Serving each reader

Intelligence means having something valuable to say and knowing what to say to each person. If you go up to everyone you meet and share your understanding of the way molecules behave, they won’t think you are smart; they’ll think you are crazy. But if you talk to a scientist about molecules and to a psychologist about human behavior, they will think you are smart.

In this same manner, the online version of The New York Times should make me smarter than the printed version does. When this is the case, I will gladly pay the same price to receive it in lieu of the printed version.

Today, the online version makes me dumber. It’s harder to read, harder to browse, and takes advantage of few of the benefits that being digital allows.

For example, I’d like my online paper to offer me different reading modes, such as Cover to Cover (an easy way to start at page one and flip the pages in order); My Top Stories (the subjects and writers I care about most); Devil’s Advocate (points of view that directly challenge the writers and stories I normally read); Off the Wall (anything but the stories I normally read, or their opposites… this mode would provide me with the equivalent of taking a vacation or visiting a different culture).

Modes serve an important purpose, because they offer a predictable way to offer a reader a change of pace. Think of a car that lets the driver switch back and forth between automatic and manual transmission modes. Although you get to decide which you prefer today, each mode operates consistently each time you choose it.

A common argument against “personalized news” is that readers will screen out the stories that challenge their thinking, and thus we all become increasingly narrow-minded and set in our ways. For example, Nicholas Kristof recently wrote, “That’s because there’s pretty good evidence that we generally don’t truly want good information — but rather information that confirms our prejudices.”

But with modes like these, readers would have a much greater chance of encountering information that challenges their thinking and engages their imagination. A great teacher learns about the students in his classroom, and figures out how to spark the imagination of even the most reticent student. A greater digital newspaper should attempt no less.

Profiting from each reader

According to recent stories, many newspapers make about one-tenth of the ad revenues online as offline. One reason for this is that newspapers have yet to demonstrate that all readers are not worth the same.

Eric Schmidt, CEO of Google, last year told columnist Maureen Dowd that his firm is talking to newspapers about an ad model that “understands your history and your interests.

“They’d know enough about your demographic to know male, female, age group, what have you. The whole secret here is the ads are worth more if they’re more targeted, more personal, more precise.”

The New York Times, for example has many influential readers including CEOs of Fortune 1000 firms, elected officials, performing artists and noted physicians. The Times should not be charging advertisers as much to reach these people as it does to reach my neighbor Fred, who mainly complains about the weather and watches TV.

If the Times influences a CEO to consider hiring a major consulting firm, it ought to get paid $10,000 or perhaps more for that lead. Online, such a lead can be recorded and quantified, if the incentive is right for all parties. Offline, doing so is near impossible.

Likewise, the notion of advertising may be misguided when it comes to high value readers. A powerful incentive for being identified as a high value reader might be the elimination of normal advertising and the addition of highly focused, value added messages. Said another way, high value readers ought to be delivered win/win propositions instead of BUY ME, BUY ME in-your-face advertising.

Personalization versus faux personalization

Some years back, I was involved in a study that measured the financial payback to firms that had launched major “customer-focused” initiatives. By a large margin, the number one indicator of whether an initiative was profitable for the company was whether the initiative delivered tangible benefits to customers. This is notable on two levels. The first is that most “customer-focused” programs we studied did not deliver tangible benefits to customers; instead, they simply served as a way to market more aggressively. The second is that actually helping customers is a profitable tactic.

Most so-called personalization efforts don’t offer tangible benefits to customers. Instead, they are just a scheme to promote products and services. But if you can actually make me smarter, well, that would be a real benefit to me.

Digital delivery offer numerous opportunities to make readers smarter. It could enable readers to annotate stories (i.e. write notes in the margins), store stories in a file (not merely bookmark them), and easily create presentations to share with others (whether that means your team at work or your son at home.)

Some major papers won’t be able to make any major transition, and will fail. But survival is a powerful instinct, and it has a tendency to open minds. Some will change their culture, embrace personalization, and eventually thrive again. In that spirit, I offer a few observations.

Before I got personalization down to two words (personal = smarter), I got it down to eight: remember information for customers, not just about them

The more a newspaper remembers information for each reader, the smarter it will make that reader and the more value it will add.

Digital delivery is not a mass market business, and for the newspapers who come to understand this, their financial crisis will start to fade away.

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