The auction site, which is known as Bid on Print, began trading on 24 November with more than 140 newspaper titles available to media buyers.

Bid on Print is not a programmatic or real-time bidding exchange, like its digital ad counterparts – “instead, a publisher selects inventory, applies a floor price and then sets a timeframe in which the ad must be bought. Buyers then bid with the highest offer winning, or they can simply click a ‘Buy Now’ button.”

The exchange is designed to help publishers sell less valuable inventory and free up sales teams to focus on premium stock, explains mUmBRELLA.

“We are creating commercial efficiencies for both media agencies and publishers. Media agencies can bid and book a print advertisement with a click of the mouse,” Newspaper Works chief executive Mark Hollands said. “We have made the system as simple as possible to appeal to buyers and planners, and make the transaction quick and simple.

The site has been created by The Newspaper Works and Publisher’s Internationalé. It transacted more than AUD$350,000 (USD293,000) during pre-launch trials.

“Feedback from media agencies suggests we have reduced to just a few minutes what took them hours to do previously, especially for campaign-scale purchases,” Publisher’s Internationalé CEO Charlton D’Silva said. “Newspaper publishers see the benefit of helping to create efficiencies for agencies and have keenly supported the initiative.”

In contrast to programmatic trading, allowing publishers to fix a minimum price means that rates can’t be forced below a level they find acceptable .

Newsweek was founded in 1933. In 1991, it had about 3.3 million readers. But the dawn of the Internet eroded its readership and advertising revenue. In 2010, the Washington Post Company sold the magazine for US$1. In August 2013, the magazine was acquire by International Business Times Media.

The re-launched print edition will be positioned as a premium product, costing subscribers more than it used to. It will contain 64 pages and rely on subscription sales more than ad pages to keep it in print. Its new owner hopes to hit a circulation of about 100,000 for the print version in the first year.

Read more: Newsweek Plans to Return to Print

The cover for the final print edition of Newsweek released in December 2012.

Both on the speaker’s dais and among participants, there were several clear themes for news media publishers – “big data”, paid content, branding for news media, content packaging for targeted audiences, as well as clever approaches to creating new revenue from print.  All of these themes support the view presented by Earl Wilkinson, INMA global CEO during his closing presentation.  Wilkinson underscored that digital is here to stay.  The presentation, distribution and management techniques characterized by successful digital media companies will progressively dominate in the media management world.  Wilkinson emphasized that the adoption and evolution of these techniques are at different stages of development around the world.  But in every case, digital content creation and distribution and the supporting tools will be the key to future success in digital as well as print.

First among the digital themes has to be “big data” and its role in developing advertising and audience.  Frode Eilersten, Schibsted’s newly appointed Executive Vice President for Strategy and Digital Transformation presented the media group’s investment in data acqInnuisition and analysis to support advertising sales, product development and marketing.  Eilersten who recently joined Schibsted from US consultancy McKinsey highlighted the investment required in data acquisition and analytics, but also the need to build an internal business culture to make use of the data to solve complex business problems.  Data in particular was the “secret sauce” in advertising networks that allowed a publishing company to create extra value from the advertising presented to their audience.  Data and research was presented as one of the required success factors in the development and launch of paid content at sites as different as the New York Times and the TB+ premium content model developed by Tønsbergs Blad, from a small town southeast of Olso.

Content marketing or native advertising was another important area of discussion.  In content marketing, the role of advertiser and publisher are increasingly blurred. Advertisers are now supplying, choosing or at a minimum approving content for publication on news media websites in exchange for an “advertising” fee.   The advertiser recognizes that strong editorial brands offer special “brand benefits” to their audience.  By associating themselves closing with strong news brands, advertisers enhance their own brand credibility and recognition.  There were many potential implications of this discussion.  The movement of advertisers to create their own media and sidestep news media for brand advertising was one important implication.  Bennetton’s Colours magazine or Google’s advertising and marketing quarterly Think+ were cited as examples of this trend.  For publishers, content marketing creates the need for a clear and well articulated plan for how to create and present “advertiser content” in order to maintain the overall credibility of the news brand.  Finally, speakers highlighted how publishers will increasingly need to think about investing in the brand of their news media in order to create value in the publishing brand not in just the audience for an individual story.

Finally, the conference came back to its roots and presented some interesting programs to enhance the reception and profitability of the printed product.  Two examples of this approach stood out.  First, presenters from Die Welt Kompakt and NRC.Next presented content packages developed to target young professionals.  But other examples targeting children as well as women reminded the conference that targeted content well-delivered can still create an audience attractive to advertisers.   The second approach to the product development came from Sandy MacLeod, Vice President Consumer Marketing and Strategy at The Toronto Star who presented several examples of well researched and well delivered content products like improved TV guides and puzzle books provided for a price.  MacLeod made the compelling case that there is still revenue available for the print product, if you look for it.

The INMA European News Media Conference provided a wealth of examples for regional media companies to pursue.  For many in the audience the challenge is how to minimize the risk to developing, customizing these models to their different media markets.  For large companies like Schibsted, Axel Springer or Sanoma Corp, there are ample corporate profits available to experiment without too much risk.  Internally these companies have the ability to raise internal start-up capital and to recruit and train media managers with digital capabilities.   The challenge for smaller companies lies in finding resources, both talent and capital, to develop experiments.  But the need to continually experiment, measure, improve or discontinue new products was presented repeatedly as one of the fundamental requirements to success in the emerging multiplatform world of news media.

No other company is even close to Google. The survey saw Facebook take second place, having captured 13 percent of worldwide mobile ad revenue in the two years since it began running mobile ads. That means that these two companies alone capture just shy of 70 percent of all mobile ad revenue.

In countries like Bangladesh, Senegal, South Africa, Ghana and Indonesia, a report last year by mobile browser maker Opera found for a majority of internet users in those countries that mobile is the only way people access the internet. Smartphones and simpler mobile phones with internet access might be the primary way that your audience is accessing your website, which is something easily confirmed by looking at your digital statistics packages.

Also statistics show that mobile audiences are younger audiences, and this is just another example of how digital platforms allow you to reach different demographics, rather than simply shifting your current audiences.

Initially, the opportunity to earn revenue from mobile advertising seemed even less than internet advertising, which has seen rates plummet over the past few years. However, as we have seen with the desktop internet, major players have been earning vast sums of money. The challenge for news organisations is that they haven’t enjoyed the same dominance in digital that they enjoyed in print and still in enjoy in broadcasting.

The major internet players are already aggressively growing their mobile advertising revenue and news organisations cannot afford to wait to pursue their own mobile revenue strategies.

Building a staged strategy

The first step is to make sure that you are doing your best to serve mobile audiences. Fortunately, making your sites mobile friendly is now easier than ever with mobile themes and plug-ins for popular platforms such as WordPress and many development frameworks that allow you to create mobile and tablet editions for your sites.

In terms of monetising mobile audiences, while eMarketer looked at global mobile advertising revenue, most news organisations do not operate globally and must instead focus on their local or regional market. You will want to first evaluate where both your consumers and your advertising markets are in terms of mobile adoption. If your consumers have already flocked to mobile but your advertisers are still reluctant, initially, you’ll need a low-cost solution but one that scales as the opportunity grows.

Start with mobile ad networks  – Just as ad networks can help you get a start in paying for the costs of your initial internet efforts, there are mobile ad networks specifically designed to help you begin monetising your mobile audience. mobiThinking has an up-to-date guide to ad networks and a guide on how to choose an ad network, including a list of ad networks by region and country. One key thing they note is that no one mobile network is dominant.

Just as with your traditional internet advertising, you’ll want to develop premium advertising options as quickly as possible. Ad networks can help you with that and as the digital advertising network matures it is rapidly developing premium options and strategies across all forms of digital advertising including mobile.

When you’re developing your mobile site, you’ll want to make sure that you can easily integrate ad networks and standard mobile ad formats.

Explore local advertising opportunities – For local media, there are unique opportunities. Google has found that about 50 percent of all mobile search is local, and that means that often your audience is looking for nearby businesses or services. Local media already have the sales relationships with local businesses, and this can be a great competitive advantage. You’ll want to explore what options mobile allows for targeted local advertising.

With the rapid rise of mobile, advertisers and marketers see a huge opportunity, which means that there is a lot of money pouring into innovation in this space. For instance, in Malaysia, telecommunications provider Maxis has launched a mobile deals service targeted at 15 shopping destinations that will send subscribers to their myDeal service offers when they are shopping. The service doesn’t require an internet connection but instead relies on determining the location of the customer based on mobile phone masts (cell towers). The deals are delivered by SMS.

Tablets offer unique revenue opportunities – When thinking about mobile content and revenue strategies, it is also important to consider tablets, especially phablets – large screen smartphones – such as Samsung Galaxy Note or Asus FonePad. These devices are competitively priced when compared to smartphones and an absolute steal with compared with laptops or large-screen tablets. For emerging markets, this is the perfect option for someone who doesn’t want or simply doesn’t want to pay for both a smartphone and a laptop.

Tablets or phablets open up all kinds of opportunities if they are popular in your market. For one, numerous studies show that tablet owners engage with content almost as heavily as print readers. That’s definitely something to remember when pitching to advertisers.

Of course, advertising in not the only source of revenue to consider. As we noted in our April Digital Briefing, Folha in Brazil introduced a paid-content strategy that charged for tablet and mobile app access. In most markets, tablets are initially bought by affluent members of your audience, and this type of strategy allows you to add a new revenue stream from those who can afford to pay for your content. Note that less than six months after Folha started charging for their tablet and mobile apps, they also added a metered paywall for their website.

Launch a mobile division – As your mobile market grows and the commercial opportunity will support it, larger organisations should consider launching a mobile division to create mobile products and generate mobile sales. The Media Briefing in the UK recently profiled how Norwegian publisher VG has done just that and is on track to dramatically increase the group’s mobile revenue. Norway is a very advanced digital market, but in major emerging markets, mobile use may quickly catch up with developed markets in ways that the traditional internet won’t for years to come.

This staged strategy will help you grow are your market and your organisation develops. However, no matter the size of your organisation or the state of your mobile market, it is an opportunity that news organisations cannot choose to ignore. The major internet players are moving aggressively to dominate in mobile just as they have with the desktop internet, and news organisations must make sure that they do not wait until Google and Facebook come to dominate your mobile market.

No Signs of a Newspaper Crisis in Asia and Latin America by Statista

In the past five years, print circulation and advertising continued to grow in Asia and Latin America while falling dramatically in most other parts of the world, with Eastern Europe suffering most, according to the 2013 World Press Trends report by WAN-IFRA.

In some ways, little has changed in the past year. Newspapers, both in print and in digital form, continue to enjoy unprecedented readership, with more than half of the world’s adult population reading content from newspapers. However, with advertising revenue declining over the last five years by 23.3 percent in North America and Western Europe, by 24.9 percent in Australia and New Zealand and by a dramatic 30.2 percent in Eastern Europe, the industry is still under pressure.

As with last year’s report, WAN-IFRA found that engagement remains a challenge. However, the study has found some rays of hope and successful strategies that are beginning to show promise in generating revenues both from digital circulation and also from new non-traditional revenue sources.

Competing for digital attention

Newspapers continue to enjoy large audiences digitally. However, while newspapers find that digital platforms have increased their readership, the engagement they enjoy is low compared to internet giants such as Google and Facebook.

The report found:

While more than half of the digital population visit newspaper websites, newspapers are a small part of total internet consumption, representing only 7 per cent of visits, only 1.3 per cent of time spent, and only 0.9 per cent of total pages visited.

To put this in perspective, Nielsen in the US found in 2010 that internet users were spending 40 times more time on Facebook than any news site. They spent 8 to 12 minutes a month on local newspaper websites, but they spent on average seven hours a month on Facebook.

Finding new revenue in the digital age

While the challenges have changed little in the past year, newspapers are finding ways to generate revenue to offset the declines in advertising.

Develop paid content strategies – With the success of the New York Times in implementing their paid content strategy, the report said that almost half of the newspapers in the United States have rolled out paid content plans of their own. The strategies vary. “Forty per cent are using a metered model, one-third charge for premium content, 17 per cent require payment for any access, and 10 per cent use some other model.”

Subscriptions are performing better than single copy sales, and the report also found that “The packaging of print/digital subscriptions is becoming increasingly successful.”

News organisations around the world are trying this bundling strategy, including Folha in Brazil, and the newspaper has signed up 45,000 digital subscribers in the first year of operation of their paid content strategy.

In our overview of Latin American paid content strategies in April, we found a number of different approaches including metered and hard paywalls, bundled print and digital subscriptions, digital kiosks similar to Apple’s Newsstand service and also platform based options in which publications charged for access to tablet editions.

While proving an important source of revenue to help offset the decline in advertising in some regions, PricewaterhouseCoopers found that paid content may not be enough to totally offset the declines in advertising.

AdAge quoted Greg Boyer, managing director at PricewaterhouseCoopers’ entertainment, media & communications practice as saying:

There are some very positive signs about the resilience of the industry, but a lot of that lost revenue won’t necessarily come back.

Look to tablets to match print engagement – Audiences are increasingly turning to mobile, and while advertising revenue on mobile lags, research found “news engagement via tablet, as measured by time spent with news content, is equal to that of the printed newspaper”. With higher levels of engagement, there is the promise that advertising revenue could be higher on tablets than on the web.

Develop non-traditional revenue streams – Non-traditional revenue streams have been a bright spot for some newspapers  and offer one possible template for news organisations looking to develop new revenue streams elsewhere. The report found:

In the United States, 27 per cent of newspaper company revenues now come from non-traditional sources: 11 per cent from digital, 8 per cent from new revenue from other sources (service to clients in addition to advertising), and 8 per cent from non-publishing revenue (e-commerce).

Developing these services before traditional revenue streams start to drop may provide insulation from digital shocks. What new revenue streams are you pursuing? Have some proven more successful than others? Let us know in the comments.

Leverage print dominance to fuel the digital transition – All but a handful of newspapers in North America and western Europe failed to leverage the powerful position they had in print to ensure their digital, multi-platform future. But according to Frédéric Filloux, the general manager of for digital operations at Les Echos Groupe in France, news groups in Latin America and Asia are succeeding where their developed counterparts failed. Writing on his popular blog, Monday Note, Filloux said:

At a much faster pace than in the West, Latin America and Asia publishers take advantage of their relatively healthy print business to accelerate the online transition. These many simultaneous changes involve spectacular newsroom transformations where the notion of publication gives way to massive information factories equally producing print, web and mobile content. In these new structures, journalists, multimedia producers, developers (a Costa-Rican daily has one computer wizard for five journalists…) are blended together.

They have achieved this by rethinking newsroom organisation and management. Of course, key to this conversion is not simply to rethink the newsroom organisation but also to rethink sales strategies and techniques. The digital transition is just as much a transition in business and advertising as it is a shift in editorial thinking.

US tech and media consultant Alan Mutter highlights the rise of Google and the collapse of US newspaper advertising

In the early phase of any media transition, we rely on what we know and try to adapt the thinking of the current medium to the new media. In the early days of television news, broadcasts were often little more than a radio newsreader sitting in front of a camera. It took time for us to understand how TV was different and how best to use this new visual medium.

The changes in thinking needed to effectively adapt to a new medium are not just editorial but also commercial. Alan Mutter, who has worked in newspapers and in digital media start-ups, has succinctly summarised the changes that digital media has brought to advertising as a matter of the traditional media model of ‘reach’ versus the targeted digital model of ‘each’.

Pre-digital advertising relied on reaching as many people as possible, while not being as concerned with targeting specific audiences or consumers. To the extent that it was possible to reach specific consumers, it was done with special sections in newspapers or magazine content. Digital advertising allows much greater targeting, and Google’s commercial breakthrough was to deliver ads based on what people are searching for. The logic goes that if someone is looking for a holiday flight then they might also be looking for a hotel or rental car. Print media were woefully late in grasping this key difference in advertising strategies. While Mutter is discussing the US market, the changes in digital advertising are universal and relevant to any market. In fact, in some markets in the early stages of the digital transition, his insights are in some ways even more relevant and could help news businesses to avoid the strategic blunders made by the US newspaper industry.

As we’ve discussed a number of times here on Knowledge Bridge, one of the biggest challenges in the digital transition is that news organisations face a new class of competitors for digital ad revenue, and one of the biggest mistakes that newspapers, in particular, made is that they continued to view their competition as other newspapers or other news media, instead of appreciating the competitive threat posed by new digital competitors such as search engines and social networks. Looking at more than a decade of data, Mutter lays out the dire consequences of this miscalculation:

 In less than a dozen years, this upstart start-up built a $46 billion advertising business that was twice as large last year as the combined print and digital ad sales of all of the 1,382 daily newspapers in the land.

He produced a graph, looking at newspaper print and digital ad revenue versus Google’s ad revenue. In dramatic terms, the graph shows how US print advertising has utterly collapsed since its peak in 2005, while Google’s advertising revenue was 15 times greater than all US newspapers digital ad revenue in 2012, Mutter says, based on figures from the Newspaper Association of America.

Mutter accuses the newspaper industry of a lack of imagination and says that it simply tried to apply the traditional advertising model to digital, while completely failing to understand that a different advertising model based on harnessing user data to deliver highly relevant, targeted and efficient ads was dominant in digital. Mutter says:

Newspapers (along with magazines, billboards and broadcasters) represent the traditional but inefficient “reach” model of advertising, which depends on spreading a commercial message to as large an audience as possible in hopes of connecting with qualified customers who happen at the moment to be receptive to it.  Google, on the other hand, represents the highly efficient “each” model of advertising, which lets marketers put customized commercial messages next to only the results of searches containing specific keywords they have selected to target their ads. The Google system not only enables marketers to target exactly the right prospect at the right moment but also makes it remarkably easy to monitor response rates and, thus, measure an ad’s return on investment in real time.

The key question for publishers and media executives is how to respond to this competitive threat. Mutter gives some advice.

• Know your audience. Invest in technology that allows you not just to know how many unique visitors you have on your site but also as much as possible about what they are reading, who they are and what are their interests.
• Invest in ad targeting technology. Companies such as Crowd Science provide ad targeting services that will help you deliver much more relevant, and therefore, better performing advertising.
• Use specialist or niche content to sell ads relevant to that content. It isn’t a digital innovation that if you have a food section that you sell ads for restaurants, grocers or other food-related businesses. If you have a fashion section, again, you’ll want to make sure that your clothing and other fashion-related clients know about the opportunity to reach interested members of your audience.

Understanding this key shift from ‘reach’ to ‘each’ advertising will help you develop strategies that more effectively compete against new digital competitors as you seek to grow your digital advertising revenue. The game has changed, and you need to grasp these changes if you want to win.

There is hardly a week that passes by when we don’t read of some bad news or other about the media industry. More and more papers are reporting circulation declines and many have cut down on the number of publication days.

Just this month, a business information analyst, IBISWorld, reported that revenues for newspaper publishers in Australia are expected to drop by 4 per cent this year – from $6.7 billion to $6.4 billion. IBISWorld general manager Karen Dobie was quoted as saying:

Declining circulation over the past five years, caused by time restraints, the rising popularity of new media like the internet, pay-TV, and mobile devices, and competition from consumer magazines has continued to have an adverse affect on the industry.

That story is not unfamiliar to newspapers worldwide. While the declines in the US and Western Europe are well known and well reported, those regions are not alone is seeing print circulation decline. A recent report by the International Federation of Audit Bureaux of Circulation showed that from 2010 to 2011 declining print circulation even spread to the Asian giants of China and India, which had been seen as bright spots in terms of print as rising affluence and literacy increased newspaper sales.

Revenue following circulation declines

As print circulation comes under pressure, sadly revenue follows it. Indeed, new media has taken a huge toll on one particular area for newspapers – the classifieds pages.

What once used to be referred to as “rivers of gold” has slowed down to a trickle, with consumers preferring to check out classifieds online where searchability is the prime selling factor.

Not so long ago, for example, the Sydney Morning Herald’s Saturday paper was packed with 120 pages of classifieds. But today, it is much less than half that. Classifieds for property, cars and jobs have migrated online with a vengeance.

Newspapers are, in large part, to blame for this predicament.

For years, they stubbornly refused to put their classifieds online, giving non-traditional players such as Craigslist, eBay and new entrants such as iProperty, PropertyGuru.com.sg and carsales.com.au.

iProperty has sites in Malaysia, Singapore, Hong Kong, Indonesia, The Philippines and India, and in some cases multiple sites in one country – all targeted at taking away a slice of revenue from print media.

It has diverted some of the revenue from Singapore Press Holdings (SPH), which owns more than 10 newspapers in Singapore. For many years, its flagship paper, The Straits Times, refused to put its classifieds online for fear that if classifieds were available online, few would advertise in the printed paper.

Meanwhile, other hitherto unknown players entered the market. For nearly a decade, they were allowed to grow with little fightback from the SPH group.

“Our online competitors have grown strong through the years. In fact, for some of them, we had allowed them to grow,” SPH’s vice president and head of its online classifieds, Johnson Goh, confessed at the Digital Media Asia conference held in Kuala Lumpur last November.

SPH saw its classifieds’ revenue decline while, at the same time, the number of adults using online classifieds doubled since 2005.

Newspapers begin to fight back

Last year, the group decided to act.

“If our classifieds were going to lose business to online players anyway, there was no reason why we should not have our own sites,” Mr Goh said.

SPH devised a strategy to fight back. It reorganised its classifieds team into print and online, repositioned its classifieds strategy, and rebranded the various products.

In June last year, it launched the first of several vertical, or niche, businesses. STJobs, a recruitment and employment site, took off, followed by STCars, STProperty and a general classifieds site, STClassifieds.

It was a resounding success, said Mr Goh. STJobs has chalked up 10 million pageviews since it was launched.

Media groups go global with classifieds

Similar stories of newspapers coming late to the party can be found around the world – and some are success stories too.

Sweden’s Schibsted is a case worth studying for those interested in the online battle. A major publisher of newspapers including Norway’s biggest paper, VG, Schibsted has gone into online classifieds aggressively. Its aim is to be the No.1 online classifieds site in the world.

In the spring of 2008, Schibsted brought all its online classified companies into Schibsted Classified Media.

Already hugely successful with its Blocket.com classifieds site in Sweden, the company decided to take the model around the world. It launched Blocket or Blocket-like sites throughout Europe.

Today its European operation has become the leading online classifieds business.

Not content to sit back, Schibsted has set up operations or entered into partnerships with local groups in Asia, Eastern Europe and Latin America.

The sites take on distinctly local names, such as ayosdito in The Philippines, chotot.vn in Vietnam, liaomaimai.com in China, sahipasand.com in India and mudah.my in Malaysia.

SCM’s annual report for 2011 says gross operating revenue rose to €264.1 million from €213.7 the year before. Of this, the international business generated €75.1 million.

South African media giant, Naspers, too has employed a similar strategy. Early during the online boom, Naspers bought into TenCent in China. Today, TenCent is one of the biggest players in China, and in terms of sheer size and numbers, in the world.

Naspers has moved rapidly into a range of products including Russia’s Mail.ru, Brazil and elsewhere, with classifieds offerings such as Dealfish, Gadu-Gadu, kalahari.com, lelong, PayU, PriceCheck, Sanook!, and TravelBoutique Online.

Clearly, it is no longer the local market or even hinterland countries that is attractive to some of these major players. The world, indeed, is their oyster.

The key challenge facing media in the developing world, especially print media, is to decide how to respond to this digital transition. There are two key questions, the answers to which will help create a successful response.

• Are classifieds or their close relation directories important to your business today?
• What unique strengths can your organization use to compete online?

The answers to these two questions should guide media companies in markets where the transition from print to digital classifieds is underway.

Media companies around the world have used the power of their printing capabilities and their audience reach to build print classifieds into a key revenue stream for their news business.   In some media houses, classified revenue contributes a substantial portion of topline revenues but, more importantly, bottom line profits. These profits have been essential in supporting the public service mission of journalism. For instance, when an import/export firm in Hong Kong pays the South China Morning Post to place a recruitment ad for an accountant, they are in part subsidising the cost of the paper’s newsroom.  When this type of cross-subsidy is substantial, a news media house must think carefully about how to respond to the inevitable pressure that online classified competitors bring.  How these classified-oriented media houses respond will be in part a function of how they answer the second question about their competitive strengths.

Media houses that do not have a traditional classified business may think that they don’t have a problem because they have no classifieds revenue to lose. But they still need to develop income from their online activities, and building a digital media business is not easy. Most successful digital media strategies include revenue from multiple sources, some from advertising, some from paid content, some from syndication, perhaps some from online classifieds. Zenith Optimedia, a global advertising research firm forecasts the global online classified market to grow to over $14 billion by 2015.  So, problem? No.  Opportunity? Perhaps.  How your media house responds to the online classified opportunity will also reflect the answers to the second question.

Honestly evaluate your competitive strengths

When answering question two, two phrases stand out – “unique strengths” and “compete”.   The classified business is a simple business.  People have things to sell to other people who want to buy them or, in the case of a company who needs to hire staff, companies have jobs to offer to people who want new jobs.  It is an exchange.

There are two types of classifieds markets that have been shown to work well: high volume markets where a lot of people have a lot of things to exchange, and niche markets selling items that are otherwise hard to find. Classifieds sections for jobs, cars, apartments or used PCs tend to be high volume markets, with a large audience of buyers attracting a large audience of sellers, which in turn attracts more people looking to buy. Such markets, once established, become self-perpetuating.

To evaluate your opportunity, you need to candidly evaluate your company’s strengths in an online classified competition:

• Existing Business – Does your company operate a classifieds marketplace offline?  Have you built a successful exchange for goods and services offline that you can build upon to compete online?
• Audience – Can you provide more potential buyers to the online classified site than the online competition?  Do you have the media reach that allows your company to build an audience of potential buyers at a lower cost than another competitor?
• Sales – Can you provide more potential sellers to the online classified site?  Does your company have a unique ability to sell advertisers into the online classified site?
• Technology – Does your company have unique understanding of how online classified buyers and sellers use technology that will allow your company to build the best “product”?  Perhaps most of the online classified competitors in your market are focused on building websites, when most buyers and sellers rely on their mobile phones?
• Reputation/Brand – Does your company have a strong reputation or a unique brand in the market?  Will buyers and sellers be more likely to trust your company with their exchange than they might a new online only company?
• Unique Knowledge – Is there something unique about your market that gives you unique understanding about how buyers buy and sellers sell their products? The internet has not only forced a transition from traditional media to digital media; it has also created new specialty markets for buyers and sellers that never existed before. Fivrr.com, a specialty site where people exchange small jobs online for five US dollars, has become one of the most successful new classified sites in the last few years.  According to Alexa, Fivrr today is one of the top 500 sites in the world and among the top two hundred sites in countries as diverse as Sri Lanka (#47) and Australia (#62).

Survey the competitive landscape

How to deploy these strengths will be a function of the competitive environment.   In many markets, online classifieds competitors rely on technology as their main strength.  They build a single online site that can be easily expanded to any region or category of goods, for example,  Avito in Russia and Quikr in India.  Other competitors will focus on a particular category, like recruitment, real estate, or automobiles and build a national online site for that category, such as  PropertyGuru in Malaysia and Rabota.ua in Ukraine.  Usually both approaches will exist in a market at the same time.

Another question to consider is whether your market’s size or location provides some insulation from national online classified competitors.  Most classifieds markets are about building the largest exchange of buyers and sellers, and online classifieds are no different. This means that national competitors often focus on metropolitan regions with large populations and easy access to the internet.

This leaves opportunities to create niche local or specialized classified marketplaces.  These opportunities are often found in smaller markets with high internet penetration or, in a non-geographic strategy, very focused interest groups may also develop an online classified site.   One example of a successful specialty classified site is the BandMix.com which, with its partner site ReelMix.com, focuses on the special needs of musical bands or film crews recruiting for talent.

When you are assessing the market, you must be clear that there is an opportunity there to be exploited. If the market is already too competitive or your organization’s strengths do not match the requirements of the market, then this may not be the best opportunity for your company.

Choosing a strategy

After evaluating the online classified competitors and determining whether your organization has unique strengths needed to succeed in the market, you will need to develop a strategy.  There are four types of strategy, each of which build on an understanding of your company’s unique strengths and the competitive environment.

• Traffic Sponsorship.  In this strategy, the media company creates a partnership with a leading online classified site to provide traffic, to build the number of buyers and sellers on their exchange.  This strategy is the least risky.  Media companies pursuing this strategy often face multiple, well-established online classified competitors.  In this case, the partnership offers the online classified competitor access to the traffic of the company’s news site. The online classified site almost always pays some base fee for the traffic and then perhaps a bonus if the traffic levels reach pre-set goals. MalaysiaKini’s relationship with the PropertyGuru is a good example of this type of strategy.
• Sales and Marketing Partnership with Online Classified Sites.  In this strategy, the company’s partnership expands to include not just traffic.  This partnership builds on the media house’s sales and marketing capabilities to promote the online classified partner and to sell advertisers into the online classified site.  Similar to Traffic Sponsorships, media companies choosing this strategy face strong online classified competition.  But, in addition to online traffic, they also bring strong sales and marketing skills.  The New York Times chose this approach when it partnered with Monster, the global online recruitment classified company.
• Build Your Own Online Classified Site.  In this strategy, the company elects to choose its own technology to create an independent online classified site.  The technology chosen can either be built or bought from a specialty online classified software company, like FlyNax or MarketGrabber.  But the company’s ability to choose or build and then maintain its own classified software creates a significant new level of risk.  This approach assumes that online competition is still limited or that the company has unique strengths in technology, sales and marketing or some unique market understanding will result in a successful online classified launch.  AltaPress in Barnaul, Altai, Russia pursues this strategy with their online site KP22.ru, an online classified companion site to their successful print classified newspaper Kupi Prodai.
• Build a Network for Your Online Classified Site.  In this strategy, several traditional media companies or a media holding company which owns several traditional media creates their own online classified site.  This is the most risky strategy involving both the risk in the choice and maintenance of a technology platform as well as the risk created by linking multiple different media companies, each with different strengths and goals for the online classified site.  The choice of this strategy often reflects a rapidly changing market where media companies have a significant stake in the traditional print classified industry.  They have strong traditional classified brands, well-trained sales and marketing teams and a good foundation in technology. By pooling these strengths, they believe that they can create the necessary scale to successfully compete with larger national online classified companies.

Each strategy includes a number of different ways to capture potential online classified opportunities, but every media company will need to customize and adapt the strategy to their unique strengths and market situation.  As new strengths are built and the competition reacts to shifts in the market, you should review and evolve your ongoing classified strategy to stay ahead of the game.

Classifieds is perhaps the oldest form of advertising.  Although technology has changed the dynamics of the equation, the equation remains the same.  Almost every community has their version of a classified “site”, whether it is on their mobile device, on their PC, in print or on a real bulletin board in a local café.  The goal is to bring people together to create value for all, a mission not too dissimilar from the goals of any media company.

In the discussion of the digital transition, there are hopes for new opportunities but also fears. Apart from the worry about business disruption, there is also a fear of creating a digital divide between one world of wealthy, well-informed tablet-toting news consumers and another, not only poorer in terms of wealth, but also in terms of information.

At the recent O’Reilly Tools of Change Startup Showcase, Arthur Attwell, founder and CEO of print-on-demand book start-up Paperight, put the challenge this way in the context of South Africa:

I come from Cape Town, South Africa, and my background’s in educational publishing and e-book production. South Africa is like two different countries: about 2 million wealthy people who support the publishing industry (excluding schools publishing, where the state is the largest client by far), and about 48 million people who could never afford an e-reader, don’t have credit cards to buy things online, or can’t afford to physically travel to a bookstore. So to make it possible for most people to read books, we need to totally rethink how we sell books.

While Attwell was very aware of the challenge, he also saw an opportunity. Although technology can create divides, it can also bridge them. He had seen books distributed via Mxit, a mobile social network with 10 m users in South Africa, but he felt that he needed a lower tech solution because 65 percent of South Africans do not have access to the internet, according to recent census data. In the South Africa media and technology site Ventureburn, Attwell said:

African countries have very few bookstores and ebooks are spreading very slowly. Photocopy shops, however, are everywhere, and in most places in Africa, they provide an important social function by photocopying books that people need, but can’t find or can’t afford to buy. Paperight was started to help legalise that process.

Copy shops may not be the sexy end of technology. They are very much 20th Century technology rather than the shiny, cutting edge technology of smartphones, smart TVs and tablets. Instead of trying to convert potential readers to new habits, Attwell decided to tap into existing habits.

The idea also has a hook for publishers. Before Paperight, publishers would see the copy shop activity as piracy and lost sales. Paperight delivered a way for them to convert illegal activity into legal sales. With this compelling case, Paperight has already signed up 40 publishers and offers 1400 titles, including text books, study materials, literary classics, magazines and even sheet music. The start-up first approached copy shop chains to grow their distribution network as quickly as possible. The barrier to become a Paperight outlet is low. Copy shops only need to go to Paperight.com and register their shop. Paperight is now available in 145 outlets in South Africa.

To purchase materials from Paperight, all a customer needs to do is to go to a participating copy shop where they can search Paperight’s catalogue of materials to see if they have the book or other material he or she wants. In addition to the cost of the licence for the material, the copy shop also includes their own costs to download and print it out in the price. The buyer pays the copy shop, and then the shop pays the publisher.

Ubiquitous copy shops are not just a South African phenomenon, and Attwell told Publishers Weekly, “We designed Paperight to be an international business.”

Print and digital delivery for long-form journalism

Paperight was just named a winner at the O’Reilly Tools of Change Startup Showcase, and while the company’s primary focus is to make books legally available via nearly ubiquitous copy shops across South Africa, long-form journalism groups are already seeing opportunities with print-on-demand services like Paperight. For news publishers, the easiest way to think about this is that it is much like news groups selling long-form journalism on Amazon’s Kindle e-reader packaged as Kindle Singles.

South African non-fiction publisher Mampoer Shorts publishes non-fiction pieces for e-readers, tablets and print out. It describes the content as “shorter than a book (but) richer than an article”. It describes its mission as:

We proudly bring long-form journalism to South Africa. Our unique and novel reading experience will change the way your read for ever. Read the best journalism on any device, and see how South African writers and journalists can blow your socks off!

The shorts are available on a number of tablets and e-reading platforms as well as print-out. It shows how multi-platform digital and print delivery can deliver your content to your audiences regardless of how they want to consume it. The key issue here is making the process cost effective for you, but Paperight shows that services are developing to meet this need and allow you to tap into existing consumer behaviour.

The report looks at a range of smaller, local publishers rather than the big national and international news brands. The smallest newspaper, the Columbia Daily Herald in the south central US state of Tennessee, has a circulation of 12,744, and the largest of the media groups was The Deseret News, with a circulation of 91,628, in the western state of Utah.

While the transition to digital media can seem like an unending stream of grim headlines, it’s good to see forward-looking industry leaders starting to develop new business models to support journalism. There is no one-size-fits-all solution, but we’re seeing these leaders create unique models to meet the challenges and take advantage of their specific audiences and markets.

Diverse strategies for diverse audiences and markets

Before digital, the model for a successful media business was relatively similar. For print, it was a mix of subscription revenue plus various types of advertising including display and classifieds. About the only difference in the model between markets was the mix of subscription and advertising income. The US market was heavily reliant on advertising. Digital advertising has grown rapidly in the US, but US newspapers have been unable to grow their percentage of digital advertising. It is one of the reasons that the newspaper business has suffered so greatly, especially after the financial crisis caused a near collapse in print advertising.

Successful business models are emerging, but they are specific to their particular environment. There is no one-size-fits-all model but rather a number of strategies that reflect the diversity of audiences and markets for these newspapers. Here are some of the strategies.

Develop niche content – Just as the business model was much the same before digital, the content model was also broadly similar, and apart from language, this model was more or less the same around the world. That model is also changing. The report found that success with digital content often involves developing niche, specialist content beyond the broad categories of business, sports and lifestyle that have been traditional non-news content for news organisations.

The small Daily Herald has “rolled out more than a half dozen new revenue ideas in 2012 alone, some in print, but most in digital,” the report said. One of these strategies was developing a monthly health magazine and a “men’s lifestyle magazine”. They have done this despite having a small staff, and the health magazine has been “very profitable”, according to the publisher at the newspaper.

The Deseret News is based in Salt Lake City. The city is the capital of the Mormon religion in the United States, and the Deseret News has always served that community. However, CEO Clark Gilbert, a former Harvard Business School professor, said:

in a world of the web when you are a click away from something better, you have to be differentiated…You can’t do everything. So I am getting out of anything I’m not the best at.

Clark re-positioned the paper to serve the Mormon community. To do that, one of the six core content areas they focus on is faith and family. He said:

We want to own faith and the family the way the Washington Post owns politics.

He sees an opportunity to serve the Mormon community not just in Salt Lake City but nationally. He launched a national Sunday edition, which has helped increase Sunday circulation 90 percent. They also launched a text and video syndication strategy that Clark says “will perhaps be our most compelling form of long-term reach”.

Multi-platform sustainability – As we’ve said, multi-platform sustainability – developing content and revenue strategies that embrace both traditional and digital platforms – will be one of the major themes for the Knowledge Bridge this year, and The Deseret News is pursuing this model successfully. Their revenue mix includes 40 percent from television, 35 percent from print and 25 percent from digital. The Deseret News CEO makes one of the best arguments for a multi-platform strategy that I’ve heard.

In Gilbert’s theory of media evolution, the Deseret News print product is the crocodile, a prehistoric creature that survives today, albeit as a smaller animal. He believes the News, which has already shrunk significantly, is not doomed to extinction if properly managed. Deseret Digital Media is the mammal, the new life form designed to dominate the future. Armed with graphics, charts and a whiteboard that looks like it belongs in an advanced physics class, Gilbert speaks with the zeal of the cultural transition evangelist he has become. He argues that the path ahead does not involve merging the crocodile and mammal cultures, but maintaining them separately.

The results of this strategy are tangible. Digital media revenue has grown on average 44 percent over the last three years and will make up 50 percent of group revenue by 2016, according to Gilbert.

Manage print and digital separately – This was a key lesson not just at The Deseret News but other successful papers in the report as well. The smaller papers did not manage their print and digital businesses separately, but Gilbert believes that this is key to transforming the business. His two-step transformation strategy includes both repositioning the existing business but also in creating “a separate, disruptive business to develop the innovations that will become the source of future growth”.

Gilbert not only believes that it is important to manage print and digital separately, he also believes that to manage digital, it is important to bring in people from outside the newspaper industry. Gilbert himself is an industry outsider, and he hired people from digital companies such as Yahoo! and e-commerce site Overstock.com.

Create a “digital agency” – Two of the four examples in the report created an entirely new business, a digital agency that sold digital services to advertisers and others in their communities. The Columbia Herald in Tennessee and the Santa Rosa Press Democrat in California have both pursued this strategy. In Columbia, the agency builds websites for merchants and provides social media training. Santa Rosa, being a larger paper, has a fuller range of services, offering not only web development but also e-mail marketing, video production and search-engine optimisation services. As of January 2013, the Media Lab in Santa Rosa was providing a quarter of all digital revenue, and revenue at the agency is projected to grow 60 percent this year.

Operate a culture of nimble risk-taking – All of the leaders of these papers showed not only vision but were able to inspire necessary cultural changes in their staff. Dave Neill, the publisher of the Naples Daily News in Florida, said:

We are afraid. We need to be fearless.

Even the small Columbia Herald was able to foster and develop new products and revenue initiatives. The report said, “they see the ability to continually produce new projects as integral to the organizational DNA and central to the paper’s ability to survive at a time of harsh economic conditions.”

Print is not dead – Print has suffered decline but, as Gilbert puts it, while the business is smaller, it isn’t dead. It just needs to be managed well. In some of the markets, print remains strong, and the successful strategy involved protecting the print business. The newspaper in Naples is in a relatively wealthy retirement community in Florida. Older Americans still read newspapers so it wouldn’t make sense to pursue some of the digital strategies that the other newspapers are using.

Leadership – What comes through loud and clear throughout the report is that to develop these strategies, it took a clear vision and strong, inspirational leadership.

the leaders at these papers are risk-takers who concluded that the biggest risk was not rethinking their business models.

The change necessary is not trivial, and the report said that it took perseverance to get the buy-in necessary.

Indeed, 10 of the 13 newspaper executives interviewed for Pew Research’s March 2012 report [the original 40-newspaper report] identified internal tensions between the legacy and digital cultures as the biggest challenge to business success.

However, getting people to accept change is easier when you can point to success, and this report delivers that. Once you’re armed with some successful strategies, then it is down to execution, and as Gilbert says that strategy is only ever 49 percent of the solution. He added, ” For us to get where we want to go will require execution at the highest levels.”