Unique audience for newspapers going down (and a lot) according to Google trends... and not only in the US

What is really going on with newspaper sites?

I was doing some research for a client of ours about unique visitor trends for newspaper sites. I had in mind some Nielsen numbers (US). So, I was thinking that things were pretty good. Even, and you know that, if I have MUCH doubt about the accuracy of their numbers.

So, doing my research, I found this interesting post "Visualizing the decline of the destination web, the rise of the social web". A post that tries to demonstrate that brand destination sites are at risk and are losing audience. The guy is using a tool that we use too: Google Trends labs. A tool that measure essentially part of the audience of a site from Google. You type the URL of a site (like: http://www.nytimes.com, in my example) and you have a good idea about traffic trends for the site. Then, for more details, you can click at the bottom on "Get more information..." (ie: nytimes). You're in Google Ad Planner.

So, I decided to check on traffic for some newspapers in the US. I was VERY surprised.

For example, since the October 2008 election and according to the tool, the NYT has lost more than half of its UV from Google. They are even way below its traffic in July 2007.










Then I did the same for 10 other ones (click on their name to see the Google graph):
1- Washington Post
2- Miami Herald
3- Los Angeles Times
4- Boston Globe
5- Detroit News
6- Chicago Tribune
7- Seattle Times
8- Las Vegas Sun
9- Chronicle (Houston)
10- Philadelphia Inquirer

To make it simple, the trend is about the same for everybody but Las Vegas Sun. They are losing a lot of UV/Google juice at least since October 2008 (some before). While I understand that the election has been driving the traffic up, the story that those numbers are telling is quite different than the story from Nielsen about the increase of unique audience for newspaper sites. And the disconnect is not small.

So, I decided to have a look at news sites in Canada, in France and in the UK. Just to see if the trend was somewhat different.

Canada
1- Globe and Mail
2- National Post
3- La presse
4- Toronto Star
5- Vancouver Sun

Same story, they are losing UV and a lot for most of them, except The Vancouver Sun.

France
1- Le Monde
2- Le Figaro
3- Libé
4- Ouest-France
5- Le Parisien
6- La Voix du Nord

Here the story is a little bit different but the traffic is not going up. Often flat. It is not as bad as in North America. Except for Libé and Le Monde that are losing a lot of UV.

UK
1- The Guardian
2- Telegraph
3- Times Online
4- The Independent
5- The Scotsman

According to Google Trends, they are also losing a lot of UV. Some as much as in the US.

So what is going on with online news? And what is the value of Nielsen measurement?

Did we reach an audience cap already? Is the number of players making it more and more difficult to grow UV? Working with Jeff Jarvis on the project New Business Models for News, we have been surprised by the very high market penetration that most of the local news sites enjoy today.

So what is next? How do you explain those Google numbers?

Advertising: the customer data war

20% of ad spending on social networks are from local advertisers, according to Borrell Associates in a report dated July 12th. They are forecasting that: "local advertisers will account for about $641 million of nearly $3.3 billion this year trying to reach consumers via these sites".

This Monday, Josh Bernoff, VP-principal analyst at Forrester Research, wrote: "In this recession, marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent." Following the findings of the IBM study: Beyond advertising. Mansha Daswani wrote about it, in Worldscreen.com, "To succeed—especially in the current economic environment—media companies will need to develop a new set of capabilities to support the industry's evolving demands which include micro targeting, real-time ROI measurement and cross-platform integration." [...] "Advertisers are following consumers to new platforms; the study indicates that 63 percent of global CMOs expect to increase interactive/online marketing spend while 65 percent expect to decrease traditional advertising."

My partners and I have been warning traditional media companies that the advertising business was shifting from a brand awareness paradigm towards a ROI/data driven paradigm. That we could not assume that advertising was going to subsidize media for ever, at least the way it does it today. Outsell Inc, in a recent study, predicts that "$65 billion will be siphoned away from traditional advertising channels in 2009 and spent instead on companies' own Web sites and Internet marketing" (source : Forbes via Éric Scherer).

Traditional media companies have to enter the "customer data war" if they want to keep attracting advertising dollars and compete in the interactive marketing world. Or they are going to have to partner with companies that have the customer data. The Yahoo! deal is leveraging this idea. But, when 80 to 100% of your business is advertising driven, don't you want to own the data?

It is one of the main issues that traditional media brands are facing: how to stay relevant for marketers/advertisers? This is the war to win to stay in business. Or it is going to be necessary to find new ways of subsidizing information while downsizing the newsroom. One source will not be enough... and readers will not cover the advertising revenue loss.

FYI: Study Finds Correlation Between Social Media and Financial Success (via Richard Ting)

Verizon sucks... Time Warner Cable sucks too

I am trying to get Internet in my office building, in NYC. Not in the middle of nowhere in a third world country. First problem, the only provider is Verizon. Second problem they don't offer fiber optics in my building. Then, the only speed they have is the slowest one. Like in my previous building. Which is 1.5 MB. And, on top of that, they need ten days to install it. This is the MIDDLE AGES. Verizon just sucks. So I decided to cancel.

Update: I tried to get Time Warner Cable. They need two weeks to figure out if it is worth it to come to my building. Then, they are asking me to answer questions about the building. Yep! I need to do their job. And, if the answer is positive, they need 12 weeks to install my connection. Time Warner Cable sucks too. Bye!

Looking for an experienced online sales rep

Maker Media (Make magazine, makezine.com, craftzine.com, Maker Faire) is looking for an experienced, tech savvy, sales rep to sell web based ad sponsors and multi-platform integrated programs. Makezine.com has 2 million uniques and growing. Great opportunity. Job based in NYC.

PLEASE NO PHONE CALLS, SEND ALL INTEREST TO: info (at) mignon-media (dot) com.

Video chats about advertising, twitter, blogging and media issues

At the beginning of May, I was invited to discuss media challenges with a group of German journalists and political people. They were in the US participating in the International Visitor Leadership Program, organized by the Bureau of Educational and Cultural Affairs.

The TV journalist Richard Gutjahr filmed a small part of the conversation and posted two videos on YouTube that I just discovered (not YouTube, the videos ;). So here they are.





Today, I spent a few interesting hours with Michel Levy-Provençal (head of multimedia at the French 24 hour TV news channel, France 24), Karine Broyer (editor of France 24' website) and Vincent Roux (editor of the international French radio channel website: RFI). Here is another video (in French).



Disclosure: We consult for France 24 and RFI.

Charging for online content? New updated figures for newspapers with a circulation of 50K

>> New updated online spreadsheet
>> Excel file version

In partnership with the NAA (Newspaper Association of America), and the help of Borrell Associates, AdPerfect and Centro, we have put together a new updated spreadsheet exploring different scenarios for paid online content for 50K circulation newspapers. We have run numbers on scenarios ranging from fully paid to mixed paid / free.

Our previous and first post showed 9 different possibilities for paid online content scenarios for a 100K circulation newspaper. We based this first set of numbers on an average of publicly available and proprietary data from North American newspapers (some of which are our clients). This set of scenarios was just a first step in running numbers to take a look at the possible revenue generation.

In this post, we run numbers for a 50K circulation paper to be closer to the average US newspaper.

Key assumptions:
* 50,000 print subscribers
* $17 / month for the print version (7-day)
* Website with 250,000 UV and 2.5M PV
* $12 display ad CPM
* $4.50 local remnant ad CPM
* $0.95 national remnant ad CPM
* 5% unsold inventory
* $.20 CPC with .36% CTR for contextual ads
* In this version we have also introduced a subscriber acquisition cost of $49.18.

For an approximation of the current online revenue based on the above assumptions, the online revenue is a little over $700K.

Then we ran the numbers for the following scenarios:

1st scenario:
No more print version. All print subscribers are subscribing to the website that is 100% behind a paid wall. NOTE: It is highly unlikely that 100% of existing print subscribers would sign up for the web version.We are just demonstrating what could be the potential maximum revenue if all 100% did at HALF the print sub price.
Revenue = $5.2 M

2nd scenario:
Great direct marketing campaign resulting in 2% of current UV subscribing to the website. 100% behind a paid wall. They pay the same price as the print version. For all of the following scenarios, the print version still exists.
Revenue = $1.0 M

3rd scenario: Same assumptions as scenario 2, except the subscription price is halved to $8.50 / month.
Revenue = $524 K

4th scenario: Same assumptions as scenario 2 and 3, except the subscription price is again halved to $4.25 / month.
Revenue = $269 K

5th scenario: Direct marketing campaign resulting in 1% of current UV subscribing to the website. 100% behind a paid wall. They pay the same price as the print version.
Revenue = $517 K

6th scenario: Same assumptions as scenario 5, except the subscription price is halved to $8.50 / month.
Revenue = $262 K

7th scenario: Same assumptions as scenario 5 and 6, except the subscription price is again halved to $4.25 / month.
Revenue = $135 K

8th scenario: Mix of free and paid models. 60% of the site's content is free. There still are 250K UV. 1% of these UV subscribe to the paid part of the website for $8.50 / month.
Revenue = $686 K

9th scenario: Mix of free and paid models. 80% of the site's content is free. There still are 500K UV. 1% of these UV subscribe to the paid part of the website for $8.50 / month.
Revenue = $828 K

You can see these updated figures on my spreadsheet (on the 2nd tab named "50K circ"). You can also download the excel file to play around with the numbers.

As mentioned in the first post, we didn't take into account the cost side (with exception of the introduction of the acquisition cost per subscriber). However, none of these scenarios would cover the actual costs of newspaper operations. In our next iteration, we will factor in the cost side to take a look at net revenue. It will be another one of the critical factors on the end-decision of whether or not to go paid.

If you think something is missing or doesn't make sense, please comment. Also, if you have any suggestions, feel free to let us know. We're always looking to improve upon the analysis. Please email me at anytime at nwang (at)mignon-media (dot)com.

A big thanks to Beth Lawton at the NAA. Thanks as well to Gordon Borrell of Borrell Associates, Inc., Sean McDonnell of AdPerfect and Shawn Reigseker of Centro for their assistance.


More to read:
- Paying for online news: Sorry, but the math just doesn’t work. (Martin Langeveld - Nieman Journalism Lab)

Media and advertizing challenge (2): IBM study reveals a "growing rift between advertisers, consumers and content owners"

Following my previous post on how it is going to be more and more challenging for media to keep their advertising revenue, IBM just published a study insisting on the "growing rift between advertisers and content owners, media distributors and agencies". (tx to Eric Scherer)

In Wordscreen.com, Mansha Daswani writes: "To succeed—especially in the current economic environment—media companies will need to develop a new set of capabilities to support the industry's evolving demands which include micro targeting, real-time ROI measurement and cross-platform integration." [...] "Advertisers are following consumers to new platforms; the study indicates that 63 percent of global CMOs expect to increase interactive/online marketing spend while 65 percent expect to decrease traditional advertising."

Full article
IBM report

Why is it going to be increasingly more difficult to subsidize news with advertising revenue?

The challenge that journalism has always been facing is to be financed. The cost of information has never been fully covered by the end customer. Revenue sources vary by media and by countries. Today, advertising is the main -- and very large -- source of revenue. But, governments, special interest groups, readers (for print), foundations..., also contribute to the financing of information.

Businesses need to advertise their products and services. Media offer a vehicle that can display the ads. Either they offer mass-market reach or niche reach (local or specialized). Advertisers buy eye-balls hoping that some of them will be customers. Media, using polls, study their customers and build their sales pitch around it. They offer a limited amount of space (time or number of pages) and sell this scarcity to the advertisers.

Digitalization is fundamentally changing the game.

1. Media no longer have the monopoly of offering a platform to display ads. Any website can display ads. Why promote the release of a new DVD on a newspaper site and not on the Target site?
2. Scarcity does not exist anymore. There are no limits to inventory space. The limit is on the advertising side. There are just not enough ads to finance everybody. When scarcity does not exist anymore, prices (CPM) go down.
3. Data collection is the name of the game. Before, it was difficult to collect information about customers. It is why we were using a lot of tools based on polls. Today, polls are in competition with real data collection. Why use polls when you can track the habits of each customer one by one, compile and analyze them? Today's data are much more precise than yesterday's polling data. Pages are talking to pages. Data are being linked. Devices are starting to talk to each other. The Internet is becoming this huge machine, as Kevin Kelly is explaining at this Ted conference in December 2007, full of information about each one of us. Question : how much data are we willing to give away? The privacy limits are probably going to be decided by the legislators.

In the conferences I give, I love to say to media executives, "we are not any more in the news business, we are in the database business". Know your customers. Then anticipate and serve targeted information and news content, and targeted commercial messages.

When you are losing, step by step, your monopoly of serving ads... When the price to advertise is going down... What do you need to offer to stay the best advertising vehicle? You need to offer the best ROI. In other words, you need to move from an eye-ball logic to a transaction logic. And you'll get your dollars if you are able to prove that your vehicle helps to increase sales.

I know ! It is tough because all of a sudden you become somewhere responsible for the quality of the advertising and the quality of the product/service. It is a total paradigm shift. The total nightmare for the media and advertising business. But, Google, with CPC and CPA based ads, has already been changing the game. A few words online (ad-word campaign) can have better ROI than a very sophisticated and expensive ad on TV. Tough times.

Not only does the media need to display ads, but also they need to show to the right person. And on top of that, the right person for a business is a person that buys the product or service advertised. Bottom line is that businesses need customers. The winners will be -- are -- the ones providing the best engine to get those customers.

So, if news organizations still want to finance their operations with advertising dollars, they need to ask themselves : "Are we in the data collection business?" If the answer is no, your chance to survive, with an advertising model, in the medium-to-long term is close to zero. And if advertising revenue dries up, who is going to subsidize the information?

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Example of what you can do: Geo Segmentation: Add ZIP To Your Email

Le Post (2): a successful and innovative news site that mixes pro and am content

You asked more questions about, the French news site, Le Post. Thanks. I tried to summarize them and asked Benoît. So, here is the update.

What do you think you're doing right that explains the success of Le Post ?
BR: First of all, flexibility is our religion. We are always experimenting with new stuff and failure is part of the deal. We are building the site brick by brick, with small projects that we test and can quickly stop if they are not working. Our site is organized around three concepts:
1- We are using the strengths of network and viralness. This way, we can be up to speed quickly on news or information that starts buzzing.
2- We take advantage of the fragmentation of information. We are not focused on the home page and we consider that each page is a potential HP. Also, we work the content with the SEO in mind.
3- We are taking care of our community. Readers are major contributors, so the content reflects their interests.

What is your secret (if any) to have amateurs contributing?
Once again, we take great care of our community. All our journalists are community managers. They manage, stimulate and provoke, non stop, the am. They are engaged in a permanent conversation with the community members [remember there are six journalists for 25,000 members].

What type of subjects are am contributing the most ?
In order: politics, crimes and accidents, web/buzz subjects, montages and collages with news content, and testimonies.

Le Post : a successful and innovative news site that mixes pro and am content

If you're not French, or francophone, there is little chance that you have heard about the French news site : Le Post. The site has been launched a little bit more than 18 months ago, by le Monde interactif, publisher of lemonde.fr, the website of one of the most famous newspapers in France, le Monde, and the largest general news site in France.

According to Nielsen, Le Post had, already, an audience of 2 million in November 2008, more than 7 million visits according to the OJD (the equivalent in France of the audit bureau) for January 2009. Pretty impressive for a new site.

Le Post is a news website, covering national news. For many, it leans more towards the "tabloïd side". It is true that its content, its tone, its look and feel are very different than le Monde. But, its main difference comes from the way the content is produced. It is a mix of pro and am.

Benoît Raphaël, the editor in chief of Le Post, gives us some details about a site that I think is one of the most innovative news sites produced by a media company in 2008. It should break-even in 2010. Not bad at all.

The uniqueness of Le Post is that the content is produced by pro and am. How many professional journalists in the team?
BR: We have one editor that manages the newsroom of nine journalists :
- 4 specialized (crime and accidents, politics, media, internet),
- 2 at the desk (in charge of the HP, aggregating content, organizing the news in different formats in order to make things easy for the readers and animating the conversation),
- 1 video journalist in charge of non-stop "zapping", a video "collage" from different sources,
- 1 coach journalist in charge of the community. Among his work is to check the information sent by the citizen-journalists, look for witnesses, etc.

How many amateurs contribute to the site?
Our community has 25,000 members. 1% produces content and a 1,000 are very active. Among the active, you have what we call "guests". They are bloggers and columnists that are paid on a revenue sharing basis. Amateurs send 400 to 500 contributions and write 6,000 comments a day.

What is the rest of the team?
- One editor in chief (me),
- one product manager,
- one marketing director,
- one ad sales representative,
- two developers
- and we are sharing some other team members with lemonde.fr

On average, what is the percentage of content produced by pro versus am?
It is 10% pro, 90% am. In other words, we publish 400 am articles a day versus 40 from pro. But, it does not mean anything because in fact the newsroom really takes advantage of the community, reacts to what they are sending, checks and updates information. The majority of the articles that appear on the HP are a mix of pro and am. In fact, our goal is to co-produce the content, not to have on one side the pro and on the other side the am.

Do you double check am content?
We do double check the am content that we publish. Absolutely.

How do you proceed?
We have put together different processes. All the content is filtered, a posteriori, by a team of moderators. We want to make sure that there is no illegal content, that am follow our guidelines and that they are not propagating rumors. Then, the newsroom also looks at it. The coach goes first, then the specialized journalists. Each journalist manages a small community of am that he trusts. So each interesting content that we receive is checked according to our techniques of "fast fact checking" that we have developed.

What do you mean by "each journalist manages a small community of am"?
Active amateurs help us to collect and add value to information by proposing smart angles, aggregating, finding witnesses, etc. They are also "the eyes of the newsroom". They are following the news for us, on print, tv, radio, news sites, but also blogs. They are sending us valuable links with quotes.
And sometimes, they are helping us on fact checking. It is because of an amateur that we have been able to figure out that a video about Gaza was a fraud. France 2 (the French public television chanel) published the video without fact checking it.

What is the job of a journalist at Le Post?
He is, at the same time, a news producer, an aggregator and a community organizer. Because of the way he approaches information, he is first a network journalist. He checks first what has been said and published in other media. He aggregates the best content from different sources, including blogs, Twitter, You Tube, etc. and traditional medias. Then, on some of them, he brings complementary information, new elements, adds value and fact checks. Even the news published by other journalists.
The newsroom of Le Post looks like the one of a radio station. The information is a permanent conversation that is built step by step by the community of am and the journalists.
Each journalist is also in charge of a small group of active amateurs. He is their coach and teachs them the basics of the journalist job, tries to encourage them and even meets them in person. He understands that information is a conversation. He does not produce an article but more a process.

How much does a journalist make?
They are new and young journalists, so they are making the minimum salary for the job.

How about amateurs?
Only guests make some money. As I said, we have a revenue sharing system (50/50) and we guarantee a minimum of around US$500 (350 euros)/month.

Are you making money?
Not yet, but we should break-even next year.

(Disclosure: Benoit is a friend. I have worked with him right before he became the editor in chief of Le Post. We launched together (and with other talented persons) the very successful site for the French presidential election: quelcandidat.com. It was for the local newspaper Le Dauphiné Libéré. Mignon-Media also worked for the new formula of Le Monde, a few years ago, rethinking and reorganizing the informational graphics department)