Forget the cheerleader: Save the business, save the craft

This is the first of two parts of my observations from The Midwest Newspaper Summit held Sept. 17 in Dubuque, Iowa.

While a good recap of the summit was handled by Steve Buttry, what follows is a perspective of the business side of community newspapers, which makes up the vast majority of newspapers in the United States.
To some, what I'm discussing may seem rudimentary and for that I apologize for not moving the issue forward. However, a number of community newspapers haven't had this dialogue yet and this is aimed at them.
This first installment is focused on options to "Save The Business."

It must have been a pleasant surprise for the seven press associations, organizers of the Midwest Newspaper Summit.

Originally, they had anticipated about 50 attendees. About 270 showed up for the event and about a third of them were news publishers or owners.

That last point I found significant. Prior to this, the discussion on the future of newspapers has been filled chiefly with journalists (some still employed), academics, social media advocates, techies, analysts and consultants with a vested interest in the gored ox.

Except in the rarest of circumstances (such as Howard Owens of theBatavian.com), what I found missing in these exchanges were the people who would be charged with making any answer a reality -- the publishers and owners; in other words, the very people charged with paying the bills.

The gathering in Iowa consisted of representatives from small- to medium-sized newspapers. Again, this is significant because to date the focus has been on the largest of the news organizations as though only they have the wherewithal to make change happen, setting aside the tactical maxim that PT boats move faster than battleships.

That's not to say non-metros have been waiting on the sidelines. Some experiments are under way the best and most challenging of which is at the Cedar Rapids Gazette with its Complete Community Connection. But even there change is "hard" and "messy." We'll come back to that later.

As a couple of speakers noted at the Newspaper Evolution summit in Iowa, advertising in its traditional form (ink on paper) is still needed at least in the short run because that's where the vast majority of the revenue is coming from -- yes, even today. However, there can be no question there has been a tectonic shift in marketing that challenges the very business models upon which we rely.

So many news executives approached the meeting wanting to learn more of the opportunities.

One option that was both interesting but, in my opinion, impractical was presented by Jennifer Towery of the Peoria Newspaper Guild called the L3C, an initiative covered rather thoroughly by Huffington Post columnist Sally Duros. L3C is an untested model centered on establishing a low-profit limited liability organization with social benefit as its goal. Its funding source is akin to that of a foundation but in this case the community (read both readers and advertisers) will own shares of the newspaper. (If you thought having family owners of your newspaper were tough to keep happy, imagine editors wrestling with advertisers as shareholders questioning news coverage, play and emphasis.)

One publisher for a large Midwest newspaper tuned out during this discussion because he said he didn't see any owner wanting to become non-profit; that's not in their DNA. While it may be one answer for saving the jobs of journalists and has aspirations of saving the craft of journalism, it doesn't save the business simply because there will not be enough takers.

The most intriguing of options came from Alan Mutter, famed for his blog Reflections of a Newsosaur. He proposed a set of revenue streams including assisting advertisers with SEO/SEM (which Mutter says is an enormous opportunity for newspapers), interactive fees (paid content), online Yellow Pages and direct marketing.

His hypothesis is by 2014 the revenue breakdown will be:

-Niche 48%

-Traditional 15%

-Search & SEO 16%

-Premium (paid) content 21%

That's a pretty big leap from today where traditional advertising revenues coming from print (including magazines and TMC/shoppers) are closer to 55% or 60%.

Online niche is working to some degree now with examples from Gannett's Moms Like Me blogs or print/online combos like Go! in Lawrence, Kansas. These are successes both with users and financially. Mutter also pointed out Tween Tribune now being used by my parent company CNHI in Valdosta, Georgia.

Now, if you believe as I do that a good chunk of advertising is shifting from mass to targeted/relationship models, then there is some appeal to Mutter's formula. Content, messaging and relevancy have become more personal and we need to adopt our business models and our content gathering to reflect this information processing to fully exploit both push (mass) and pull (target) advertising.

But what was not adequately discussed in Mutter's approach was how to bring it to market. While SEO may indeed be the best opportunity, Mutter knew of no newspapers presently doing this. And therein lies the rub. Talking with other publishers you could sense a frustration not only for what could be but for what is. "I can't get my sales staff now to go beyond selling what they've always known."

This is critical. With all the debate swirling around new business models, paid or unpaid content, niche products, free standing pubs or increased elitist pay structures, the fundamental point is -- what kind of sales force do we need to bring this to market? In other words, do we have the infrastructure ready to sell it? And, in the same vein, are our traditional graphic services departments ready to transition to the next generation of advertising appeal?

Here's a quick test for publishers to understand the baseline:
-How many of your sales people have a Twitter account? Facebook? LinkedIn?
-How many understand the importance of SEO? How many can even explain SEO?
-Or how many know how to read the analytics of your website to explain it to their accounts?
Another quick test: How many new social media marketers are in your area talking to your advertisers about how to get a piece of the new relationship market? Better yet, would your advertising reps recognize advertisers that are being wooed by these marketers? My guess is not.

And how will that lack of knowledge or confidence be understood by advertisers who are following trends or heard a sharp presentation from a social media marketer? It will undermine your sales reps' ability to provide marketing solutions to businesses that are searching for answers.

So why not get better sales reps? For one, reports are reinforcing an image that newspapers are dying, so talented sales reps aren't necessarily attracted to us.

Secondly, compensation typically rewards reps who bring in bigger dollar accounts especially if they are working on commission. Consequently, if you sell a full page advertisement versus an online banner ad, you will get more money for selling the print ad.

While Mutter's solution is to train your existing sales people to sell such things as SEO while selling ink on paper is great in theory, it will stumble in the execution under our present traditional arrangements.

We need an increased emphasis and some fundamental changes in how we operate to break through these barriers.

Separation of revenue income streams as described by Mutter will require special talents and leadership.

First examine the qualifications of your sales managers. Do they understand target marketing? Social media marketing? (They are different.)
Are they comfortable explaining, for instance, the different demographic attractions to sections of your newspaper?
Can they articulate a profile using Claritas, for example, to identify who your readers are and explain how those profiles work best with your advertisers targets?
This is fundamental.

Let's say you have the right leadership. Now examine your sales force. If they are lacking in the understanding of the multimedia model, you either can replace your entire staff or add to your existing staff. Let's examine both options:
(1) Replace the staff: If you can find someone who understands and can sell SEO or direct marketing, teaching them to sell print is not a great leap. Makes sense? Sure, and you might be tempted to do just that. But this is most disruptive not only for your advertisers but the whole production stream if done en masse.
(2) Add to the staff. One practical application would be to bring in a specialist who can sell SEO assistance, understands direct marketing and has figured out how to monetize a Twitter account. Make the specialist a champion with an account list but also reward them for making four-legged calls with existing reps with sold multi-media packages.
However, this is a temporary fix. The sales rep of the future must have a full understanding of how each of your marketing products work best for the advertiser.

In either case, you will need to match up your position description for sales reps to the pay-for-performance measurements tied to your strategic goals. For instance, are they expected to present a certain number of multi-media packages to advertisers?

Does your compensation structure include a bonus for multimedia sales presentations? You also may want to structure it so a full compensation plan is not fulfilled unless a multimedia presentation has been made.

Personally, I feel we have a moral obligation to train those willing to learn more about the targeted nature of relationship marketing and transcend to social media marketing and how both fit into the overall marketing picture we can provide. We need brown-baggers to explain how Google AdSense works, how to effectively use a Facebook page, show relevant uses for Twitter. If you have a university nearby, bring in someone who understands and can teach SEO/SEM, public relations strategies and is on call to test projects you may be considering.

After this you will learn who your adapters are. If they are either unwilling or unable to learn, then our obligation is to find those sales reps -- and managers -- who will learn.

Another tactic to consider and something we've begun doing at The Free Press: When was the last time you had a little one-on-one with your advertiser, asking if an ad had the desired effect? Did it increase foot traffic or word of mouth or awareness? Was an expectation for the advertisement discussed? If nothing else, this conversation can lead to a discussion of targets and how the message should be crafted -- and what medium (or social network) to use to reach those targets.

Until this culture becomes second-nature in your sales departments, it will be hard to execute any shifts to different business models no matter how passionate you are about change.

NEXT: How newsrooms can help save the craft within the business structure.