Vouchification

Announcing the Chicago Independent Ad Network, a powerful new channel for advertisers to reach Chicago’s most civically engaged and influential readers. Composed of fifteen, local high-quality news sites, the Chicago Independent Ad Network is a digital-only network providing over one million monthly guaranteed impressions.

Managed by Brown Line Media, which already publishes three North Side neighborhood news sites, Center Square Journal, Roscoe View Journal and Edgeville Buzz, the ad network is one more way local businesses can target and communicate with the most influential consumers in Chicago.

Every publisher in the Chicago Independent Ad Network serves up the same size ad, 300 x 250 pixels. Also, only five advertisers a month may participate in the network, ensuring their messages stay above the clutter.

The Chicago Independent Ad Network will go live on Tuesday, November 1 across the network, including this site. If you want to reach a citywide audience of influential consumers, check here for a complete list of publishers participating in the network and for our rates.

To reserve your position today, contact Kathy Chapman at (773) 966-2720 or Kathy@chicagoindyads.com

As a publisher, I love Facebook. We post teasers for stories from CSJ and RVJ to Facebook and they bring in almost 10% of our pageviews. But as an average web consumer, I’m losing interest in Facebook. Worse yet, I’m pretty sure I’m not the only one to notice the trend.

Do you have more than 200 Facebook friends? Does the vast majority of your wall feed come from a select group of political-types and daily exhibitionists? If so, it becomes exhausting to scroll through the predictable daily dross from these people. You can block them, but you usually still end up with the most exhibitionist (and usually boring) people on your friend list.

Facebook designed its wall to be this way with EdgeRank, the wall algorithm that emphasizes how long you’ve been friends with someone, how often you message them and how many times you’ve commented on their stuff. EdgeRank naturally binds you closer to the people with whom you interact while crowding out those you don’t.

Trouble is, I want Facebook to surprise me. I want to know more about my far-flung friends, not the ones I interact with every day.

The solution is to beat EdgeRank by seeking out the profiles your neglected friends and to comment on their posts. But that takes a concerted effort. Wouldn’t it be easier and more friendly for me to just send these people an email to ask how they’re doing?

For those of us with lots of friends (I have 700+, but I know plenty of people with 2,000+) Facebook has also lost its intimacy. When you have so many people following you, who are you really sharing the news about your distressing and sleep-depriving IBS problem? Probably an overshare with most of the world, but if it’s keeping you awake at night and interrupting your work day, don’t you want sympathy from your real, true friends?

Facebook isn’t really the place for real intimacy, is it?

Sure, it’s possible to create specific groups of friends, and you can manage which posts go to which groups, but that’s a lot of work. And can you really keep it straight all the time? And man, it seems like Facebook keeps changing the rules, doesn’t it?

It’s simpler to just skip the whole thing and just not share.

Instead, the news we do get about our friends on Facebook are closely-monitored vacation photos, tales of 5 year-olds barfing, rants about the President’s policies and random non-sequitur ponderings. We get to hear that people are alive and doing things, but we’re not really learning anything about them.

It’s this/close to useless junk. “I really should block that person out,” we say to ourselves, “But if I block them, they might find out and that would hurt my relationship.” So instead we’re force-fed a daily litany of superficial status updates from people we already hear from too much.

I wish I could figure out a way to make it stop.

I have read the New York Times steadily, if not daily, since I was eleven and my folks had an ancient paper subscription. At different times I’ve loved it, liked it, been ambiguous.

As I’ve thought more and more about news as a consumer product, I’ve come to consider the New York Times as an entirely discretionary purchase. It is interesting and edifying, but it rarely contains information essential to my personal or professional survival.

When I was a political staffer at the U.S. Department of Energy I hung on reporter Matt Wald’s every word. But now, I really don’t need anything it has to offer. It makes me feel better about myself because after reading the NYT, I believe I am an, “informed American.”

This of course, is hogwash. And over the past week, I have been weening myself from the NYT and discovering more and more excellent alternatives each day.

Have you seen the Al Jazeera You Tube page? Awesome. Juan Cole on the Middle East? Naked Capitalism on economics?

Yeah, yeah. Finding these reliable alternatives is more work than just surfing the NYT website, and time is money, that’s why we pay for it.

I get it. That’s the argument I made to people about Early And Often. Time is money, especially when you’re dealing in scarce information.

But most of what the New York Times deals in is not scarce. You can find a lot more reporting on unique topics in The Economist or the Wall Street Journal than in the NYT.

The New York Times provides branded reporting. People read it because it comes from the New York Times, which signals readers that the reporting is authoritative. This authority derives from a significant portion of American and international decision makers agreeing that the NYT provides a direct channel to other decision makers. It’s like the Davos World Economic Forum of newspapers.

CNN used to be like that. Remember the Scud Studs? Americans weren’t the only ones watching them. They were globally famous.

Now there’s Al Jazeera. Russia Today. Sky News. Fox News. MSNBC. Global television news coverage is no longer scarce. It’s all over the place.

The CNN brand has been diluted by the availability of good reporting originating in other countries.

Clay Shirky pointed out the NYT paywall problem elegantly when he reviewed The Times of London’s paywall experience:

online, the Times has stopped being a newspaper, in the sense of a generally available and omnibus account of the news of the day, broadly read in the community. Instead, it is becoming a newsletter, an outlet supported by, and speaking to, a specific and relatively coherent and compact audience.

Soon, the New York Times will become more like a newsletter, and maybe even a really small one, unless it begins to offer something more than just making people feel like they know more than their neighbor.

If the NYT sinks behind a paywall and loses the vast majority of its audience (a fear that probably resulted in their sieve-like paywall design) it risks losing its position as a direct channel between global decision makers, and thus its authoritative position and thus its brand.

To be successful, the New York Times is going to have to master the trick the Wall Street Journal accomplished decades ago: It’s going to have to convince readers that every issue contains information that changes lives.

In two weeks the New York Times will put up a paywall. Anticipated for some time, now that the day has arrived everyone wonders, What will happen to the Times now?

From what little I know about the Times’ plans – what everyone else knows about the conditions of the paywall and the price points – I’m going to guess that the paywall will have a rocky start but ultimately enough people will pony up subscription fees so the Times will staunch the tide of red ink.

But I have fewer concrete thoughts on the Times’ potential success than on my own experience with paywalls through Early And Often, a subscription-based Chicago political news service Jimm Dispensa and I produced in conjunction with the Chicago News Cooperative.

From day one, Early And Often operated behind a paywall, with some success. Distilled for your reading pleasure, here are some of my lessons learned on paywalls.

1. Publications behind paywalls have consumers, not readers. A paywall forces you to sell a product, not produce writing that you hope people like. This is a tremendous difference! Now that people have to fork over hard-earned cash, your paywalled product will be judged by a much higher standard than those that are free.
2. Paywalls mean you are no longer serving the public good, you are serving customers. This makes customer service, pricing and consistency of product quality especially important.
3. Your product must serve a specific consumer need, not merely inform. Unless your customers believe they get real value by purchasing your product, you will lose paying customers.
4. Know what your target audience wants and focus on it like a laser. If you are producing something your audience is not interested in, you are wasting time and money and losing customers.
5. Many, many fewer people will be willing to pay for your product than you think. You will also need to spend a great deal of time convincing people that they want to pay for your product. It takes time to build an audience.
6. Forget about the size of your audience. Measure your success by the quality of your audience. If you start with a small group of influential or very loyal readers they will support you through thick and thin.
7. Make sure you have a customer service function in your organization. Quick response to billing or access issues means the difference between success and total failure.
8. Keep pricing simple. If you have to explain it, you’re losing customers.
9. Consider your price point carefully. It is better to charge too much than too little because you can always drop your price. Also, you get to a profit faster with a small group of people paying a lot of money than a large group of people paying a little money.
10. People who complain that you are charging too much money will never pay for your product at any price. There are some who want your product but can’t afford it. Once they have enough money, they will buy. This is an important market pressure. It signals quality to buyers. Consider: Nobody ever complains about Ferrari prices. Good paywalled products aim to be like Ferraris.
11. Paying consumers do not expect the most important news to stay paywalled. Either they will distribute it freely without your permission, or you can get ahead of the wave and make occasional high-profile items available for free.

At some point people started calling news a “commodity.” The word implies that information has value but its sources are interchangeable and that all news products have the same value.

This is not true. In fact investment in news products have a clear value-add scale and innovation and investment has consistently gone to either ends of this scale.

News products are much more complicated than say, winter wheat, an actual commodity where one bud is pretty much the same, whether it is produced in Nebraska, Ukraine or Australia.

Commodities are also usually component parts of finished goods, like wheat is for bread. Most news products, on the other hand, are finished goods and as such have distinguishing characteristics. For instance, a Sunbeam bread factory may churn out thousands of identical loaves of cheap white bread every day while your pricy neighborhood baker may produce five or ten dozen loaves of expensive French bread a day. These are clearly are two very different things.

News products can be differentiated by the level of effort required to collect information, assimilate it and present it to the reader in a useful way. This differentiation is the value-add provided by the news publisher. Sometimes the value-add is produced by a technical solution, and sometimes the value-add is produced through reporting and analysis.

The News Value-Add Scale. Click to enlarge.

For instance, once a licensing or access fee is paid to the National Football Association or NASDAQ, any new enterprise can obtain real time pro football scores or stock quotes. There is very little reporting work necessary to obtain it. However, the scores and quotes are probably delivered as raw data, and it is up to the news enterprise to organize the huge volume of football and market information in an understandable, meaningful way. ESPN.com and Yahoo! Finance have created successful news products by presenting this raw data in a well-designed, useful manner.

People read ESPN.com and Yahoo! Finance because they need specific information about narrow topics. These news products serve a clear, specific need, one that is clearly identified by their readers, such as “I need to follow my fantasy football league,” or “I want to know how much money my portfolio made today.”

On the opposite end of the spectrum are investigative reporting news products. Major daily newspapers like the New York Times, Wall Street Journal and The Washington Post market themselves by occasionally producing major, groundbreaking news stories. The resulting stories are heavily marketed with the message, “Read us so you don’t miss the big story.”

Few of these investigative reporting stories will directly affect the newspapers’ readers, the news stories serve to broadly inform and edify. Readers choose news products that focus on investigative reporting not because they need it, but because they desire to be edified.

From a business perspective, it is much harder to convince someone they desire something as opposed to serving a perceived need. ESPN.com satisfies a perceived need. The New York Times satisfies a desire.

The Stuff In The Middle

Between these two extremes lays beat writing. Once the backbone of news products, both the source of many investigative pieces and a way to edify readers, readers now have more specialized sources. For instance, auto columns have gone the way of cars.com.

For example, many daily newspapers used to house at least a dozen reporters who would churn out a story (or two) a day on crime, city hall, the state house, the theater scene, even parks and gardening. The constant search for new things to write about drove beat writers to report on all kinds of minutia. While individual reports were rarely groundbreaking, those who read the beat every day got a good sense of what was really happening in that interest area. Then, when real news broke in a beat, there was a paper trail of stories that served as a research base for reporters looking for the bigger story.

Where do you get that kind of information now? Blogs and single topic websites, like cars.com.

But newspaper columns still sound useful. And for those readers looking for edification on hard news topics, there’s still the Economist and NPR. Yet, the market has clearly demonstrated limited interest in paying for beat news.

Not incidentally, this middle space is where community weeklies, Patch.com and hyperlocals sit.

News Innovation Investment

News is a mature industry and as such, its innovation has been not in providing new kinds of news (although that mantle is sometimes claimed by social networking) but by added speed and complexity through new mediums, print to radio to television to 24-hour cable to websites, and so on.  For years news product innovations have been technical, allowing large sums of information to be assimilated and made understandable in ways they never were before.

Twenty years ago Bloomberg terminals were the biggest technical news innovation. They organized large sums of data in a quickly referenced and understandable way. Since then, most news innovations have been variations on Bloomberg’s accomplishment. Yahoo! Finance, ESPN.com, even Everyblock.com are efforts to compile data and redistribute in more efficient ways to those who need to find a needle in the data haystack.

“Is it scaleable?” is the question pushing most innovation efforts, since financiers want to know that their finance risk has a high possible return, in the millions of dollars. Scalability is why most news efforts to date have focused on national news products, and preferably ones with low overhead. The Huffington Post’s recent $315 million price tag is remarkable when one considers that its total paid editorial and sales staff are around 100 people.

Viewed through this lens, financiers will continue to look for the big, national news play with a high potential return.

As we look at the news value-add scale, items on either end of the scale are the ones most likely to receive national attention: big, blockbusting investigative news stories and highly repeatable delivery of raw data.

The stuff in the middle, not so much.  What about Patch.com? I’ve already covered that one.