Zeitung Online 2005: New concepts to counter new competition
New attendance record – eBay is penetrating the classified ads market – Success with cross-media ads – Blogs with economic prospects
By Katja Riefler
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Craig Newmark, founder of the hugely popular U.S. classified ads portal Craigslist, gave the participants of the Zeitung Online 2005 conference, held recently by Ifra and BDZV in Berlin, a virtual welcome. He was not actually present, but Dr. Richard Rebmann projected his likeness on a large screen as a way of getting the participants in the mood for the topics to follow. And entrepreneurial thinking, embodied by Newmark in the United States, was a common theme throughout all the presentations. Editorial teams and ads departments are being confronted by ever increasing new competition. Yet they are clearly not prepared to give up without a fight.
Some 180 participants made their way to Berlin for the event, which was a "record attendance", as Ifra's CEO Reiner Mittelbach proudly announced. Dr. Richard Rebmann, BDZV Vice President and publisher of the Schwarzwälder Bote newspaper, made reference to how well the online services of German newspapers are being received according to the new survey performed by the online research association Arbeitsgemeinschaft Onlineforschung (AGOF). Yet he also indicated that publishing houses cannot afford to simply rest on their laurels. BDZV and ZMG have worked on a cooperative model to get newspapers involved in this committee as an industry. As Dr. Rebmann commented, "It is going to cost money, but it is an investment in the future that we simply cannot do without."
For editors, the linking of Google and the new type of citizens’ journalism in the form of Internet blogs could prove to be a "lethal mixture," according to keynote speaker Horst Pirker, CEO at Styria Medien AG. At his publishing house, however, they are hoping to counter this trend with innovative concepts.
"Styria is not a newspaper publisher, but rather a 'content company,' '' Pirker says. The new corporate philosophy was laid down back in 1998/1999, and focuses on collecting, preparing, selecting, designing and assessing content for all conceivable technical platforms. The text, sounds, images, graphics and videos are all stored in a central database here. But the idea is not one of automated publishing, but much more of central availability. "Individual platform managers decide both what is published and in what form,” Pirker says. “There is no central planning. We don't differentiate by type of media or device designation. The only thing that changes is the size of the display."New media use growing rapidly
Lars Eric Torjussen, Administrative Director at Fædrelandsvennen AS in Norway, describes very similar steps that his newspaper is pursuing on the road to becoming a multimedia company. With a daily circulation of 45,000 copies, Fædrelandsvennen (FVN) is one of the largest regional papers in Norway. However, the printed daily newspaper is starting to lose out to other media. Internet, local TV, radio and mobile content are growing faster than the traditional business.
The newspaper reaches 119,000 readers every day, while the web site welcomes around 25,000 visitors per day and the local TV gets 17,000 viewers. FVN's internet site has been up and running since 1996. Local TV followed in 1997, with mobile phone content joining in 1999. But the real change in the corporate philosophy took place in 2000/2001. FVN was keen to become the leading multimedia company in the region.
"Local TV today forms the basis of our multimedia content," Torjussen says. Videos are made available through all media channels, and all content is now generated from a central database on a shared newsdesk. Both the number of users and the frequency of use have increased significantly. The internet presence is moving more and more toward entertainment and interactive services, although current affairs and news still play a key role.
Five percent of all money raised from ads now comes from the website, with four percent coming from local TV. Revenue from ads is growing by around 40 percent a year. "The newspaper looks likely to remain our most important source of revenue in the foreseeable future, although revenue from the internet is growing. The internet has now become the third-largest advertising medium in Norway," Torjussen says. To better benefit from this trend, his publishing house has invested a great deal of energy into the development of new advertising products and training sales staff. In the classified ads market the many years of cooperation with the Internet firm, Finn.no (in which the Schibsted Group holds the majority share), has strengthened the position of his house in the region.
Internet services make sound economic sense. According to Dr. Michael Maier, publisher of Netzeitung until its takeover by the Norwegian Orkla Media Group, the company now draws a revenue amounting to 50 percent of that of Spiegel Online – despite the fact it is only one third the size. "Success does not come by magic. It is vital to have the necessary skills and know-how, as well as a simple business model," Maier says. Netzeitung was founded in 2002 and finally broke even in December 2003. Its revenue has doubled every year since 2003.
Keeping an eye on classifieds
Newspapers in Germany have been keeping a watchful eye on the classified ads markets for some time. Companies such as eBay (with mobile.de, kijiji and the Craigslist clone "Opusforum" acquired in July 2005) and Monster (Jobpilot, now Monster Deutschland GmbH & Co. KG) are forcing their way into the German market. ISA GmbH - joint holding company of the Georg von Holtzbrinck Publishing Group, Ippen and Westdeutsche Allgemeine Zeitung (WAZ) - already runs the portals stellenanzeigen.de, autoanzeigen.de and immowelt.de, and is now set to present its portal Markt.de.
Markt.de is still being finalised, yet should be launched as a platform for free-of-charge small ads by September at the latest, says Klaus Abele, Operations Manager at ISA GmbH. The marketing slogan has already been laid down as "Da ist alles drin," loosely translated as "Get everything you need." Experience from the United States has shown that a lack of awareness in this field can spell disaster for newspapers.
Markt.de has high expectations for this market. Abele claims that the new product will have "the best coverage of the various regions in Germany, paired with the easiest user interface." He adds, "we want to create a movement, getting more people interested in this kind of offer." To get a good number of hits quickly and anchor the brand in the marketplace, the plan is for all vertical portals of ISA to deliver ads and be linked together, including those of newspapers cooperating with ISA. ISA also wants to integrate other sources, such as the jobs database of the German Federal Employment Service (Bundesagentur für Arbeit). Abele is keen to focus on media services. "ISA media reaches 15 million readers every day."
In a live demonstration, Abele presented the current stage of development. The clear aim is to surpass all competitors currently in the German market – opusforum, kijiji, craigslist – within one year. From the second year on, the plan is then to differentiate the sources of revenue.
The question of economic viability was a key area of interest among the participants. "The platform will have to prove itself," Abele says. "There is a clear 'winner-takes-all' mentality in this market. We need action. Newspapers are now on a level playing field with eBay for the first time. We need to stand up and fight!", Abele says in a spirited tone. One way to make money with this kind of portal is through hits-based advertising (similar to Google ads). Another way is to offer those achieving market dominance special features for a fee.
Focus on synergies for 2006 World Cup
In contrast to this, the new cross-media project of the Dusseldorf-based Online Marketing Service (OMS) is focusing on print-online synergies in the ads market in the run-up to the 2006 World Cup. According to CEO Georg Hesse, the project is founded on the idea that while the 2006 World Cup is clearly a huge national event for Germany, it is also a massive local event for the 12 host cities. The NBRZ newspapers (Nielsen-Ballungsraum area) have the potential to cover all the 12 urban areas in question, which is why OMS is to cooperate with this new partner.
OMS already worked together with dpa infocom during the 2004 European Championships to create an online service in its portfolio, financed through sponsoring. The company is also planning on implementing this new project together with dpa, although the project will have a larger scope. The aim is to entice ads customers in this region with a unique combination of online and offline content using six 4-colour World Cup supplements in all titles published by the NBRZ with a total circulation of approximately 8.1 million per edition in connection with a guaranteed online range of up to 120 million page impressions of the OMS newspapers. OMS also promises creative ad format handling.
The first supplement is expected to appear in December 2005, with each publishing house producing a version in its own specific format. The costs per placement are 540,000 euros for a 1/1 page and 20 million page impressions. Smaller formats will, of course, be cheaper. "At these prices, the margins are already maxed out, so it is hard to offer discounts. And the net range is impressive," Hesse says. The concept has met with great interest among ads customers. If the cooperation with NBRZ proves successful, further projects could also follow.
"Mass marketing makes less and less sense in today's markets," stresses Laryssa Kundamal, Director of Sales Solutions, USA Today. Specifically addressing target groups is becoming increasingly important for ads customers. At USAToday.com – a website which caters to some 8.4 million visitors a month – they target by gender, age and post code. The company also uses the service providers Tacoda and Claritas to offer adverts based on interests and lifestyle profiles. USAToday.com currently has some 16 million users in its database. Twenty to 30 percent of ad campaigns are now geared toward specific user segments, despite the fact that ads customers have to pay three or four times the typical fee for this special service.
Economic opportunities for blogs
According to Lisa Stone, blogs, too, have economic prospects. The journalist, corporate consultant and head of the "Blogher" network, surprised many in the United States with this statement. Instead of only striving for "journalistic quality," newspapers should also try harder to meet the interests of their audience. Blogs are an excellent tool for getting inside the community and increasing the range of readers.
Stone explains what shape this kind of integration can take using three examples. At Fresnobee.com, run by The Fresno Bee, you can now find the "Beehive" online magazine blog directly on the homepage. Yet this was not always the case. At the start, the blog was kept hidden. But when Beehive went from 160,000 to 3 million page impressions within six weeks, the newspaper was suddenly keen to "recognise" the new product. It is drawn up by a young editor. Not at all typical for a newspaper, the blog entries are linked to external sites, in some cases even to competitors, and users can publish their own comments on any article.
Law.com, the portal of the renowned specialist publishing house ALM, whose publications include The American Lawyer, named Stone as a particularly successful example of someone who has managed to get the most out of blogs. The editorial team did not even attempt to set up the blog concept themselves here, instead electing to sign an agreement with established names in the blog arena. Their latest contributions now appear under the rubric of "Blog network" and have taken up a prominent position on the homepage at law.com. An outsourced "Metablog" also offers information on the most interesting articles in the entire blog network.
The economics of this system are worthy of particular note here. The bloggers are not paid by law.com, but rather get a cut in revenue generated from ads that law.com organises for the blogger network. The bloggers then make space available on their pages, some of which law.com in turn uses to position five current headlines from its own online pages – "the actual Trojan horse," as Stone puts it. This actually allows law.com to gain a substantial number of hits from an audience that would otherwise never visit its portal.