John Tabor on niche markets and innovation
John Tabor, publisher of the Seacoast Media Group, Portsmouth, N.H., USA
John Tabor, publisher of the Seacoast Media Group (New Hampshire) explains in this analysis how this regional U.S. newspaper group serves new advertisers with innovations and niche market products.
Since July of 2007, we have launched free daily newspapers for our beach communities ($7,000 per week revenue over the summer season, 16% profit), a searchable listing of restaurants in the area with reviews and future stories ($65,000, 40% margin), and sales of Google AdWords ($204,000, 50% margin). All three of these products serve new advertisers – The Beachcombers free dailies, approximately 70% new; the restaurant site, approximately 50% new; Google AdWords 60% new.
In terms of finding lucrative niche markets the newspaper can serve, there are several methods. First, we use a database of advertising dollars by category in our market. We and most newspapers will find large pockets of ad dollars and very small market share in categories such as seasonal businesses, restaurants, legal and financial services, healthcare, cosmetic dental/surgical, etc. Areas where we have low market share are opportunities for us to create new products. Once we’ve identified undeserved advertising niches, we like to put together employee teams that visit clients solely for the purpose of learning their needs. How do you market your business we ask? How do you get new customers? What keeps you up at night trying to get new customers? What would the ideal product to get new customers look like, etc.?
We track the amount of time spent on new products and innovation as a percent of management time, and our goal is to see that grow to 20% - 30%. We also track our total audience and as print circulation declines, we want to offset it with online communities that expand our audience, or new free publiations that can also grow our audience. In the current environment we find we have to cut resources in the core to free up time and money and people for new products. It is difficult, but we must “shrink to grow.” A method our newspaper group uses (Ottawa Newspaper group, part of Dow Jones/News Corporation) is a core budget for the existing operation and an overlay budget. The core budget shows declining revenue to the pattern of the last two years. It also takes into account staffing that we see going forward with the reduced revenue. The overlay budget shows additional expense saving initiatives, and new revenue. Thus we can take a key employee out of the core and put him or her in the overlay budget. The two budgets roll up into a comprehensive budget, but we can track new product revenue against the overlay budget. By moving employees from the core to the overlay, we give people a future around new products.
Our next innovation project at Seacoast Media Group will be expansion of our Internet marketing services. We now have 40 Google AdWords clients, and we are building landing pages and reports that refresh daily with metrics on the combinde campaigne – impressions for their ad, click-throughs to the landing page, and conversions to leads or purchases on the landing page. This should be a contributor to revenue starting in February 2009 and our pilot landing pages have done extremely well for clients so far. Our other innovation will be the creation of a custom publishing devision. This unit will approach large regional advertisers and institutions, such as banks and hospitals, and develop customized publications for them. These could be a one-time magazine format publication about a new service at a hospital, mailed to all the residents of the area, or a colorful tabloid describing the history and features of a major resort hotel which we destribute at highway rest stops, restaurants, or public beaches.
Page first published: 11.12.2008