Author: Mark Fletcher

PBL has announced this afternoon that it will merge its online advertising business with carsales.com.au. This puts Australia’s #1 auto site within the realm of the Packer media empire. Just a couple of years ago News and Fairfax dominated classified advertising. That dominance is shared with PBL. In fact, PBL is setting the agenda at present.

This move by PBL underscores the need for newsagents to reevaluate their business model. Advertising is moving online. The speed of change is increasing and the deal by PBL will serve to increase this. Newsagents need to be replacing newspaper generated traffic and revenue. The PBL move demonstrates how to do this – pursue opportunities just outside your current area of operation but close enough for you to understand the business.

Newsagents and others relying on newspapers for revenue and traffic cannot sit by and wait for someone else to provide them with a future.

Newspapers in Turmoil is by Brian Lambert and published in Rake Magazine. This article talks about a crisis of quality and purpose and does not cover in much detail the disruption and challenges of technology and mobility. Overall it is a call for quality journalism to lead their future. I agree. Quality newspapers treated with respect through a specialist supply chain will have a longer live than fluff promoted from every street corner with unrelated competitions.

Stephen Baker of Business Week has blogged that seems set to unveil its blog search this week.

The relevance of this is that it makes blogs more accessible to regular punters. This builds traffic and puts blogs on a more even footing with regular news and information websites. This is turn puts pressure on mainstream media to engage in a more immediate and conversational way. While there is a debate over whether blogging is journalism, that it is becoming so easily searchable at places such as Yahoo and Google makes it a medium which competes with news and information websites for eyeball time and that is all that matters.

Australia now has several online general classified offerings and none more interesting than Cracker. This is a Fairfax owned business.

Fairfax publishes newspapers and relies on advertising revenue from these newspapers so it is interesting to watch their Cracker play. Plenty of Cracker content is fed across from Fairfax newspapers. Some Cracker categories connect across to Fairfax commercial websites – Domain, Drive and Mycareer.

It is an interesting strategy, competing with oneself. There is no doubt many businesses have been successful riding a tsunami on a surfboard and from the front. It sure beats getting swamped while your back is turned. The Fairfax strategy is better than what most publishers around the world are doing in response to the online advertising juggernaut.

Cracker looks like Craigslist. However, given the way it attracts new content and is fed content from Fairfax commercial sites, it is of more interest to readers than Craigslist.

In competing with itself, Fairfax is also competing with their traditional supply chain. They are offering an online only service which competes with and leverages off Fairfax products sold through newsagencies and other retail outlets supplies by newsagencies. It would be interesting to see how Fairfax would react if newsagents directly competed with them I this way.

Where the Fairfax model fails consumers is in the areas of high volume classified advertising – real estate, auto and employment. For these you have to use the Fairfax commercial sites and pay their rates – rates which are priced to protect revenue streams newspaper publishers became used to when newspapers were the only medium for such advertisements. The advertising pricing model should reflect pure online play and have no obligation to the broader Fairfax organisation. It’s only this pricing model which will attract consumers without support from existing Fairfax publications and websites.

With other sites now developing free and low cost online only plays which do not hold any obligation to a mainstream media operator (monkey; gumtree) and therefore do not follow a higher price model, Fairfax will be under pressure on its pricing.

The Australian classified advertising space is ripe for fundamental change. Consumers are paying too much for advertising. As news spreads here is lower prices overseas others will enter this space and play and draw attention to our out of date pricing models.

Classified Intelligence reports in a press release that “Google is aggressively moving to include classifieds listings in its organic search results…”

According to CI Google is currently requesting direct feeds from classified advertising websites.

While I don’t know if Google will be given the content feeds they are seeking, that they are pursuing providing advertising content through search results puts the traditional classified advertising supply chain more under the pump.

This is a space we have been playing in, in the back room, for over a year. Our goal is to offer an online advertising solution which newsagents can be part of in some way.

Report in Red Herring about News Corp’s global plans to leverage wireless opportunities for distribution of content. Here’s how the article starts:

Rupert Murdoch’s media empire News Corp. hopes to dominate entertainment content on cell phones by marketing aggressively in 2006 across the company’s global media network, a company executive said on Monday.

It’s part of the company’s plan to hold onto the media landscape as the advertising dollars move away from television and more toward new media like cell phones, the Internet, and video games.

Newspapers should be on that list as well. This move to more deeply engage with wireless as a channel for content is crucial and not unexpected. The News Corp. move will lead others to the well and speed up the disruption being experienced by mainstream media and their supply chain.

Lucy Hood from Fox Mobile Entertainment is quoted as saying: “In 2006 we will distribute globally and market aggressively. We will no longer rely on others to promote”

While newsagents need to discuss newspaper distribution and operational issues with publishers, the more important discussion needs to be about the future of the infrastructure we have established and how this can have a commercial viability with home delivery and retail of newspapers flat or falling.

Stories like this in Red Herring ought to drive newsagents to be working on business plans of their own. The world does not end with the News Corp wireless strategies. It changes is all and the sooner we in the newsagent channel realise that the more focused and productive our discussions with News Corp. and others will be.

According to a report at news.com.

Visit ononemap and you will see another site cleverly using Google mapping technology to navigate real estate advertisements. They take advertisement content from other websites and aggregate it with a cool mapping front end. brilliant.

In yesterday’s edition of Crikey, a daily emailed publication of news and comment, Publisher Eric Beecher commented about newspapers in the context of the appointment of a new editor for the Sydney Morning Herald, a newspaper Beecher once himself edited. Here’s what Beecher had to say:

17. Editing the SMH is about cost cutting, not creative journalism

By Crikey publisher Eric Beecher

The Sydney Morning Herald has a new editor – Alan Oakley, currently editor of The Sunday Age. “I am privileged to take on the best job in Australian journalism,” he said yesterday. “It is a challenging time for newspapers. I will concentrate my efforts to ensure that we are continually meeting the evolving needs of readers.”

Oakley, who is a popular choice, may feel he is taking up the best job in Australian journalism (it certainly felt like that when I had it in the late 1980s), but I suspect it won’t be much fun.

Newspapers like the Herald that depend solely on classified advertising for their profits are on the skids. Fewer people buy them or respect them, and their classified ads are migrating inextricably to the internet because it’s a better, cheaper medium for that kind of advertising.

Unfortunately, this consigns their editors to saying one thing (“I will concentrate my efforts to ensure that we are continually meeting the evolving needs of readers”) but doing another – cutting costs and eliminating jobs. These days, editors of papers like the Herald are more like executioners than editors.

Quality newspapers are a sunset industry desperately trying to prop up their historically high profits by cutting costs. Over the past week in the US, for example, six of the country’s more prestigious newspapers – including The New York Times, Boston Globe, Philadelphia Inquirer and San Jose Mercury News – have sliced hundreds of editorial and non-editorial jobs. And no-one believes this culling was anything other than business as usual for big newspapers.

Fairfax CEO Fred Hilmer said yesterday that Oakley’s appointment means the Herald “is in excellent hands for the future.” Unfortunately, that can only mean that Alan Oakley knows how to wield the knife.

I agree with Beecher’s comments about the viability of newspapers relying on classified advertising. Okay it won’t happen today or tomorrow. It will happen though. The economics of online classifieds make it inevitable. Newspapers cannot compete with the flexible search, production costs and mobility offerings of online advertising. Playing games with giveaways and competitions to drive sales will not fix that. Nor will offering free advertisements. Nor will free newspapers. Newspapers have a bright future if they focus on content.

I worry for the traditional newspaper supply chain in Australia. Newsagents are not prepared for the effects of the changes even though we are in the middle of them already with considerable supply changes impacting our businesses.

I disagree with Beecher’s comments about the viability of quality newspapers. Respected content (news, analysis and opinion) delivered exclusively in a print form will deliver sales of sufficient value to attract certain advertisers. Okay it’s more of a hope than a belief. People like Tim Porter and Jeff Jarvis and others have suggested how it may be achieved.

There is no doubt that this is a time of enormous disruption for newspapers. Denial only makes the road harder to navigate.