Audience growth is the key to revenue growth

Newspapers have never worried about building an audience before expecting revenue. Newspapers want the revenue first.

“Special” sections always originate in the ad department. Sure a handful of newspapers will run an ad-free section to try to win a prize.

Look at all the “youth” oriented sections that are being folded up because of lack of revenue.

Biz sections are being combined with other sections because of lack of revenue.

The only exception to this is TV pubs. And those don’t get killed because editors are afraid. (somebody blogged about this)

So to expect newspaper companies to suddenly embrace “if you build it, they will come” is way off the mark.

Rob, please start building stuff that advertisers want and/or need – that is also cool shit.

That’s how to benefit newspapers.

Mark, just because “newspapers have never worried about building audience before expecting revenue” before doesn’t mean it was the right strategy then. It certainly doesn’t mean it’s the right strategy now. There’s a world of difference between starting a new vertical magazine and trying to get the web right.

We need audience to make money.

And I don’t want to be misunderstood as saying Rob doesn’t know how to make money. I think he’s shown that he has, but the big lesson of Rob’s work is that audience growth (or I think he’d say great content) has always been key. My comments were more a reflection on me. I think I’ve spent too much of my career worrying about feeding the bottom line rather than building a viable audience.

Actually … I have blogged on this before

Of your local DMA, at least 12 percent of the adults should be visiting your site on a daily basis.

Another way of looking at it, is this is probably about 25 percent of your print circulation.

Of the local daily unique measurement, I’ve never been able to find a local paper this side of the WaPo with more than 4 percent.

I’ve based the 12 percent number on some media theory I read once that 12 to 15 percent of a potential audience is the magic number for real revenue growth. But even so, the average paper’s 2 to 4 percent number seems subpar on its face.

I’m curious whether anyone knows what the penetration in their market is without paying for actual market research.

Unless you know of some formula for determining that XX percent of monthly uniques are real people, market penetration can’t be gleaned from regular Web stats. Right?

I’m asking all this because I’d like to figure out where my own site stands with regard to your test. According to our Omniture stats, the HeraldTribune.com audience grew 51 percent in 2006 over 2005. The market grew much slower. But unless I can determine how many of that 51 percent are local and real people, then any growth rate in online audience is not relevant to market penetration. And I’d like to find a way to calculate that without paying someone.

(As an aside, I’d love to pay someone. But that’s out of my control.)

traffic is not always a good thing, quoth the cowboy who rides herd over a server ranch. but monetizible traffic is always a good thing, though.

speaking as someone who has pulled off some seriously crazy cool sh*t, it was a lot easier to do it when i used someone else’s credit cards to rent the RVs, buy the gear, and pay for the bandwidth. the old tcpalmers blew minds when we launched the interactive morning zoo ‘fighting monday’ back in the 90s, but the cost of the live real video streaming that went with the chat and phone bank was a budget killer. the product was a decade too early. and although we got pounded with traffic when onnow gave us the link love, we couldn’t pay for the traffic because advertisers didn’t see any value being there. no dough, no show.

getting audience and serving that audience costs money, so it is important to manage growth smartly so you can make enough to cover the cost of it. you can get audience pretty fast: just hang up the ‘free beer’ sign. unfortunately, someone still has to pay for the beer.

Rob, I remember you saying that Mr. Simons guidance at Lawrence was to not lose money. Maybe we have a symantic difference. I’m thinking profit, others apparently are thinking revenue.
Did lawrence.com make a profit? Direct revenue minus direct expenses (forget overhead) how about LJWorld.com, Naplesnews.com?

Howard: it’s engrained in the culture of newspaper owners that any new project must show a profit (as defined above.)

So building cool shit isn’t a sustainable goal. It has to be cool shit that adds to the bottom line fairly quickly.

I’ll say it one more time, Mark. Just because a newspaper executive says it, demands it or wants it, doesn’t make it the best business practice. You can keep repeating yourself, and I’ll keep repeating myself, if you like.

BTW: That’s what Wall Street has been telling newspaper executives. That’s why there is no longer a Knight-Ridder. Lack of vision for growing audience and building a sustainable business.

Also, assuming your uniques are about half local … you’re daily online audience is about less than 20 percent of your Sunday circulation. Can you verify that? Also, what’s the population of your DMA and what is your market penetration … um, what’s your site?

WaPo’s local market reach, as measured by the 30-day reach question, has been #1 for a long time (among newspapers measured by Media Audit), and somewhere in the neighborhood of 30 percent. I haven’t seen the stat for a year at least, however. So I don’t know where it’s at.

Why wouldn’t I?