March 16th, 2009

The Great Seattle Advertising Experiment: What Will Happen to the Seattle Post-Intelligencer’s Print Advertising Dollars?

by

The Seattle Post-Intelligencer today because the first major metro newspaper to stop publishing in print but keep the news brand alive on the web. Seattlepi.com’s Executive Editor Michelle Nicolosi promises bold experiments, “to break a lot of rules that newspaper Web sites stick to.” And to be sure, the entire news industry will be watching to see what an editorial staff of 20 can accomplish compared to a staff of 165. (Given their intent to look “everywhere for efficiencies” — and that they won’t have “reporters, editors or producers—everyone will do and be everything” — I suspect they will accomplish more than most people think.)

But in addition to the key editorial question, Seattle has also now become a test case for one of the most important questions about the near-term future of the newspaper industry that is almost never asked:

What will happen to the print advertising when the newspaper stops publishing in print?

I asked this question a few months ago in theory, but now we get to see what happens in actuality.  Logically, one or a combination of the following will happen to the newspaper’s advertising dollars:

  1. Vaporizes, i.e. the advertiser stops spending the money — given the economic crisis, this seems likely for some advertisers
  2. Shifts to Seattlepi.com — which is hiring its own sales force following the dissolution of the joint operating agreement with the Seattle Times
  3. Shifts to another newspaper, i.e. Seattle Times — through the JOA, the same sales force sold ads for Seattle PI and Seattle Times, so it only makes sense that some advertisers will shift some or all of their spending to the Times
  4. Shifts to competing local online media, e.g. The Stranger, West Seattle Blog
  5. Shifts to non-local media that can target local audiences, e.g. Google, Craigslist

Anyone who runs a newspaper should be watching this experiment under a microscope. Someone should even go so far as to obtain copies of the last month of Seattle PI in print and call up every display advertiser and ask them what they plan to do.

This experiment has already been playing out in Denver since the Rocky Mountain News ceased publication, but since the Rocky ceased entirely, we didn’t get to see what happened with option #2 above — and that’s the BIG question for many newspaper companies looking at online-only publishing. (The experiment in Denver could be radically altered if a new publication is launched by former Rocky staff — it’s contingent on whether they can sell enough subscriptions, which I hope they do because that is another vital experiment.)

So much of the discussion of the future of the newspaper business seemes to assume only option #1 above will occur. But that’s unlikely.

Of course the big question is whether local media can find new ways to create value — and I say “create value” because that is the key to any new business (vs. “new business model,” because those discussions typically start with what the business needs, not what the market needs). I think there are tremendous opportunities for new value creation in emerging collaborative media ecosystems, but that’s for another post.

In the meantime, all eyes are on Seattle.

Comments (15 Responses so far)

  1. [...] Meanwhile, Publishing 2.0 wants to know what the paper’s print advertisers will do. [...]

  2. Hi, Scott:

    First, your readers need to understand that the PI’s print advertising has been coming from the Seattle Times as part of the Joint Operating Agreement.

    The reports I’ve read say 20 editorial and 20 ad staff. Where will those ad staff focus? One hopes places that the Seattle Times hasn’t explored. Thus the PI could become a major competitor for hyper-local ad buys. No word on status discussions of an employee-journalist cooperative, which still might be needed if Hearst pulls the plug.

    In Denver, TheRocky2 group is asking $5 a month; for $10 a month, you get the printed paper from the Denver Post, at least that’s the introductory subscription rate. It may be more like $12 or $13 a month after the intro period. To reach their goal of 50K subscribers, they need about 25% of their print subscribers. That’s a lot, especially when you look at the industry demographics for newspaper subscribers (they trend “old”).

    Yes, bold experiments. The question is this: is there yet a big enough online audience to help these experiments come to fruition.

  3. An anecdote: eleven years ago, I was editor of a small trade journal that was forced to cease publishing. After a year’s hiatus, I created a parallel online journal, which published for 3 years. We were free to read, and critically acclaimed by our audience, but could not build a big readership, and could not attract enough eyeballs to sell many ads. In the end, most ads turned out to be “placement for prestige” ads.

    Not a great parallel, because of the scope of the project and the wild west status of the web at the time.

    It wasn’t easy. Some of the advertising vapourised and most went to other print advertising. Most advertisers are conservative and opted for the tried and true.

    Hope that helps

  4. [...] But if the build it, will people come? Will fans of the old Rocky sign up for a monthly fee to get access to the new Times? If it was your town, and your former newspaper, would you? And more importantly, would your less-media savvy friends and neighbors? And will the seattlepi.com be able to retain the paper’s advertisers? (Scott Karp of Publishing 2.0 says it’s hardly a guarantee). [...]

  5. Maybe many of those dollars will move to the Alt-Weeklies that have a solid readership and a slowly growing circulation and are nationally dominating the coveted 18-45 demo in most of the communities in which they operate.

  6. [...] Scott Carp van het weblog Publishing 2.0 kunnen er vijf dingen gebeuren met het geld dat adverteerders voorheen over hadden voor de [...]

  7. The Stranger has online components, but it is also printed as an alt-weekly, fyi.

  8. [...] What will happen to the Seattle Post Intelligencers print advertising dollars? Seattle newspaper web only experiment which promises “to break a lot of rules that newspaper Web sites stick to.” As the post says "And to be sure, the entire news industry will be watching to see what an editorial staff of 20 can accomplish compared to a staff of 165." (tags: journalism blogs newspapers media trends advertising onlinejournalism ads) [...]

  9. [...] to the Seattle PI advertising dollars when their print product goes away? As Scott Karp wisely wonders, “What will happen to the print advertising when the newspaper stops publishing in [...]

  10. [...] The Great Seattle Advertising Experiment: What Will Happen to the Seattle Post-Intelligencer’s Pri… [...]

  11. [...] The media industry will be looking closely to see if the P-I can actually stay afloat with this new model. Scott Karp asks one of the big questions, “Just what’s going to happen to all those ad dollars?” [...]

  12. [...] The Great Seattle Advertising Experiment: What Will Happen to the Seattle Post-Intelligencer’s Pri… Scott Karp asks a pressing question in the wake of the Seattle PI going-on-line announcement. He missed a few possibilities, though, including the print advertising from the P-I going to neighbourhood-based print organizations. The advertising is at least as important to watch as the online efforts of the PI survivors. Related: Ken Doctor’s With Switch Flipped, PI Tests the Regional Aggregation Model. [...]

  13. [...] “Anyone who runs a newspaper should be watching this experiment under a microscope. Someone should even go so far as to obtain copies of the last month of Seattle PI in print and call up every display advertiser and ask them what they plan to do.”- The Great Seattle Advertising Experiment: What Will Happen to the Seattle Post-Intelligencer’s Pr… [...]

  14. [...] you can measure the value to accountable democracy that the newspaper used to deliver. Scott Karp said we should measure where the ad dollars go in Seattle now the PI has gone online-only. I think we [...]

  15. I feel sad. There is something unique about experiencing a newspaper. Not just in terms of feel, the fonts, layout and a whole lot of other things. For those who were used to the paper it is as if a part of them was detached. As for it being online, well, yes, the information is available, but that is no substitute for walking out in the morning and collecting the paper.

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