Yet it cost an industry dearly. This was by far the saddest story on the demise of newspapers I've read
in a long time. The summary is courtesy of Chris Anderson at his blog The Long Tail.
The attempt by a half-dozen newspaper publishers to “out-free” a free Icelandic paper that entered the market (backed by Morten Lund, who made a fortune as an early investor in Skype) ended up costing the collective newspaper industry in Denmark more than $150 million dollars and the bankruptcy of three newspapers.
Free is a Feature - redux
Free - alone - is not a benefit, it's a feature. For the prospect, user, and client, free is a gift, and as such it becomes a benefit only when it is used, learned, put into practice, and provides results.
The idea of free is alive and well in marketing communications.
Free is designed to get people into the conversation, yet if the conversation is about your product and service and not about their problem and need, it remains a feature and never becomes a benefit. To me the answer some traditional marketers give to the question of content is not good enough.
When pressed on the fact that the free white paper or article are not really that useful - and may not even match the promise they made to entice them to the download, I've heard some marketers reply: "by the time they realize it though, we have their email address." What a sad thing to say.
This is one of the top ten reasons why your content marketing strategy fails. The question of value is an important one. Content needs to provide value to be sought out.
Back to the Danish
This seems to be the lesson Jon Lund via Anderson extracts - there were logistics and costs associated with delivering the physical papers to people's doorsteps that could have been avoided altogether by providing dispensers in key locations. This is something that papers like Metro have done throughout the world.
The strain of those additional costs on the declining margins, along with the flood of double-free news was not compensated by an increase in advertising revenues.
Mad Men to the Rescue?
While reading some of the articles Anderson linked to, I saw some of the despair of business people facing bankruptcy. Newspapers have content - news - that people still find valuable. They also have an established platform for advertising.
In the last several weeks I've been reading Italian newspapers for a project I'm working on. I'm amazed at the way I notice the ads, which I usually totally gloss over. It's probably because I'm not used to seeing an artfully designed ad for luxury goods right next to a story about the conditions of the recent earthquake victims, still living in precarious tends and exposed to the elements.
Dissonance aside, there are still unexplored opportunities with contextual advertising, creative RSS feeds online, and perhaps even high value classifieds. Where are the Mad Men when you need them?
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Chasing a market to the bottom is never a good idea. I've seen that done in other industries and it takes the value right out of everyone's products. I'm thinking the coffee is still worth paying for - perhaps we can learn how to make the danish available for free.
My other thought is that without papers we also have no third party validating the information. For better or worse, depending on the pressure applied by government and business circumstances, there is tremendous value to a democracy when the Fourth Estate has integrity.
What would you have done in those circumstances?
Perhaps the best kind of service local papers can provide is that demonstrated this past week by Doc Searls.
[image by hessiebell]
Maybe there could be a way for advertisers and free local newspapers to work together. Newspapers need to save on distribution cost and advertisers need better exposure.
Local advertisers who fund the free paper would have the exclusive rights to distribute the paper in the community. That way they would entice the news reader into their business establishment and increase the possibility of a sale (to pay for the "coffee").
This could be applied to the web as well. By allowing the "sponsoring" advertisers to offer the paper's content electronically at no-charge to their own customer base. In exchange for the distribution savings, the newspaper would allow the advertiser a huge advertising banner on the main page at no-charge.
This way both get some coffee that generates income, and a some free danish on the side.
Posted by: Bruce Christensen | May 10, 2009 at 11:02 AM
Earlier today, I chatted with my mother about whether she would read her trusted Boston Globe--which she's read every morning for 30+ years--if it wasn't delivered at 6 a.m. but with the daily mail via the U.S. Postal Service.
Mom said no. She'd enjoy the experience less, because she's accustomed to the morning delivery as a fresh start to her day.
But it begs the question. Why are newspapers relying on paid carriers and delivery trucks, when the quasi-federal USPS can do the same?
Posted by: Ari Herzog | May 11, 2009 at 01:08 AM
Interesting read, Valeria. Especially as I know a lot of the insides of this Danish story.
Basically, the problem here was that someone wanted to get a lot of eyeballs for advertisers and a 'free' paper was the vehicle, ie it was all about the product while noone cared what people really wanted on their doorsteps. Other media companies joined in and they drove each other in the ground with a combination of high cost of production and pathetic revenues.
It's the worst case of media management malpractice I have ever had the misfortune to witness.
Posted by: Mads Kristensen | May 11, 2009 at 02:24 PM