Let’s Learn from Newspaper’s Digital Mistake
September 17, 2019
I may be one of the few people who still receive a printed paper in their driveway everyday. As a matter of fact, every morning I have three printed newspapers delivered. Yes, I still like reading news printed on paper. Most of the population has evolved from a printed paper to getting their news digitally.
In fact, many newspapers (I guess we should not refer to them as newspapers) boast more digital readers than paper readers. At first glance, that would appear to be advantageous because the news organization saves the cost of printing and delivery. Digital delivery will save money and therefore boost the bottom line. The incremental cost of a new reader is minimal.
There is a problem with this thought process however, and it has nothing to do with expenses. It has to do with revenue. While many news organizations have done a superb job of converting their readers to their digital content, they have not been able to monetize them at the same level. In other words, they have not been able to charge the advertiser the same for digital eyeballs as what they have charged for print eyeballs.
Some papers, the Wall Street Journal for one, charge for digital access, and will basically throw in the printed report for free. In other words, they are going to the expense of printing and delivering a paper, even to those who just want digital access. Simply put, that is still where their ad revenue is.
So what does that mean for radio? Radio stations have successfully converted a portion of their terrestrial audience to their digital platform. This is important because it is better than having them leave the station and go to a competitor (and this includes the pureplays).
The reason it is hard to monetize digitally is that most digital advertising is a transactional sale, often with no human involved. This can, and often does, result in a negative auction. The lowest priced provider wins. If we allow 100% of our digital inventory to be sold that way, we will suffer the same fate as newspapers.
For those radio stations that split their signals, they need to establish value. While cost per thousands digitally are low, this digital advertising needs to be positioned and sold like terrestrial radio. The advertiser needs to be told about the advantages of audio advertising and the emotional relationship the listener has to the station and its personalities.
It takes true salesmanship to get value out of your streamed audio. Without that, we are trading dollars for pennies. As always, it comes down to selling value.
-Charlie Sislen, Partner