Found this insightful and informed analysis of newspaper site registration on Slashdot. #

Slashdot | Turning Up The Heat On On-Line Registration #

by yelvington (http://www.yelvington.com/) #

Others already have posted the obvious answer that newspapers make most of their money on advertising, not circulation. I’ll add some precision. (I am a strategist for a newspaper company.) #

Three revenue drivers traditionally have been coequal for printed newspapers: Classified advertising, display advertising (the big ads on news pages), and circulation. #

However, circulation revenues are rapidly declining due to market pressures, and circulation costs (a problem of print distribution, but not of Internet distribution) consume more than circulation sales brings in. #

Display advertising has declined about 15 percentage points over the last couple of decades, largely due to retail sector consolidations and Wal-Mart (which does not advertise very much in newspapers). So newspapers are increasingly dependent on classified advertising … which happens to work extraordinarily well on the Internet. #

The audience is moving from print to the Internet, so it is imperative that newspapers find ways to serve that audience online (and deliver advertising to it). #

On the Internet, the only business model that has been demonstrated to work for newspapers is the open, ad-supported model. The typical paid site gets something like 1.5 percent of the audience of the printed newspaper, while an open site may actually exceed the audience of the print product. So successful newspapers have open Web sites and rely on advertising for support. #

Successful newspapers have implemented classified advertising pricing strategies that harvest that Internet-generated value. The single most effective advertising program implemented by newspapers is the “Top Jobs” program originated at sfgate, [sfgate.com], which lets key classified advertisers pay extra for exposure on regular site content pages. #

Regardless of what slashdot groupthink might dictate, the reality is that local retail banner and tile advertising also works. However, the Internet—because of its potential global reach—creates unique problems for local advertisers. #

Consider the Washington Post. Its advertising base is local. Its Web reach is global. If you think about that for maybe five seconds, you can see why they have implemented registration. They have to develop two completely independent ad sales strategies - one based on a global audience (which is why they ask business questions of nonlocal registrants) and another based on a local audience. And they need to be able to target local advertising based on geographic information from registration and also national advertising based on the B2B questions from registration. #

It is an article of faith on slashdot that “everybody” lies on registrations. My own data shows under one percent falsification. Perhaps most people are not as dishonest as slashdotters. :) #

As for the whine about “inevitable spam” ... please demonstrate where a newspaper has abused the email addresses provided by its users. No newspaper shares those addresses with advertisers. Every news company carefully controls the use of those email addresses—even the Tribune Company, which requires that you consent to receive ad mail as a condition of site access, severely limits both the number and the nature of the emails. It would be bad business to do otherwise. #

So explain to me, why do I have to register? Why not a portal page – local users click here; global users click here. Why do you need my street address? #

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Tuesday, June 15th, 2004 @ 9:43 am Nothings
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