How much do you really know about your reader? Chances are it isn’t very much. News organizations traditionally haven’t had to know their customers very well because the booming advertising market ensured they didn’t have to. Now that advertising’s value is in free-fall, however, this kind of knowledge may become the most valuable asset you’ve got.
We had the chance to speak to a group of newspaper executives about new revenue models a couple of weeks ago and were a bit surprised at how foreign the concepts of lead generation and qualification were to them. In the business-to-business (B2B) publishing industry, lead management has been the lifeline that has kept publishers afloat. It has corollaries that would be useful to news executives in consumer publishing, too.
Lead generation (called “lead gen” in the trade) is the process of matching sellers with qualified prospective buyers who are ready to make a purchasing decision. Advertising is a basic shotgun approach to lead gen in which the publisher plays a passive role by merely providing a platform for delivery. The onus is on the advertiser to convert those leads to customers. That’s an expensive process. B2B companies focus most of their attention on so-called “warm” leads, or those who are ready to sign a check. The problem with advertising is that it also delivers “cold” leads, or tire-kickers, and it’s expensive for the vendor to weed those people out.
Know Thy Reader
Publishers can be a whole lot more active about matching buyers and sellers, though. As they gather information about the characteristics of their audience, they can structure programs that generate better-quality leads and charge more for them.
B2B publishers went through the valley of death a decade ago in a market contraction that was a lot quicker and more dramatic than the one that’s hit newspapers over the last five years. Publications like PC Magazine, which raked in more than $100 million a year in ad revenue at one point, were completely out of the print business by 2009. A lot of publishers perished, but those that survived have converted to a lead gen model.
These publishers now focus on developing customized online destinations and real and virtual events that deliver warm leads. The more they know about the customer, the more they can charge for the lead. Web analytics make it possible to know a lot more about our online visitors in particular than we used to know. When combined with customer relationship management (CRM) systems, publishers can now build extremely detailed profiles of individual audience members.
Newspaper publishers know about the value of segmentation. That’s why they created automotive, real estate, arts & entertainment and home sections decades ago. Advertisers wanted to reach more qualified buyers. Online, you can take that to a new level.
Once an online visitor registers with you and accepts a cookie, you can track that person’s every online interaction with you and build profiles that enable your advertisers to make customized offers. A visitor who reads a lot of article about boating and clicks on your offer of a discounted ticket to the boat show is a lot more interesting to local suppliers of nautical equipment than the average reader. Similarly, a member who registers for your discounted passes to the bridal expo is going to suddenly interest a lot of specialty retailers.
All About Targeting
Is what we’re telling you a revelation? We hope not. Google and Facebook have built their businesses on delivering warm leads as indicated by search activity and member profiles. They’ve sucked a lot of money out of the print advertising market in the process. On LinkedIn, you can now buy ads aimed at engineers with VP titles who belong to construction groups and live in the greater Cleveland area. Can the Plain Dealer deliver that level of granularity? Probably not. But if it had that same quality of information in its database, it could create some pretty compelling packages for local businesses that wanted to reach those people.
We don’t mean to imply that B2B and consumer newspaper publishing are the same thing, but there are lessons news organizations can learn from their B2B counterparts, who have a half-decade’s more experience with adversity. Qualified prospective customers who are ready to make a buying decision have a lot more value to advertisers than drive-by readers. What can you do to capture more information about the people who visit your online properties? How can you use that information to develop high-value – and high-priced – marketing programs for your customers? Finally, how can you use your unique advantage of local presence to distinguish your products from Google’s and Facebook’s?
Tell us what your news organization is doing to tap into this opportunity.
Note: Our book on B2B social media marketing has a lot more detail about this topic.