Newspapers have to stop selling ads and start selling audience. Even more importantly, they have to sell what their business customers seek: awareness. That’s best accomplished by engaging many small audiences within the community and monetizing that through ad programs that span multiple channels.

That’s the gist of comments by Stephen Gray, managing director of the American Press Institute’s Newspaper Next project , in an interview with Mark Glaser last week. The piece has caused a stir in the blogosphere because of Gray’s suggestion that newspapers should learn to think of themselves as advertising agencies. In other words, their role could be to direct their customers’ marketing dollars to the channels that work best for the customer, whether the newspaper company owns them or not.

“It’s not just ‘buy banner ads on my news website,'” Gray says. “It’s ‘we can make your business effective on the Internet.’ And that might include doing your website or buying the keywords you should have on Google AdWords for our market.”

Newspaper Next’s three-year project to figure out a strategy for the newspaper business has employed the services of Clayton Christensen, author of The Innovator’s Dilemma, a book that should be required reading for every newspaper executive. The book examines the paradox of successful companies responding ineffectively to changes in their market that ultimately kill their businesses, even though they understand fully the implications of that failure.

Successful newspapers are reinventing themselves as comprehensive sources of local information through whatever channels people use. Gray tells of the experience of the Pocono Record, which sent out a team of reporters to interview local residents and find out what information was difficult for them to find. The paper rejiggered its products to deliver that information and saw print circulation group and Web traffic and sales surge 50%.

As far as what this means for journalists, Gray offers this provocative quote:

“[This is a] watershed moment, when people stop getting information from a [once a day] dropper. We now live on the ocean and can dip in at any time and get whatever we want. So we will spend a lot less time with things that are designed for everyone like news and spend a lot more time proportionately finding solutions for me and what will help me in my life today…I am preaching in the field that newspapers need to visualize themselves becoming the local information utility.”

Gray’s comments are right on the mark, but it’s doubtful that many newspaper executives have the insight or innovation to make the changes he recommends. In Innovator’s Dilemma, Christensen points to numerous examples of executives in highly competitive, fast-changing industries who failed to respond to technology disruption. If the people who ran Digital Equipment Corp. or Novell were unable to accommodate change, why should we believe managers who have overseen comfortable local monopolies for the past several decades will fare any better?

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This entry was posted on Wednesday, November 26th, 2008 at 9:15 am and is filed under Fake News, Solutions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.