What We Know About the Business of Digital Journalism

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Columbia Journalism School | Tow Center for Digital JournalismConclusion“Here’s the problem: Journalists just don’t understand their business.”That’s the diagnosis from Randall Rothenberg, a former New York Times mediareporter who heads the Interactive Advertising Bureau, a trade group representingpublishers and marketers.Whether or not you agree with his sweeping characterization, it’s clear thatmany sectors of the traditional news industry have been slow to embrace changesbrought on by digital technology. They also have been flummoxed by competitorswho invest minimally in producing original content but have siphoned offsome of the most profitable parts of the business.At the same time, digital journalism has created significant opportunities fornews organizations to rethink the way they cover their communities. And inseveral organizations, old and new, we see promising signs that a transformedindustry can emerge from the digital transition—one that is leaner, quicker and,yes, profitable.We do not believe that legacy platforms should be disregarded or disbanded.It simply is not reasonable to assume that any company would cast aside the partof its business that generates 80 to 90 percent of its revenue. But we do thinkthat companies ought to regard digital platforms and their audiences as being ina state of constant transformation, one that demands a faster and more consistentpace of innovation and investment.To that end, we offer these recommendations:• Digital platforms have been treated too often by traditional news organizationsas just another opportunity to publish existing content. Many sites arefilled with “shovelware”—content that amounts to little more than electroniceditions of words and pictures from traditional platforms. But, as wehave seen, publishers can build economic success by creating high-value,less-commoditized content designed for digital media. New York Magazine’ssuccessful site gets little traffic from print-edition stories; KSL.com’s class-Conclusion 129
The Story So Far: What We Know About the Business of Digital Journalismfied ads are not part of its broadcast program; and the Dallas Morning Newsprovides online football coverage that would be impossible to replicate in itssports section.• Media companies should redefine the relationship between audience andadvertising. They have spent a great deal of time and resources buildingmasses of lightly engaged readers. And the industry has turned online adsinto what Rothenberg calls low-value “direct-response advertising—a.k.a.,junk mail.” That kind of advertising is dependent on volume—a game publisherswill never win when competing with behemoths like Facebook andGoogle. This is not a goal that can be accomplished just by the business side.Journalists must make a fuller commitment to understanding the audiencesthey have and the ones they want, and to revamping their digital offerings toensure deeper loyalty.• Media companies ought to rethink their relationships with advertisers. Thisdoesn’t mean allowing them to dictate coverage or news priorities. It doesmean understanding that advertisers now have many more ways to reachcustomers than they used to and that some of these methods, such as socialmedia, can be cheap and effective. News organizations have their ownstrengths: They produce journalism that is geared to their communities, andthey employ sales forces who know their markets—both of which shouldgive them a competitive advantage. They can act as guides to the digital era,helping companies produce new-media ads, place them online for maximumimpact and learn such digital fundamentals as getting better positioningon search engines.• News and marketing companies should develop alternatives to the impression-basedpricing system (that is, pricing by CPM, or cost per thousand)that dominates online advertising. Small publishers have been successfulselling ads by the week or month rather than by volume. Many large advertisersand ad agencies will insist on paying by the impression, but newsorganizations need to build upon their current pricing schemes by combiningdigital ads more effectively with broadcast or print, social-mediaoutreach and other methods. Moreover, media companies must come upwith ways to build content value into digital display ads; as others have also130
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What We Know About the Business of Digital Journalism

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