So, what to do about this over-abundance of advertising inventory in our local markets?
Unlike some in this industry who are looking, again, at some form of paid content as the solution to the revenue crisis, I still believe that there’s a lot of life left in the ad-supported model. We haven’t been particularly creative in building ad solutions that work well for advertisers and that generate sustainable revenue for newspaper companies.
Given the diminishing returns of the CPM market outlined yesterday, the move is on to find a better model. Recently, The New York Times’ David Carr looked to Apple for inspiration:
Those of us who are in the newspaper business could not be blamed for hoping that someone like (Apple’s Steve Jobs) comes along and ruins our business as well by pulling the same trick: convincing the millions of interested readers who get their news every day free on newspapers sites that it’s time to pay up.
For a long time, newspapers assumed that as their print advertising declined, it would be intersected by a surging line of online advertising revenue. But that revenue is no longer growing at many newspaper sites, so if the lines cross, it will be because the print revenue is saying hello on its way to the basement.
The iTunes Solution.
And yet there is no parallel between selling songs — which customers will play over and over — and selling a recap of the City Council meeting. Apple didn’t simply say “What do we have that we could sell to people?” They looked for a need in the marketplace — a better way to buy music — and created it.