Dispatches from Mega-Conference: New ideas for consumer revenue, branded content, alternative funding


Here’s what LMA staff members saw and heard this week (Feb. 17-19) while attending the Key Executives Mega-Conference in Fort Worth, Texas.

Toward more consumer revenue

Panelists in the digital subscriptions/consumer revenue session share a laugh: (from left) Jed Williams, LMA; Matt Fulton, Maine Today Media; Jon Rust, Southeast Missourian; Brian Connolly, The Buffalo News; P.J. Browning, The Post and Courier; Pete Doucette, FTI Consulting.

Panelists in the digital subscriptions/consumer revenue session share a laugh: (from left) Jed Williams, LMA; Matt Fulton, Maine Today Media; Jon Rust, Southeast Missourian; Brian Connolly, The Buffalo News; P.J. Browning, The Post and Courier; Pete Doucette, FTI Consulting.

Based on the number of Mega-Conference attendees who made their way to the Tuesday morning session on digital subscriptions and consumer revenue models, those remain hot topics in the newspaper side of the local media industry.

The session, which highlighted the past year’s work and local case studies from the Google News Initiative Subscriptions Lab, covered examples of growth in digital subscription acquisition and retention, and the approaches that helped newspaper companies large and small achieve that growth.

Ben Monnie, director of global partnerships and solutions, news at Google, said GNI decided to develop the lab to speed newspaper companies’ digital transformations.

“We started by asking, how can we bring meaningful, data driven, consulting driven insights to help publishers transition from print circulation organizations to world class digital subscription organizations,” Monnie said.

Pete Doucette, managing director, FTI Consulting, said success starts with believing it is possible.

“If we were to set out at the start of the lab with a soft objective, it would be establishing confidence in a future model for local publishers centered around digital subscriptions,” Doucette said. “The fundamental question most publishers have is, what is the opportunity? Is there a ‘there there’ with digital subscriptions?

“We’re big believers that quality local journalism is worth paying for,” Doucette said. “But you have to find a way to convert that to a long-term sustainable business model.”

The 10 Subscriptions Lab participants saw key metric improvements that move significantly in that direction, including:

  • $7.8 million incremental customer lifetime value per year
  • 55% increase in digital subscribers year over year
  • 43% increase in average monthly consumer revenue
  • 59% increase in average monthly subscriber starts
  • 19% decrease in average monthly churn

Doucette said two in-depth reports from the GNI Subscriptions Lab are available for download: Digital Subscriptions Playbook and Critical Publisher Benchmarks for Digital Subscription Success.

In the second half of the session, representatives from newspapers that participated in the Subscriptions Lab validated that quest for confidence.

“At The Buffalo News, we entered the program having the will but not necessarily the way,” said Brian Connolly, vice president for business development and innovation, The Buffalo News. “[Subscriptions Lab] benchmarking was definitely the beginning in showing the way.

“A good example of having our heart in the right place was our email newsletters,” he said. “We had done a lot with email, bought into it as an acquisition and retention tool, and had what we thought was a really good editorial product. But growth on that list was really slow.

“When we got our benchmarks we realized how we really needed to get serious if we wanted to grow that list.”

Growth statistics from The Buffalo News based on work as part of the GNI Subscriptions Lab (FTI Consulting)

Growth statistics from The Buffalo News based on work as part of the GNI Subscriptions Lab (FTI Consulting)

Which The Buffalo News did — almost 8-times growth in its marketable email database. And that led to more paying subscribers: “We’re closing in on 1,000 paid conversions from that list since July,” Connolly said. (GNI has more from Connolly on The News’ results from the lab in a new blog post.)

P.J. Browning, publisher of The Post and Courier in Charleston, S.C., said her team’s work with the Subscriptions Lab revealed another opportunity: fixing problems that lead to potential subscribers abandoning their orders.

“We realized that 90 percent of our audience that started the process, they weren’t completing the process,” she said. “We had to dig in to figure out what is going on.

“If you want some exciting reading get into your credit card processor. Your processor can sink you and you won’t even know it is sinking you,” Browning continued.

Matt Fulton, vice president of digital products, Maine Today Media, agreed.

“Pay flow is just another area where you have people who declare intent in the relationship and you may be ignoring them,” Fulton said.

Yet another opportunity area revealed through Subscriptions Lab rests in user experience design, as Jon Rust, publisher of the Southeast Missourian, explained.

“Something provided early on from the Google team, from the News Consumer Insights team, was an audit of the consumer experience and user interface of our sites,” Rust said. “That audit was very helpful for best practices we could employ as we redesigned sites for engagement and subscription conversions.”

And that led back to more confidence in digital subscriptions.

“The lab gave us those things to focus on,” Rust said. “That confidence led to velocity, and also led to morale lift. Now we have people who feel confident in the direction.”

Branded content keeps growing

Josh Mabry (right) from Facebook Journalism Project kicks off the session Branded Content: The Business of Storytelling as panelists (from left) Samantha Johnston, Swift Communications; Jared Merves, Denver Post Content Studio; Amber Aldrich, The Seattle Times; and Julia Campbell, The Branded Content Project, listen.

Josh Mabry (right) from Facebook Journalism Project kicks off the session Branded Content: The Business of Storytelling as panelists (from left) Samantha Johnston, Swift Communications; Jared Merves, Denver Post Content Studio; Amber Aldrich, The Seattle Times; and Julia Campbell, The Branded Content Project, listen.

As The Branded Content Project brings aboard 22 beta group participants in its second year, project lead Julia Campbell convened representatives from both alpha and beta groups for a 90-minute share-out session at Mega-Conference.

Campbell was joined by Josh Mabry, local news partnerships lead at Facebook Journalism Project, which provided $1 million to fund the project.

“What are the things we can do as Facebook to help the ecosystem more broadly?” asked Mabry. “We can work with LMA and LMC [Local Media Consortium, partner in the project] on areas of critical need we can address right now. Branded content was one area that looked like a great opportunity to do that. Folks addressed it time and time again as something we can do right now. It’s hard, because there’s a lot you can do, seemingly unlimited options. But what should you do?”

“We said let’s put time and resources behind this with partners who want to figure this out,” he added.

Mabry and Campbell also announced a new expansion of The Branded Content Project, to include five new, independently owned publishers serving communities of color.

What have alpha and beta participants learned so far?

 

“When we started, we referred to it as native advertising because that’s what it was,” said Amber Aldrich, senior director of advertising, The Seattle Times. “Now, five years later, we are realizing the real value we bring to the table is that we understand audience, we tell stories, and we have expertise and strategy we can offer these businesses.”

“[Chief Marketing Officers] and brand managers are being tasked with improving their content marketing,” said Jared Merves, lead, The Denver Post Content Studio. “By offering branded content we’re able to help them achieve their content marketing goals, save money, make their lives easier, which can justify investment in our sponsorships. We’re tapping into content marketing budgets to help pay for sponsored content.”

Tapping budgets beyond transactional advertising also resonated with Aldrich. “We sometimes go after more of a [public relations] budget than advertising budget. A lot of P.R. professionals are seeing earned media as something they’re no longer getting. They’re realizing they’re having to pay for content.”

And Samantha Johnston, general manager, Colorado Mountain News Media West, and publisher, The Aspen Times, observed another benefit that applies even in small markets: using digital branded content programs to build out performance and engagement data.

“We’re generating real digital revenue and finally showing metrics and in-depth analysis we’re not able to do in print. We must have 10 zillion anecdotes from ad clients, most of them trying to achieve things other than time on site etc.,” Johnston said. “A big part of this project is we’re able to build out that data.”

New growth in a news desert

(From left) Jed Williams, LMA; Eric Barnes, The Daily Memphian; Mandy Jenkins, The Compass Experiment.

(From left) Jed Williams, LMA; Eric Barnes, The Daily Memphian; Mandy Jenkins, The Compass Experiment.

A one-size-fits-all approach won’t work to grow new journalism teams in news deserts.

Two cases in point were presented at the session titled Making News Deserts Bloom Again. Mandy Jenkins, general manager of The Compass Experiment, and Eric Barnes, chief executive officer, The Daily Memphian, described how they established their news ventures at very different scales in Youngstown, Ohio, and Memphis, Tenn., respectively.

The Compass Experiment, as Jenkins explained, is funded by Google but managed and operated by McClatchy. Its initial goal is to launch three digital-only news sites in small to medium size U.S. markets underserved by local news media. Then, the project aims to make those sites self-sustaining.

“Youngstown was not ideal in some ways,” Jenkins said. “It’s not growing, not a very wealthy community. But it lost its daily newspaper, though it is not truly a news desert, with two local TV stations there.

“We went in and talked to a lot of people, found out what they were afraid of losing with the paper going away, and tried to address that,” she added.

The new site, Mahoning Matters, has grown to more than 60,000 monthly unique visitors, more than 200,000 monthly page views, more than 4,000 email subscribers, and is expected to achieve its monthly recurring revenue targets in April 2020.

It’s not a paid content or subscription site at this point. “When we got on the ground in Youngstown we made the decision after talking with people. We got a lot of pushback to the idea of having to pay to get to this content,” Jenkins said. “It was a big concern for a lot of people. And there were no paywalls in any local media there.

“People had to get to know us first before we ask for money.”

By contrast, Barnes knew The Daily Memphian needed to charge for access to content from the start.

“For us, we went so big so fast, we couldn’t rely on membership in a voluntary sense,” he said. “We would have gotten a lot of people who joined, but we needed to charge and charge early. We raised a lot and that’s public, but we also are spending a lot. So we had to say to people you have to pay for this. You saw what it was like when the local paper was crumbling.”

The Daily Memphian has 34 full-time journalists and more than 20 freelance contributors covering the southwest Tennessee city and region.

“On one hand we’re going to charge people who can pay for it,” Barnes said. “But there are lots of people in any city who can’t, who shouldn’t have to pay for local news. So we started with schools, and are adding libraries, community centers, prison reentry programs. We don’t want to charge them for access. We can make locations like these free easily.”

Regardless of scale or business model, being of the community matters when trying to serve a news desert.

“The most important thing I have found so far is, early on, we have to make this locally driven,” Jenkins said. “I can’t be the face of this. I don’t live there. It’s not just getting people who care about local journalism, it’s getting people who care about where they live.”

Alternative funding approaches

Tim Ritchey, publisher of The Fresno Bee, used this slide to describe the steps in launching a community-funded Education Lab in The Bee’s newsroom.

Tim Ritchey, publisher of The Fresno Bee, used this slide to describe the steps in launching a community-funded Education Lab in The Bee’s newsroom.

As traditional revenue streams come under increasing pressure, many local news media organizations wish to pursue philanthropic or community funding to bolster and sustain their work in journalism. Panelists at the Mega-Conference session titled Funding Outside the Box revealed several paths such organizations can pursue.

For Annie Madonia, chief advancement officer, The Lenfest Institute for Journalism, it’s about finding people with passion for fundraising to pursue the right relationships.

“There are people like us in your communities who love this work, love forming relationships with people in the community who will give with no expectations of return,  just for the feeling they get of doing something positive,” Madonia said. “If you can think of fundraising that way, not like crying ‘open the wallet’ and cold-call sales, you can do it.”

One example of using community philanthropy to build capabilities in local journalism came from Tim Ritchey, publisher of The Fresno Bee. He described a series of community-funded labs, starting with an Impact Journalism Education Lab, in that paper’s news organization.

“As of today in Fresno, we have funded and launched an Education Lab, with four journalists funded through philanthropy and community sources. … We landed on education as the right place to start,” Ritchey said. “We’re in process of launching a second lab, FresnoLand, focused on development, land use and water resources.”

These labs cost $300,000 a year to operate, Ritchey said, and The Bee has raised enough to fund for the first year and has a “pipeline of prospects” for continued funding.

So, say you obtain some grants or donations for journalism projects and programs. What happens when those initial grants run out? Jennifer Preston, vice president, journalism for Knight Foundation, illustrated strategies for developing sustainable, recurring funding.

“The key to sustainability with philanthropic support, it’s not from national funders, it is partnerships at the local level,” she said. “Foundation leaders, university leaders, think of building relationships, that funnel or pyramid with them. Think of your donor base the same way a ballet or theater company in your community does. Learn from those programs, from the arts organizations.”

‘Wow-factor’ moments

  • The Fresno Bee has 10 reporter positions paid for by philanthropy journalism. This is part of reinventing business models for news.
  • The Southeast Missourian increased digital subscriptions by 93% as a result of its participation in the GNI Subscriptions Lab.
  • The Sumter Item (Sumter, S.C.) sells $250,000 in its Best-Of promotion. Shame on any top-100 market that is not taking advantage of this.
  • The Daily Memphian, launched in late 2018, has 11,000 digital subscribers. We have much to learn from the local media startups.

They said it …

Memorable quotes from the Mega-Conference stages:

“If content is king, distribution is kong.” — Markus Feldenkirchen, Lineup Systems

“We use the term ‘branded content’ when the client is the story. But for our ‘sponsored content’ series, the message and the responsibility is to deliver the target audience, then we will deliver a vehicle for the client to reach that audience.” — Jared Merves, Denver Post Content Studio

“Studies indicate women-led companies outperform those led by men. They’re given the jobs when the jobs are hard. Women across all industries are given broken toys to fix.” — Mi-Ai Parrish, Sue Clark-Johnson Professor in Media Innovation and Leadership, Walter Cronkite School of Journalism and Media Communication, Arizona State University

“We have to remind ourselves local journalism didn’t fail, it was the business model that failed.” — Eric Barnes, The Daily Memphian

“Nobody is interested in saving your paper. Nobody is interested in saving the business. If [funders] tell you they don’t want to fund journalism, what they probably are telling you is: they don’t want to fund the business, but they do want to fund the impact.” — Annie Madonia, Lenfest Institute for Journalism


Jay Small, Nancy Lane, Jed Williams and Julia Campbell contributed to this report.