By Michael Shapiro

There is very little argument over the fact that the news industry has, in recent years, endured unrelenting turmoil. There have been no shortage of headlines heralding the end-of-days for news as we know it as more outlets shut down, newsrooms cut staff and media properties further consolidate. Observing the media industry has turned into something like an episode of House, where we attempt to pinpoint and treat the strain of contagion that is eating away at newsrooms, profits and business models. The weakening of revenue from advertising often lies at the core of the diagnosis for what ails us. To continue with the medical metaphor, is the concept of advertising itself to blame or perhaps is it that somewhere along the line something within advertising mutated creating a pernicious virus? For local news, I believe it’s more of the latter and I think we can fix it.

The current prognosis by the punditocracy for ad-supported journalism, particularly at the local level, is not good. Outlets have been frantically trying to find, with varying degrees of success, new revenue streams through subscriptions, events and ecommerce to fill the gaps left by declining ad dollars. The question in my mind is, have we, as an industry, really confronted what is wrong with advertising? In building a network of 81 local news sites, we’ve learned some important lessons, but first it’s useful to walk through a brief history of what happened.

The Print to Digital Shift

The first blow came as more readers moved online and away from print media. With declining audiences, advertising in print editions became less attractive. Digital also offered something that print couldn’t — the ability to track performance. The heady early days of digital advertising gave way to some innovation, but also came with a veritable sugar rush of pop-ups and blinking banners. Increasing choices for readers forced publishers to compete for audience, pack ads into every available pixel and embrace programmatic ads. It worked for awhile, but consumers became frustrated, skeptical and desensitized. Yet, there were few alternatives for publishers, so business carried on as usual.

And business as usual means that the overall experience of advertising for consumers, to put it charitably, has been poor. Bad advertising — advertising that is largely irrelevant, intrusive and lacks credibility — has made it difficult for publishers to offer a quality product at scale.

The Rise of Social Media

Social media and the rise of what is referred to as web 2.0 created an entirely new way for consumers to spend time online. More importantly, social media gave consumers more ways to share information about themselves than ever before. This information became invaluable to advertisers as social media platforms monetized their users. The idea was to show users high-quality, tailored and relevant ads. When stacked up against intrusive and irrelevant advertising, social looked like a much better way to spend advertising dollars. Indeed, budgets are still shifting to social, search and increasingly ecommerce (everything) platforms, like Amazon. The media industry saw it happening and struggled to respond.

The rise of social media created a second problem for other digital media properties — traffic. Attention is a finite resource and social media gobbled it up. Publishers had to figure out how to use social media to drive traffic. The problem is, priorities for social media platforms and publishers haven’t always aligned. Changes to priorities and algorithms have at times, wreaked havoc on traffic.

Making Local News Competitive (For Attention and Ad Dollars)

As consolidation rolls along for legacy publishers, news content is becoming less local and less relevant. Less relevant content means less relevant advertising and fewer relevant ads, which means fewer advertisers. It has created something of a death spiral for local outlets.

There is demand for local news. People still want to read about high school sports scores, what local government is up to, community events, public safety and more. The key is giving reporters the resources to focus on creating truly local and engaging content. For us, this has meant reducing overhead for our local publisher-franchisees.

Our model allows for scale to work both ways. Our local publisher-franchisees don’t have to maintain expensive technological infrastructure on their own — we have been able to spread the cost out over our entire network of local news sites. This allows for our publisher-franchisees to focus on creating high-quality local journalism. At the same time, we are able to sell advertising at scale across our network and on specific sites.

Creating a Safe, Credible and Accountable Ad Space

The rush to shift budgets away from more traditional outlets created some blind spots for advertisers. Specifically, the rise of programmatic advertising has created very serious concerns around brand safety and accountability. Programmatic ads purchased through search and social make up a big part of the marketing mix for local and regional businesses. Having ads pop up next to controversial or off-brand content is a real problem.

Another threat to credibility and user experience is the commoditization of readers. From the start, we placed an emphasis on building relationships in the communities we serve. That meant approaching readers as people with real needs and preferences as opposed to a product that could be bought and sold.

These relationships have enabled us to form meaningful marketing partnerships with our advertisers. The advertising experience we sought to create is more like a recommendation from a neighbor than a billboard. In a survey of our readers, we found that 42% said they had shopped at or used a service from a business because they saw their advertisement or read about them on TAPinto versus 24% who said the same of Facebook.

TL;DR: Thoughts on Making Advertising Work and Taking Local News Off Life Support

1. Focus on quality over quantity. Local news can’t compete on scale alone. Providing a higher-quality ad product is key.
2. Build trust at the core. There are major gaps in the marketplace when it comes to consumer trust in advertising. Local outlets are uniquely positioned to build trust with their audiences and create advertising products that are more credible and deliver more value.
3. Rethink business models to reduce the burden on advertising. Dollars should be directed toward producing journalism and audience-building. Creating models that enable publishers to distribute and minimize overhead will enable this.

Michael Shapiro is CEO and publisher of TAPinto.net, a network of more than 80 independently owned and operated local news websites in New Jersey, New York, Pennsylvania, South Carolina and Florida. This post originally appeared on Medium at https://link.medium.com/jd7PPsJwuX, and is re-posted here with the permission of the author. 

Categories: Jandoli Institute, Media