Tuesday, March 19, 2013

As many newspapers abandon the ad model digital publishing vendors are there to pick it back up and profit

The biggest trend in newspapering is the paywall, but a related trend is the abandoning of the ad model. Journalists, who generally never sold an ad in their lives, and lived in fear of the power of advertising departments, are advocating paid content strategies and giving up on ad revenue (or if not giving up on ad revenue, deemphasizing its importance).

But outside the newspaper (and magazine) industry, vendors don't see it this way. For them, the way to make money is off those who have it: the newspapers themselves, or their advertisers. Nickel and dimeing readers seems like a suckers game, so the way to make it big is to gather up as many eyes as possible and build their own ad networks. To do this, however, they need newspaper executives who are neophytes at the new digital platforms – they are not finding it hard to locate them.

One of the newest vendors to appear inside the App App Store is Scoopkit, a NYC company that promises to make apps for its customers for free. The proposition is simple enough: the newspaper signs up, uploads a PDF of its newspaper, and Scoopkit makes them an iPad app, all for free. "We truly love local newspapers and want to see them grow!" says the company's website.

The new apps appear in the Apple App Store – 54 as of this morning – all appearing under the name Scoopkit, not that of the newspaper publisher. The apps are stand-alone apps, not inside the Newsstand, and they are free of charge.

In other words, the newspaper publisher makes nothing from the apps, nor do they get charged anything. Instead, Scoopkit sells national advertising into the apps and keeps 100 percent of the profits.

As for the apps, well, they are simply PDF of most broadsheet newspapers without any attempt made to make them interactive, or even readable. When launched, the app descriptions some of the apps do not even have screenshots of the replica newspaper, though I'm sure this situation is corrected at some point.

Yes, we can all laugh at the naiveté of the publishers, but I think the real lesson here is that it is the vendor who believes most in digital media, and the vendor who believes there is a working business model that involves advertising.

But the relationship can not last. A newspaper not investing seriously in digital will die, even the publisher has to understand this, why else would they be vulnerable to vendor sales? But with all the revenue going to the vendor, and neither circulation or ad revenue coming in, the newspaper's days are numbered. Finally then, without the newspaper the vendor has no audience to sell themselves. It is the Ouroboros come to life.

Most vendors, including Scoopkit, will say that if the newspaper wants to sell their own ads into the app they are welcome to do so. But the whole premise is based on free and easy. Most replicas are hard to read and don't even fit the tablet's display properly. Selling an extra PDF pages is not going to get response who would be self-defeating in any case. Only low priced national advertising, sold for pennies per thousand impressions is workable.