Arkansas Newspapers and the Search for a New Business Model

In this week’s Arkansas Business print edition, Mark Hengel files a report on the state of newspapers in Arkansas and how everyone from the Arkansas Democrat-Gazette to the Batesville Daily Guard are using the Internet to engage audiences, make money on advertising and, of course, save the industry.

Hengel talks to Tom Larimer, executive director of the Arkansas Press Association, about the challenges newspapers in Arkansas are facing. And he Jeff Hankins (my boss and president of Arkansas Business Publishing Group, a nice publishing company) on the record about ArkansasBusiness.com, which we launched waaay back in December 2000.

(Lucky for me, it’s making money.)

ArkansasBusiness.com embraced the philosophy of free content when it launched eight years ago, and Hankins said the Web site and the free e-newsletters it pushes to anyone who registers do better than break even.

“Our Web site has been profitable for several years, with revenue up 26 percent this year,” he said.

Did he mention free content? Then you know what’s next: Hengel talks to Democrat-Gazette Publisher Walter Hussman. In addition to admitting that his company might have been “a little late to the game” entering the niche publishing business with its Sync and Arkansas Life publications, Hussman talks about his newspaper business plan, which (in)famously includes locked down online content:

It’s not that Hussman hates the Internet; he just hasn’t found a model for monetizing the medium as effectively as a print product, he said.

An advertiser wanting space in a Wehco paper might pay between $20 and $40 per 1,000 copies, depending on the ad, Hussman said. A comparable banner or pop-up ad on the Internet generates less than $1 per 1,000 page views, Hussman said.

“The problem is not traffic. You get millions of people who go to look at newspaper Web sites every day,” Hussman said. “The problem is the fact that you can’t get $1 a thousand for it because there are millions of people out there selling that advertising. So there’s an oversupply of sellers, which drives down the price, and it’s not effective, so people don’t want to pay for it.”

So why is Internet advertising not effective? Hengel also talks to Aristotle President Elizabeth Bowles, who says newspapers still haven’t grasped the right advertising model. The key? Targeted (niche?) audiences.

Internet advertising works best when an advertiser pays per lead or sale generated by an ad, Bowles said. Instead, newspaper Web sites have tried to use the same advertising model developed by print editions, which stresses display advertisements. Print publications provide advertisers with an audience of a certain size, of which a percentage is likely to view an ad.

“To some extent, I think newspapers are injured by the breadth of readership they have,” Bowles said. “And in order to make sure my online dollars are being spent as effectively as possible, I want to target my market.”

The key is to connect the Internet user with the content they desire, and connect advertisers with the consumers with the greatest interest in a product.

You can see the complete story (for free, as always, on ArkansasBusiness.com) here.

Also

Hengel talks to former Arkie Jim Hopkins, a one-time commenter to this blog who’s better known as the man behind the Gannett Blog. Unfortunately, Jim’s having some advertising problems, too. More here.

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One Response

  1. Currently, the audience for online publications in our state is severely limited by the lack of broadband service availability. As far as I know, Hussman’s newspapers haven’t done much to promote the expansion of broadband connectivity in Arkansas. Those inky wretches could have been more helpful in encouraging the improvements we need in our infrastructure.

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