Journal Register Co. files for Chapter 11
The Journal Register Company will seek protection under Chapter 11 “and will seek to implement a prompt sale,” according to Digital First Media head John Paton. The U.S. newspaper company, known for its Digital First strategy, has already attracted interest from an investment group affiliated with Alden Global Capital.
“I am pleased to tell you the Company has a signed stalking horse bid for Journal Register Company from 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC,” Paton wrote on his blog.
A stalking horse bid is an initial bid on a bankrupt company’s assets from an interested buyer chosen by the bankrupt company.
Should staff be worried? Paton says no, it’s business as usual. “Journal Register Company’s filing will have no impact on the day-to-day operation of Journal Register Company, Digital First Media or MediaNews Group during the sale process. They will continue to operate their business and roll out new initiatives,” he writes.
So why file for Chapter 11? Paton explains how the company exited the 2009 restructuring with approximately $225 million in debt. Print ad revenue has slumped 19 percent rom 2009 to 2011, and print advertising represents more than half of the of Journal Register’s revenues.
Digital revenues have soared, growing 235 percent between 2009 and 2011. But it’s not enough to make up for the print ad loss, Paton writes.
“And while I get this news may make some of you nervous, don’t let it. Concentrate on the job at hand and we will work through this,” he concludes.
When Journal Register last filed for bankruptcy in 2009, James W. Hall, the CEO at the time, promised it would emerge “stronger, leaner and more financially viable in the current environment,” Poynter writes.
Study: Newspapers losing $7 in print ad revenue for every $1 earned online
by Andrew Moran (Guest contributor/Digital Journalist)
According to a new study by the Pew Research Center’s Project for Excellence in Journalism, newspapers in the United States lose $7 in print revenue for every dollar earned in digital revenue. Will a new business model appear?
Many newspapers in the United States and Canada are starting to adapt to the digital age – some may be faster than others. Some publications have attempted the paywall structure, while others publish their news online for free. But are these business models working?
By analyzing financial data of 38 American newspapers and conducting interviews with senior executives from more than a dozen companies that own 330 dailies with circulations between 25,000 and 100,000, Pew Research Center’s Project for Excellence in Journalism has published a new study that finds some very interesting figures for the newspaper industry.
The most important statistic to report on is the fact that newspapers lose $7 in print advertising for every $1 earned in digital revenue. The research found that digital advertising revenues rose on average 19 percent, but suffered from nine percent losses in print advertising.
“Only 40 percent of the papers that provided data say targeted advertising is a major part of their sales effort,” the report stated. “Even though many newspapers are not focusing on it, smart or targeted digital advertising—in which ads are customized based on consumer online behavior—is expected to dominate local digital revenue by 2014.”
Newspaper executives admitted in their interviews with the institute that cultural difficulties are making it harder to transition from print to digital. One challenge that newspapers face is that their employees are too keen on their “old ways.”
Another trouble newspapers face is that even though they may be attempting to shift towards digital revenue, they are having a tough time trying to convince digital salespersons to the newspaper sector.
Upon further analysis, Pew found that the daily deals offerings (e.g. Groupon, DealChicken, etc.) accounts for only five percent of digital revenue. Meanwhile, mobile device advertising only tallies one percent in digital revenue.
The future seems desolate, according to some of the interviewed executives, who maintain a morose outlook. They believe that many newspapers will shrink, shut down and only provide print editions that would be delivered a few times per week.
“The study suggests that the future of newspapers, rather than being determined entirely by sweeping external trends, can be substantially affected by company culture and management, even at papers of quite different sizes,” said Tom Rosenstiel, PEJ director, in a press release.
Canada’s Media
Although the study primarily focused on U.S. publications, Canadian news outlets face the same issues.It was announced that Torstar Corp., owners of the Toronto Star, Workopolis, TheStar.com and others, reported better-than-expected profits in the fourth quarter. Although executives say advertisers are remaining cautious, digital revenues were up 22.8 percent year over year – digital revenue maintains 10.6 percent of its total revenues.
More than one-third of PostMedia’s revenue comes from online operations. It does not, however, publish its financial data.
This article was previously published in Digital Journal [Link]
Future of advertising? Beach volleyball stars offer sponsorship on their butts
By KJ Mullins (Guest Contributor/Digital Journalist)
Two young British female beach volleyball stars are subletting their bums for money. The pair are encouraging fans to take a pic of their booties in a new advertising campaign that will hit the sand at the hottest sports venue in London.
Zara Dampney, 24, and Shauna Mullin, 26, are the first sports stars to rent their rears to an advertiser.Using a Quick Response (QR) code printed on the back of their bikini bottoms, the two beach volleyball stars are offering spectators a chance to take a photo of their bums using a smartphone. When a photo is taken using a smartphone, the spectator will be taken to their sponsor’s website where they’re offered a deal.The QR codes appear on the backsides of the beautiful pair’s bikini bottoms to ensure fans get a prized photo.
The sponsor is Betfair, an online sports betting provider. The company is trying out the marketing technique this week during London 2012 beach volleyball tournament at Horse Guards Parade in London. The event takes place between August 9-14 and the sponsorship places the ads on Dampney and Mullin who are ranked 26th in the world.
“There is huge interest in beach volleyball and we want to ensure that our advertising campaign is seen and remembered by as many sports-fans as possible,” said Betfair’s Andy Lulham in a press release. “As far as we’re aware, this is the first time QR codes have been used in in-play sports advertising and what better way to test its effectiveness than by putting them on one of the places that is likely to get photographed the most.”
The Daily Mail reported that the sports stars complained just last week that fans in the UK see female beach volleyball players as sex kittens instead of athletes.
The sport requires female athletes to wear revealing clothing so QR codes only have a tiny bit of material to use. According to The Sun, rules say bras need to be “closely fitted to the body” and briefs with “a side width no greater than 7cm.”
“We go to countries such as Brazil, Germany and the USA where beach volleyball is a recognized sport like football or rugby is in England,” Mullin told The Sun. “But here in England we are still stuck at the stage where people think beach volleyball is about sex, not a sport.”
But sponsorship deals can also be lucrative, especially when it comes to renting out one’s tush. The two women are reportedly getting a five-figure payday for QR codes on their behinds.
This article was originally published on Digital Journal [Link]
Pixazza rebrands as Luminate, looking to make images more interactive
By Chris Hogg
The company formerly known as Pixazza has rebranded as Luminate and they’re launching a new platform today that changes what you think of when you hear the word “images.” Instead of being static photos, Luminate turns images into mini applications.
“Images are the center of the Web,” Bob Lisbonne, the company’s CEO, told USA Today. “But until now, they didn’t do anything. “We want to put little apps at the bottom of the image, so that there’s interactivity, there’s information, there’s functionality…behind every image you see online.”
So how does it work? When a user mouses over an image, they’re given a number of ways they can interact with it, such as shopping, sharing, commenting and navigating. For example, using the image above, when a user clicks on the Luminate icon in the corner of an image he or she is given options to see more details about the dress in the image, including links on where to buy it:
You can also share directly with friends via social networks; find out stats about athletes within photos; there are links to related info online; users can tag images based on geography and more.
The ability to layer product data onto images is not new, but Luminate promises a streamlined, simple process with a very reach feature set.
The company has racked up 4,000 publishers who now use the technology, including US Weekly, Hearst Digital Media and Access Hollywood. In addition, Luminate delivers ads seen by more than 150 million unique users per month — triple the numbers the company saw at the start of 2011. The new platform is expected to deliver even larger audiences across categories such as commerce, information, social, organization, advertising, navigation, public service and presentation.
Luminate has raised nearly $20 million in funding and competitors include Stipple, Image Space Media, GumGum and others.
The Rise of In-Content Advertising
by Oliver Roup (Guest Contributor)
Today, there isn’t a strong need for consumers’ schedules to revolve around their favorite TV shows, thanks in large part to the Digital Video Recorder (DVR). They allow viewers to record their favorite shows and play them back when it is convenient for them. As a result, the quantity of viewers watching commercials has dropped so they just aren’t as effective as they used to be. So advertisers have stopped relying exclusively on commercials to get their message out and are increasingly turning to advertising that delivers their message directly within a program’s content (commonly referred to as product placement). Integrating advertising into program content makes sense since program content is what viewers are truly interested in, where their attention is the most focused, and where an advertising message has the highest chance of being understood and acted upon.
The Evolution of Online Advertising
Today, we are seeing a similar transformation occur online. Originally, banner ads were the predominant form of online advertising, as commercials were on TV. But just as TV commercials lost their effectiveness as consumers changed the way they watched television, banner (and even text) ads are losing their effectiveness as online readers have grown accustomed to the spaces in web pages dedicated to advertising and have started to simply ignore these areas.
To illustrate this point, let’s consider the web’s first banner ads which went live on HotWired on October 27, 1994. The click-through rates (CTR) on some banner ads were as high as 78%. Today however, according to Google, the average CTR of a banner ad is closer to just a fraction of one percent (0.10%). What brought the figure down so significantly? Consumers realized that banner ads typically didn’t contain the information they visited the web site for and they started to ignore them.
A term called banner blindness was coined to describe this phenomenon, and numerous studies (complete with eyetracking heatmaps) have confirmed its existence. The following image demonstrates where readers’ eyes spend time on a particular web page. It’s clear that the banner and text ads delivered above and around web content are largely ignored.
An additional challenge banner ads face is that they aren’t delivered at a time when the reader is compelled to take action. So, even a well-designed and well-targeted banner ad may attract eyeballs but that ad won’t necessarily “convert” into an action because the reader isn’t looking for product information at that point in time.
These two limitations can be summarized as follows:
- Banner ads are largely ignored by most website visitors.
- Banner ads that are viewed don’t convert at a high rate because they aren’t delivered at a relevant time.
The solution to these limitations is to reach website visitors where their attention is, when they are ready to take action. A form of advertising called in-content advertising allows advertisers to do just this.
In-Content Advertising Overview
In-content advertising is similar to the product placement advertising options businesses turned to when television commercials began to lose their effectiveness. The category of “in-content” advertising can mean anything from tightly integrated, contextually relevant in-content links to text or banner ads placed between pieces of content. The discussion here will focus on the former due to its stronger performance and consumer experience.
Tightly integrated in-content advertising works for the very reason that banner advertising doesn’t:
- Website visitors see and interact with these ads. The content portion of the site is where readers spend their time and where their attention is focused.
- Website visitors experience these ads when they are actively seeking information. Web visitors are exposed to in-content advertising when they are reading about a product, service, or company that they are interested in, or when they are seeking advice on a product purchase.
Options
There are a variety of delivery options available for this type of advertising, most of which fall into one of two general categories: link affiliation or link insertion.
Link Affiliation
Link affiliation ensures that links inserted by visitors in a social media environment, or links inserted by an author within an article or blog post, are associated with online merchants and advertisers. Advertisers that participate in these programs pay publishers on a per-click basis (when traffic is sent via a link to their site) or on a per-sale basis (when traffic results in a purchase).
Some companies offer an automated link affiliation service that manages and optimizes link affiliation for site owners. Alternatively, site owners can sign up directly with advertisers and advertiser networks and manage the link affiliation process on their own.
As an example of link affiliation, let’s consider a site owner who posts a movie review on his or her site and opts to link the DVD’s title to a page on eBay where visitors may purchase the movie. eBay (the advertiser) gives incentives to publishers to send traffic to them. If the site owner is using an automated link affiliation service or has opted to manually affiliate the link with eBay they will receive a monthly commission payment reflecting the clicks or sales the link generated.
Link Insertion
Link insertion applies algorithms to a web page to infer its content and adds links to the page that is relevant to the page content. These links take the reader to a page on an appropriate merchant’s web site. Vibrant Media and Kontera are the best known link insertion providers, although their solutions tend to focus more on inserting ad units (think a link with a pop-up ad). Other services, including VigLink’s link insertion tool (Disclosure: I am the CEO of VigLink), insert product links.
Let’s revisit the example of the movie reviewer above to illustrate how link insertion services work. Here, the movie review that is published doesn’t include a link to the DVD’s title so a reader can easily find the DVD. Link insertion services recognize the title of the DVD and add a link to an online merchant’s site where a reader can purchase the DVD. The publisher receives payment when their visitors click on the link or purchase the DVD and the advertiser receives additional relevant traffic and sales.
The In-Content Advertising Advantage
In-content advertising offers advantages for the publisher, the advertiser and even the consumer viewing the ad.
Because these types of ads reach consumers at a point when they are more engaged and more likely to take action, publishers are typically able to deliver high CTRs and more conversions from these types of ads. In-content ads also introduce a new revenue stream for publishers that doesn’t require additional ad space because the ads are delivered within the content itself and don’t access the space around the content where banners are already placed.
Similarly, advertisers generally enjoy a strong ROI on these types of ads. Ads delivered within site content reach consumers exactly when they are seeking information about a product and can be very influential in purchasing decisions.
Finally, consumers benefit from access to product information at a time when they want to be connected with a particular product, company, or service (and of course if they wish not to be, they are still welcome to ignore these recommendations). Thus, these ads are more likely to be considered useful information as opposed to marketing “noise.”
Concluding Thoughts
The way advertisers elect to communicate with consumers is evolving as the way that consumers seek and digest information changes. Delivering advertising between slices of television programs during commercial breaks used to be effective, but this is no longer the case and advertisers have evolved to deliver advertising within the program itself.
The way consumers are locating information online is also changing drastically. Consumers tend to ignore banner ads, preferring social media sites, online forums and blog content to help them make purchasing decisions. In-content advertising leverages this monumental change in a way that benefits advertisers, publishers and consumers alike. It is an advertising form that has all the makings to be the web’s next big advertising frontier.
Oliver Roup is the founder and CEO of VigLink, a service that allows online publishers to earn money from the content on their site. Previously, he was a Director at Microsoft in charge of product for various media properties including XBOX Live Video Marketplace, Zune Marketplace and MSN Entertainment. Oliver was also an early employee at Internet Radio pioneer Echo Networks and has worked for Paul Allen at Vulcan, for iPlayer at the BBC and for the Founders Fund. Oliver has issued and pending patents covering micro-transactions, media and metadata. He received his bachelor’s and master’s degrees in computer science from MIT and his MBA from the Harvard Business School.