This article by Hollis originally appeared in ClickZ on August 26, 2008.

Earlier this year, the American Press Institute (API) released its “Newspaper Next 2.0″ report, a follow-up to its 1.0 report released in 2006. The original report focused on “discovering pragmatic and practicable ways for newspaper companies to create new growth.” Though it was received well, the API found that not much progress was made by 2007, particularly in the area of monetizing the Web.

The findings and recommendations presented in the 2.0 report apply to newspapers and regional publications, which are suffering from similar challenges, as well as competition from well-entrenched Internet pure-play regional sites.

Viewing these recommendations from the ad-buying side is valuable. Could this lead to better advertising opportunities for us?

Revenue Obstacles

The report identifies these main revenue growth impediments:

• Reliance on print products to drive quick revenue. This is their comfort zone, and it’s “easy” to implement.
• Use of existing sales staff to sell new, innovative products. Resoundingly, the report found that regional publishers need dedicated online sales reps. Online is a totally different sell and can increase sales to advertisers who only want to buy online.
• Lack of new offerings to businesses and small business. API also engaged Borrell Associates to analyze the Web advertising challenge. Borrell forecasts local advertising to grow from $8.8 billion this year to more than $15 billion by 2012, but local publishers severely lag behind in employing the fastest-growing sectors for local advertising: search, e-mail, and video. Few — even the innovators — offered anything but typical banners and buttons. A new category, “online promotions,” which includes discounts, coupons, and rebates; sampling and premiums; and contests and sweepstakes, has also been proven successful by innovative regional publishers.

How to Innovate

“Newspaper Next 2.0″ did a nice job identifying, showcasing, and detailing innovators in the local Web space. Innovation can be categorized in a few ways:

• Be your region’s “town square” site. Take a page from sites like IdahoIZ, a resource for area newcomers; MyCape.com, an umbrella site aggregating 16 local Cape Cod towns; and TribLocal, an off-shoot of the Chicago Tribune serving eight suburban communities.
• Focus on niche content or audiences. Check out sites like 209Vibe.com, a California music and entertainment site; Oregon Outdoors; and Swocol, which caters to southwest Ohio college students.
• Get people talking to one another. A notch above a community information site, attract repeat users and build page views through audience participation. Sites doing it well: 513Moms.com and 937Moms.com, mom communities within these area codes, and MonroeTalks.com, a hugely successful Michigan Web site built on three main interactive elements: a discussion forum, a calendar with user input, and a photo-sharing gallery.
• Create an entirely new platform. Created by The Dispatch in Moline, Illinois, DeliveringQC.com is a subscriber-retention and rewards Web site offering coupons and gift certificates from local businesses. Its innovative Value Vault eliminates the cost barrier for many small advertisers by enabling them to buy coupon advertising with gift certificates, which DeliveringQC.com then resells at a discount to consumers.

What About Marketing?

Despite the innovation and lack of diverse online advertising opportunities, these Web-only entities present a challenge to media buyers: how are we to know they exist, particularly if we and our clients are located outside the region?

Too small to be found through ordinary media buying tools and resources, localized sites like these who want to attract both local and national advertisers need to step up their own outbound sales and marketing efforts. When the default for so many media buyers is a Google search, these regional sites fall woefully short in being found compared to their more SEO (define) savvy Internet pure-play competitors.

Robert Martinelli, CEO of Today Media Inc., publisher of four regional magazines and Web sites, markets its publications primarily through direct mail, telemarketing, radio, and trade print advertising. He acknowledges the challenge of better online marketing as well as maximizing the monetization of the company’s sites.

Martinelli also made me aware of Godengo, a network of online city and regional magazines that looks very early stage from my media-buying perspective (i.e., needs improvement). RealCities, an online newspaper network, last week was acquired by Centro. MediaSpan Network and Internet Broadcasting System are other aggregators of local online media properties.

While regional media continue to figure out how to better monetize the Web, I would advise them to keep in mind ways to better reach their buyers. We do, after all, control some pretty decent purse strings.