By Ken Doctor, Nieman Journalism Lab
Main Street is finally going digital. With the digitization of smaller business, newspaper companies believe they’ve found that elusive third leg of a business model — a model that could keep them standing, maybe even taller, into the second half of this decade.
We’ve see “marketing services” grow as a business pursuit over the past couple of years. Now — as newspaper publishers have just left the “Key Executives Mega-Conference” in New Orleans, where such services led off the weekend with a three-hour session — we can characterize it as the number one new business pursuit of many U.S. newspaper chains. It’s the new initiative they are most heavily investing in. In fact, in surveying the field, I’m estimating that marketing services revenue could equal at least 10 percent of newspaper company ad revenue — pushing $2 billion — by 2016. Aspirationally, this is the third leg of newspaper revenue — after advertising and circulation revenue — publishers know they need.
The business push goes by several names: marketing services, digital services, “becoming a regional agency.” Those terms all point to the same business, which targets small and medium-sized businesses (SMB). It’s a category of businesses many dailies long ignored — in the good times of 20-percent-plus profits, why focus on pennies, nickels, and dimes when the dollars were busting down the door? When Macy’s, Best Buy, and Safeway were subsidizing ink by the barrel, paying high rates, insertion orders were worth five figures.