E-commerce and news, lessons from the UK’s Telegraph

Revenue, revenue, revenue. For good reason in this economy, all of the sites we’ve talked to so far have wanted to hear ideas for making more of it.

So we’ve been a bit surprised at how few are experimenting with e-commerce, which is frequently held up as a strong potential revenue stream for online news. Sure, we’ve heard from a few sites making good money from t-shirt sales and affiliate programs.

But American publishers should heed the experience of the Telegraph in the UK, which started launching a series of e-commerce efforts in 2008. The 154-year-old newspaper now says that a hefty percentage of its revenues come from online users buying those goods and services directly through the site. That’s a nice figure going onto the P&L as advertising revenues continue to shrivel.

“One shouldn’t expect advertising on its own to support the costs of a newsroom,” says Edward Roussel, the Telegraph’s digital editor. “E-commerce is less cyclical, less prone to downturn and more reliable as a revenue stream.”

The Telegraph has been quite successful getting readers to pay for access to games or to services that highlight the organization’s databases. The site’s fantasy football and cricket service and CluedUp, a brand aimed at puzzle nuts, have been perhaps most successful. The Telegraph also gets a commission on transactions made with their personal finance and sports betting partners.

TelegraphShop - e-commerce and the newsOf course, the Telegraph sells merchandise, too, ranging from tulips or a pond vacuum in the garden store, to Panama hats sold in the travel section. Roussel says developing a system that seamlessly matches product to editorial content is still a challenge, but he envisions a day when the e-commerce gardening application will recognize the rose in an article and serve up offers for that rose or something close to it.

Roussel says not all merchandise lines work as well as others, saying the fashion shop, for one, hasn’t broken through as hoped.

“That’s not how people view a site like ours, they don’t view us as a destination to shop,” he says. “That means we have to work harder to come up with the partners that will work.”

Roussel says that publishers need to embrace the ways in which the web has drastically “shortened the transaction chain” between advertiser and consumer. Whereas advertising used to be about delivering information to readers so they could then go out to make a purchase, Roussel says, “now we can say: do it here and now. That’s the value added for news sites–allowing people to make the acquisition on the spot.”

Far better, he thinks, for news sites to embrace this updated approach–providing valuable services for a fee–than to erect paywalls around content that in the age of Google is readily available elsewhere (an opinion echoed here today).

“The fundamental value of journalism is that you pull in a wide audience, then you can direct them to a series of high value services that they’ll pay for,” Roussel says.

News Innovators on the Frontline: CityBizList

CityBizList is a free email product sent to business people every morning in five metro areas—Baltimore, Atlanta, Philadelphia, Boston and Washington, D.C. Founded in 2005 by Edwin Warfield, CityBizList is aimed at the general business readers, but with an added emphasis on commercial real estate and the lawyers and bankers who serve that industry in each city. They also have a commercial real estate email for the state of Maryland.

Warfield and his partner, Jay Rickey, produce the emails for each market everyday, with an assist on production from partners overseas. They see an opportunity to fill a void in local business journalism as both daily newspapers and business weeklies struggle with their print legacies and a sour advertising market. We spoke to Mr. Rickey late last week.
CityBizList--Baltimore
Can you describe the product and your editorial process?
Everyday is a grind. We’re generally running 35 to 40 headlines everyday in each of the five markets that we’re in. So, Edwin and I are buried in SEC filings. We get a lot of our news from public information that generally journalists don’t go get. We also post news from different sources, whether blogs and other news sites that allow us to reproduce their information or press releases we receive.

You have an outside contractor in India handling some of your production and editorial work. Can you tell us a bit more about that relationship?
They do a lot of work for us. We serve as the creativity behind all of the work, to make sure that it’s locally relevant. But as far as some of the manual labor, even some of the editorial judgment, there are companies over there formed by people who have earned their MBA in America and went back to India. They’re brilliant people, and the costs are lower.

Generally, they compile the information, post it to the site, and show it to us to make sure it reads properly. On top of that, if there’s an SEC filing that comes out, as I’m scouring an 8-K or 10-k, I pull the information I want them to summarize for me. I understand what’s newsworthy, I just don’t have time as I’m compiling 20 news stories everyday to actually do all of that work.

Your business is completely based on advertising and you sell some that advertising yourself. How do you feel about selling advertising as a journalist?
I was associate publisher and general manager of a real estate publishing group in Chicago and I think if you were to interview my former editorial team they will tell you that I’ve skated that line as well as any body they’d ever worked with.

Coming from journalism school, I understand the journalism side. But I also understand that companies need to make a profit. I’m fine with it because I’m an entrepreneur trying to create a business. I’m okay with it, but that’s just me. I think other people would not be comfortable with it.

Do you think journalists should work on becoming more comfortable with selling ads?
I think that sales people and journalists are two completely different personalities. Most of the journalists I’ve worked with would never ever want to be on the sales side, it’s just not in their personality. Whereas on the sales side most of these guys wouldn’t know how to write a sentence, but they’re great communicators, they love to go out and schmooze with people. There’s just not a whole lot of people that can do both sides.

How many markets do you plan to get into? What comes next?
We’d like to be in 10 markets by the end of the year. It would require that we get a little bit of vc funding. The staff would come through. We’d like to hire a managing editor and an outside sales person. Those would be our next two positions, but we would need a little bit of funding in order to get up to the next steps.

How do you identify those markets? Is it based more on advertising or editorial?
A lot of it is synergy based on locations we currently serve. It’s both advertising and editorial. For advertising, there’s a historical theater that’s being auctioned. The client, a local development corporation, is advertising in Philadelphia, D.C. and Baltimore. There’s a reason for them to be advertising in multiple markets.

Editorially, for instance, today I had a story about a new retailer coming on to the market in Prince Georges County in Maryland. That’s an interesting story to both the Baltimore and D.C. markets.

We broke the story this morning, before most other media markets had it, that Smith & Hawken was shutting its stores. The SEC filing came across last night. That ran in every single market because its pertinent in all of them, so that story got re-purposed. With a b-to-b crowd there’s some interesting things you can do.

What do you see as an obstacle to the growth of your company?
The primary thing is revenue, and it should be that way with anyone you talk to. Let’s say the Chicago Tribune went down. There are still 150 to 200 blog sites out there that get a pretty good audience. So, why couldn’t the Tribune be a central source of information from all of those blog sites. Then you could establish a sales force to represent those sites—it would have to be some sort of revenue sharing model.

I would think that an outsource sales staff that someone that’s launching a site like ours could turn to would certainly create an opportunity for people like Edwin and I to grow more quickly.

A Budding Investigative News Network

p1000899Watchdog journalism has a viable future.

Twenty-five nonprofit news organizations recently came together to form the beginnings of an investigative news network to fill in the growing void left by newspapers.

Some of the budding network’s members include Bill Buzenberg, executive director of The Center for Public Integrity, and Leonard Downie, Jr., former executive editor of The Washington Post.

The network’s first conference at the Pocantico Estate in New York established a shared aim to foster the “highest quality investigative journalism,” and addressed more personal concerns for the reporters and editors involved, i.e. employee benefits, health care, and general liability insurance — aspects of journalism you don’t hear about too often these days.

Neiman Lab talks about some of the finer points behind the network’s creation, including ProPublica’s decision to remain outside.

While there’s plenty of work to be done before the network begins bird-dogging the bad guys, several key questions were raised during their initial conference:

  • Should there be a website that aggregates content from network partners?
  • Should alignments be by geography or subject area or both?
  • Should the frame definitely be “investigative” reporting? Or “public affairs”?
  • Who signs off on a story?

So, as we prepare for an upcoming Q&A with Trent Seibert of Texas Watchdog — one of the 25 organizations at the Pocantico conference — we will also continue to track the network’s ongoing development.

In the meantime, you can read their lofty declaration on the conference’s home page. Or click here for a more layman summary.