Advertisers Wimp Out: ‘Boycott’ Glenn Beck, But Stay On Fox News

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Glenn Beck is in even deeper trouble over his remarks that the president is “racist” now that GEICO has joined Progressive Insurance, Lawyers.com, and Procter & Gamble in pulling advertisements from Beck’s Fox News show. Or is he?

Color of Change, a web-based grassroots group with more than 600,000 members that bills itself as “the largest African-American online political organization in the country,” has led a campaign to drive advertisers away from Beck’s show. They’ve been successful to a point, but the advertisers haven’t moved away from Fox:

From the GEICO press release: (emphasis added in bold)

“On Tuesday, August 4, GEICO instructed its ad buying service to redistribute its inventory of rotational spots on FOX-TV to their other network programs, exclusive of the Glenn Beck program,” said a spokesperson for GEICO Corporate Communications in an email to ColorOfChange.org.  “As of August 4, GEICO no longer runs any paid advertising spots during Mr. Beck’s program.”

From the P&G/Progressive/Lawyers.com press release:

“No P&G ads should have appeared on this program in the first place,” said Martha Depenbrock, Brand Building Stakeholder Relations for Procter & Gamble in an email. “To be clear, if any of our advertising appeared on the Glenn Beck show, it was in error and we appreciate you bringing this matter to our attention…”

“Our (advertising) order specifies no Glenn Beck,” said Linda J. Harris, Media Director at Progressive Insurance in an email to ColorOfChange.org. “We have confirmed with the network that our spots should not be running there.”

The reason these spokesmen were able to blame their ads appearing on Glenn Beck on technical problems with a straight face is because cable ad buys work differently from network purchases. Networks sell ads by time slot, but cable channels sell ads by number of eyeballs. If GEICO, Progressive, and the rest initially expressed preference for Beck’s slot, it’s relatively easy for them to heroically shift their ads to different slots while still getting their dollars’ worth. Fox holds onto the marquee advertisers. And as long as they can find replacements to air during Beck’s slot — and given his ratings, they likely will be able to — Fox and the advertisers are able to please everyone without addressing the gaping hole that is Glenn Beck’s initial remarks. Call it advertising shuffleboard.

Color of Change scored a legitimate political victory in keeping high-profile advertisers away from Beck’s program, but it’s unclear whether the move will have much financial impact, thanks to the tricks at Fox’s and advertisers’ disposal.

Online advertising and alternative revenue models

Though it seems natural that online advertising would slow during a down economy, we’re seeing signs that it will never reach the lucrative stature that the print industry has known for years. Blogads CEO Henry Copeland told me a few months ago that when it comes to highly-trafficked blogs, there’s too much supply and not enough demand. The ease of entry not only for publishing, but for entering the ad market as well — Adsense, affiliate links, etc. — has created an overabundance for cheap advertising, dividing it up into millions of $5 morsels that do very little for individual bloggers and take away advertising dollars from the bigger players.

This is not to say that content is worthless, but that people are having to find alternate ways of monetizing their sites. Bloggasm, for me, is a loss leader to sell my digital PR services, and we’re finding that more and more bloggers are using their blogs to make connections within their fields, leading to more lucrative jobs and contracts.

This creates a dilemma for many mainstream journalists, however, because of the ethics concerns that would arise if they used their content to promote paying gigs. We saw this with the Washington Post salons a few weeks ago. But still, journalists like Chris Anderson and Malcolm Gladwell have turned their celebrity journalism status into well-paying speaking gigs, and likely many lower level journalists have enjoyed at least some prosperity from the connections they’ve made through their journalism. But though this may solve a problem for the journalist, what does it do for the news organization?

For them, it’s simply a matter of clawing for smaller and smaller sums in advertising dollars.

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News Innovators on the Frontline: Pegasus News

Mike Orren launched Pegasus News in 2006 with the idea that local neighborhood news is more important “than things happening on the other side of town.” Now the site covers what appears to be every neighborhood in the Dallas Fort-Worth area. Although Pegasus has gone through some corporate turnover, it is now owned by Gap Broadcasting, which runs 116 radio stations in 24 markets. That alliance has Pegasus poised for an expansion. We spoke with Orren late last month.

Pegasus News was founded around local news, but you don’t like the hyperlocal tag. Can you tell us why?
Pegasus News banner.We launched at the time when hyperlocal was at the peak of being a big buzzword and we were sort of lumped in with that movement. But, I actually don’t believe there is a business model with hyperlocal. What we went after is what I call pan local.

You’ve got to have the hyperlocal neighborhood information in the context of what’s going on in the larger market. There is such a finite universe of people in a specific neighborhood that care enough to go out of their way to look for information and news about where they live, that universe is not enough to sell advertisers. But if you can put that in the context of ‘where am I going to go eat tonight, what’s going on locally in niche areas of interest that I have,’ that’s an opportunity to bring a lot more people into the fold. Then when you put neighborhood information in front of them they’re more likely to engage with it.

We cover all of Dallas-Fort Worth, but then we slice it up for the user geographically and behaviorally based on information that we gather from your clicks around our site.

We are not covering any one neighborhood at near the level of specificity that say a West Seattle Blog is. Though, there are some niches in those areas that we probably cover in that depth.

Still, local news is key to your editorial model. What is the plan for Pegasus News if the daily newspaper goes away?

A database of local political campaign contributions maintained by Pegasus News staff.

A database of local political campaign contributions maintained by Pegasus News staff.


Even though The Dallas Morning News isn’t going away tomorrow, we think they’re going behind a paywall soon. On the one hand, it’s a great opportunity for us to fill a void, because I don’t believe a substantial number of people are going to pay for that content. The flip side is it’s very expensive content to produce.

My view is that ten years from now you’re going to see more good real useful local news coverage than at any time in our history. But, between now and then there is going to be something of a dark age. Say the Morning News quits covering city hall. We haven’t yet grown enough to have people covering city hall. I believe there comes a point where the models cross and Pegasus or a network of blogs become sustainable to fill that void and even surpass it.

The question becomes what happens during that interim period. I tell people all the time, if I were a small local government person who wanted to pull some shenanigans I would do it in the next three years. Seriously.

When we launched I set out to truly be a replacement for the daily newspaper but the revenues aren’t there to sustain that. I would rather live and get our shots in and grow into that over a long period of time than kill ourselves and try to do something beyond our grasp.

What obstacles on the revenue side prevent you from taking that bigger role now?
The biggest obstacle for us on revenue has been brand awareness in the local marketplace. We’re pushing 500,000 monthly unique visitors. That is enough to sustain a business. The problem is we’re just now getting over the hump where we know when we go to talk to someone about advertising that they’re going to have even heard of us. That’s starting to change but it’s taken a long time.

What’s next?
We’re getting ready to launch sites in some of Gap Media’s markets. They own a bunch of the old ClearChannel staions, all in markets smaller than Dallas-Fort Worth. So, we will launch in Shreveport, Tyler and Yakima this year. We’ll have them on air constantly promoting us and their experienced sales staff out selling us.

First we’re doing a redesign, relaunch of Pegasus that will serve as the template for all of the sites to come. The database stuff is going to be done here in Dallas and we’ll have one person on the ground creating content in those markets.

Where do your revenues come from?
It’s all advertising, a combination of display, sponsorships, and direct marketing. A big part of our model is the ability to customize behaviorally and geographically. We’re able to sell ad campaigns that are very targeted. So even though it looks and feels like a display ad, there’s a lot more going on behind it.

Ad for FC Dallas on the Pegasus News website.We do some direct e-mail; some of our email blasts are ridiculously small. For instance, say you are FC Dallas and you want to push a ticket special for the game this weekend. We’ll send an email only to the 220 people who’ve shown an interest in FC Dallas based on their clicking patterns on our site.

We also have geo-located mobile ads on our iPhone app. Our app is much more transactional than news, so it lists garage sales, restaurants, concerts, gyms. We’ll show a sponsored listings based on where the user is.

How much did the app cost to develop?
It’s hard to say because we developed it internally. It took two developers three weeks. It’s a very simple app. We’re starting to look at some of the iPhone 3.0 possibilities and that will cost us some money if we go forward.

How well has the iPhone app gone over with advertisers?
Really, really well. They’re very excited about it. I don’t think we have anybody running who’s just running mobile. Generally they’re doing it as an add-on. But when we tell them we’re going to reach out to everyone in a 3-mile radius of your business, they’re like ‘that’s awesome.’

Revenues, Again

The first cut of our revenue opportunities list is now up here and in the side bar. We have another half dozen categories to add to this list, but please let us know if you think we’ve left anything out or missed the boat on something entirely.

From this first list, I was surprised by how many of the folks pointed to the value of a printed product. It is the most noteworthy area, of many, where my early assumptions were proven incorrect.

Jeff Mignon and Nancy Wang of Mignon-Media have been helping us with this project and were instrumental in developing this list of revenue opportunities.

Gawker’s revenues much rosier than expected

Nick Denton: ” I’d rather be wrong and thriving than right and dead.”

The plunge has already been pretty terrifying for a range of companies from Yahoo and IAC to the newspapers. But I was wrong in one respect: a few premium internet brands, Gawker’s among them, have withstood the advertising apocalypse.

Here is an updated version of the apocalyptic chart I published last year. The scale is removed but you can see that Gawker’s advertising growth continued pretty much uninterrupted: first-half revenues were up 45%. Sometimes there’s consolation to be found in congenital pessimism

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News Innovators on the Frontline: Voice of San Diego

As metro newspapers have faced an ugly year of decline and collapse, media observers have pointed to a number of not-for-profit efforts around the country that might fill the void. The Voice of San Diego is a notable example of a new breed of news organizations already taking up the slack, which is more than simply a theoretical discussion since the Union-Tribune was recently sold and endured a hefty round of layoffs.

Voice of San Diego bannerThe Economist, in a story on the future of the news business, called Voice of San Diego a “small, scrappy news website,” praising them for covering “nitty-gritty issues such as water, crime and health care—the sort of stories that local newspapers used to cover extensively.” The coverage has included an award-winning series on local redevelopment projects gone wrong. Founded in 2004, the Voice now employs 11 reporters, supported by a combination of foundation support (including the Knight Foundation, which is also funding this project), individual donations, and advertising. Their readership has grown too, peaking this spring at just over 60,000 unique visitors per month, according to Quantcast. We spoke to Voice editor Andrew Donohue earlier this week.

Voice of San Diego Editor Andrew Donohue

Voice of San Diego Editor Andrew Donohue

What is the key to the success you guys have enjoyed that others coming behind should know?
I think a really important thing is to have people from outside of journalism on your board. There’s a natural tendency to try to put a bunch of journalists on your board, in actuality that’s what you know as a journalist. We have people who’ve run start ups, who’ve done venture capital, people who’ve had to know how to run smart agile and small companies and learned to adapt to changing technologies really quickly. That’s a huge plus for us. They challenge you to think in ways you probably wouldn’t have otherwise.

Another one is to be incredibly focused on what you’re covering and to know you’re personality from the start. So many people, if they’ve come from a big newspaper, want to try to be everything to everybody, they want to be that general interest, department store kind of publication. Inevitably, if you start something like this you’re going to have a small staff and you need to be incredibly focused and just be the best at something rather than be okay at a lot of things.

When you know your personality you can make news decisions a lot easier. Everyday you have to balance what you cover and decide if you’re going to chase that story or ignore it, put your head down and keep going on a longer-term project that you know you have and that you know no one else has. Or are you going to be one of eight reporters at a press conference.

I’m glad you mentioned the importance of being focused. You’ve written about the luxury your reporters enjoy in not worrying about being a general-interest paper of record, that they “learn how to let the small stuff slide in order to go after the more ambitious stories.” But, what happens if the San Diego Union-Tribune folds? That would take away your ability to lean on that paper of record and go after the high-impact stories, right?
You’ve asked a question that we’ve thought through a hundred times. First, my hope would be that even if the UT did cease to exist, there still would be other publications to do that day-to-day coverage.

Second, I think a lot of that information is being distributed directly by these a lot of these organizations now. You have the fire department and police department with their own Twitter feeds and websites. For a long time reporters have served as the police blotter and simply transcribed that back to the public. A lot of the time people don’t need a reporter translating that stuff. So I’m hoping that the barriers to distribution being lower some of this stuff can be communicated to people without a middleman. The idea is that we would be there to fact check and go after the more interesting and necessary stories in-depth.

There will be an ecosystem to replace a lot of that, but what you’re going to see are a lot more but smaller publications.

But, do you envision an expansion of the Voice of San Diego to take up some of that slack? Which gaps would you fill?
We’re envisioning that anyways. We think there is some really interesting and intelligent ways of doing arts and sports that haven’t been done by traditional media through blogs and building communities around readers.

We would certainly like to have a dedicated investigative team. We wouldn’t mind doubling back on some of the things we already cover. We have one full-time political reporter and a region certainly needs more than just one of those. So we’d certainly double back on things like politics education housing and the economy. There are a lot of things we still don’t cover like health care. We have a lot of business stories here that aren’t always told.

So, how do you plan to pay for that expansion and build something that is sustainable without relying on foundation support?
Knight has always been clear that they are not a long-term solution. But, if you look at public broadcasting they still do get funding from foundations. So, we believe we are sustainable. But we don’t ever want to have to rely on one or two revenue streams.

We’re starting to dream up a lot of different ways to monetize different things. We’re laying the foundation for a syndication service. Another is an obituary section with different levels of service that you would pay different amounts for. We’re also looking at producing reports or content for people very specifically.

None of those are in play right now, as far as getting money, or have any of the rules built around them, but that’s what we’re incubating.

Can you tell me more about the syndication idea?
With the contraction of the last six months, not only in print but also in radio and television, we’ve seen a drastic increase in the desire to partner with us. At the start we were overjoyed to have a partnership with say the NBC affiliate because we had access to a whole new audience that we wanted to get to our site and to magnify the impact of our stories.

The more that that’s happened, the more people have asked us to partner, we’ve realized that the quid pro quo, the trade off, isn’t as great for us, now that we’ve done a pretty good job of getting into those markets.

The trade off for our content no longer is just publicity and we can’t continue providing free content to a bunch of for-profit companies without exploring a way to get some of that money back. So, that’s a primary one. Also, if there is going to be a void in the media world we also have an obligation as a non-profit to fill it with public service reporting and high quality news.

Also, part of our metamorphosis is understanding that we’re not a website. A website is the main way that we distribute our information right now, but that’s not in our mission and that’s not our identity. As soon as we’re okay with that, then we’re okay with syndicating our content and then we understand there’s a lot of ways to engage people. For some people that may be the website, for others that’s us putting on on a forum about housing or the economy or post-election analysis.

Those other outlets cut both ways. Yes, they’re great exposure and allow us to fundraise, but they also allow us to get our stories out.