July 11, 2006

The Publisher’s Unique Online Value Proposition

by at 5:01 PM

In recent posts I've discussed the economic issues with the current ad supported online publishing model, especially in comparison to search economics, and wondered what the future holds for the traditional media companies online.

Given that the current online publishing model has thus far not managed to make a meaningful contribution to the overall performance of most traditional publishers, it struck us that perhaps some new product thinking was required. Some background first though.

Search vs. Publishing

Advertisers love search -- that's the ad product that online publishers are now competing with. While search is certainly a great product for advertisers, it doesn't solve all their problems. We believe that the shortcomings of search are exactly the areas where traditional publishers excel:

  1. Serendipity. Search by definition is a lean forward experience -- an intent driven user acting on that intent. But that's a limited audience. Many customers become intent driven only after they've been given some info. "Oh, sweaters are on sale down the street? I didn't know that -- and I need a new sweater" This type of serendipitous experience/ event marketing is completely missing from search marketing.
  2. Location, location, location. Local advertisers advertise in their local paper as they know the readers are predominantly within their market. With search, there is no way to localize that activity - other than through unreliable IP sniffing - who knew Dulles, VA had so many residents? ;) With ZIP code level news, we believe that delivering local audiences is Topix.net's specialty, but other publishers do it as well.
  3. The 'everyday product dilemma': if you stock everyday products in your store, one way to differentiate yourself from competitors is to advertise price differentials. 'Diet coke 2 liters $.99'. But who Googles 'Diet Coke'? Who goes to a search engine to find out where they can get the best deal in their neighborhood on Diet Coke? No one. To get this message out, traditional publishing is needed.
  4. Branding: as the form factor for search ads is limited, so is the branding opportunity. Sure, there may be some value in the search 'view through', overall it is not a platform where a branded experience takes place.

The Results

So, with all that, we scratched our heads and thought of products we could deliver that would capitalize on the unique value a publisher brings to the advertiser.

Today, we are pleased to announce that, in cooperation with our sister company ShopLocal, we've taken a first step in trying to crack this code. The ad product, which can be seen here, here, or in 5,000 other local markets on our site, is a branded ad campaign that integrates product data in a geo-relevant contextual manner, and highlights specific product and sales information unique to each individual local store. Serendipity, branding, ordinary products, sales info, geo-targeted -- it's all there. And it's done in a way that is not intrusive or annoying, but rather adds value to the page. In other words, we believe this is both a great advertiser AND user experience. While Topix.net delivers an audience that is geo-targeted down to the ZIP code, perhaps we are uniquely situated for this particular unit. But we believe the idea can be translated to many audiences and many publishers.

We understand that in the general scheme of life, this innovation takes a back seat to the wheel, sliced bread, canned beer and many other things. But we do believe that in the world of the publishing industry, this type of ad unit is a major first step in highlighting where the traditional publisher's unique value proposition plays in the online world.

The full press release is in the extended entry below.