Saturday, January 12, 2013

You create more value with 'community' than 'audience'

Versión en español aquí.

When I teach entrepreneurial journalism, the first thing I emphasize is the need to create a community.

An audience is just a group of observers.  A community shares values and a deep interest in a topic or geographic area. It often has a bias toward action. That is where value comes in.

Connecting these people and creating value for them is the beginning of a community. Only when you have connected them can you begin to get their financial support.

Memberships, not paywalls; sponsorships, not ads

I was reminded of the power of community, as opposed to audience, when reading Martin Langeveld's post for Nieman Lab on what is ahead for journalism in 2013.

As Michael Skoler suggested a couple of years ago in Nieman Reports, when paywall thinking gives way to membership thinking, the business model becomes community rather than audience. “To harness this model,” Skoler wrote, “news organizations need to think of themselves first as gathering, supporting, and empowering people to be active in a community with shared values, and not primarily as creators of news that people will consume.”
Putting a price tag on membership

Texas Tribune, a digital news organization focused on government and education, embodies this new way of thinking. It offers six levels of membership and a sliding scale of benefits, from $10 to $500 a year. Its three sponsorship levels run from $1,000 to $5,000 a year.

Think about that. By offering not just a product but access, privileges and opportunities to mix with the community, Texas Tribune is able to ask for far more than it might from an individual paywall transaction.

On MinnPost's membership page, we learn that "membership means that you are part of the MinnPost family, helping us achieve our mission through ongoing financial support." Membership brings privileges, discounts and networking opportunities. The asking price is high, $120 to $600 a year,.

Premium pricing for sponsorships

As publisher of the Baltimore Business Journal, I found many clients preferred a relationship with a trusted, credible brand rather than simply buying space, and they were willing to pay a premium for it.

Businesses that wanted to become part of the community paid $5,000 to $25,000 to sponsor a single event and data product such as The Book of Lists or Best Places to Work in Baltimore.

When you think of community rather than audience, you no longer have to fall into the pricing trap of advertising contracts based on CPMs (rapidly falling, by the way), page views, unique users or clicks. This is old-fashioned brand-based advertising that still works on a community level, despite all the naysaying by data-driven sales organizations.

A digital media outlet that has a reputation for credibility, strong ethical standards and community service will appeal to many advertisers who want to align their brands with those values. You can still sell the magic of the relationship.

An old model that works for entrepreneurs

In 18 years as an editor and publisher of weekly business journals, I was amazed at the emotional language people used to describe our paper. "I love your real estate coverage," some would say, or "my favorite part is the bankruptcies and tax liens" or "I couldn't do business without your Top 25 List".

Readers believed the news and data we gave them helped them get leads and ideas to build their businesses. We helped them realize their goals and make money, and they loved us for it. It was their community as much as ours.

The value of local information

I like to tell this final story as an example of how valuable the work of local media can be. I hope it inspires local media entrepreneurs.

It comes from John Moag, a sports business consultant who was hired by Baltimore Ravens owner Art Modell in 1999 to find a buyer for the team.

Moag was trying to make a list of potential buyers. They would have to have millions and deep local ties. Where to look? He described to me how he pulled out his copy of the Baltimore Business Journal's Book of Lists and went to the list of largest privately owned companies. Of the top 10, four were owned by someone named Stephen Bisciotti, who had quietly amassed a fortune in staffing and recruiting companies.

Moag sought out Bisciotti, who eventually agreed to buy the Ravens for $600 million. So, a news organization knew its community's interests and produced research that the community valued. And a member of that community knew where to turn when he needed help. There is more value there than the price of a subscription.


No comments:

Post a Comment