Feeding a news story to a journalist is an effective way of getting publicity. But you need to be careful.

Journalists have an ethical code. They are not for sale.

Many people mistakenly think applying commercial pressure influences the way journalists approach stories. For example, by saying you'll advertise in their title.

This can work with some journalists in certain circumstances. Most of the time threats or promises do more harm than good.

At best you will insult them or offend their professional pride.

At worst they'll decide not to risk touching your story in case they are tainted. Or they may underline their independence and cover your story with a more hostile approach.

Even if they bite, they may not see the story the same way as you.

Remember, their loyalty is to their readers. Journalists don't see helping your sales as part of their job.

This sounds confusing – media companies sell advertising so you might think journalists would jump at the chance of boosting sales. They like advertising, but they won't trade their integrity.

Journalists have a long term view. They know readers have more respect for titles with a strong ethical code. This translates to commercial success.

Respected titles have more readers, so they sell more advertising. They also get a better class of reader, which means a better class of customer for advertisers. Research shows advertising is more effective in credible titles.

Businesses wanting to grab people's attention have two options: advertising and publicity. They are not the same.

Advertising is a commercial deal between your business and the media.

You buy a fixed amount of print space, billboards, radio or TV airtime, or web traffic. You take responsibility for providing the advertising material – called copy in the industry – at your cost.

If you've got the budget, you can hire creative specialists to prepare the copy for you. It's usually worth the cost. Advertising professionals know how to get results.

As an advertiser you are in control. You decide when and where your adverts run. You have the last say over the message.

Advertising is expensive. Publicity is often cheaper. It is also riskier.

Publicity is when you grab people's attention in other ways. If you hire a publicist, a public relations expert or a press officer, those people will attempt to place stories in the media on your behalf. They can't usually guarantee anyone will sit up and take notice.

You have far less control with publicity. It works best when you have something newsworthy or interesting to say. If it isn't interesting then the media will ignore it. And your story can be crowded out on days when there are other more interesting stories.

Editors and journalists' first responsibility is to their readers. It's not their job to sell your business. It is their job to keep readers informed and interested.

Publicity is a scattergun. It can work. It might not. Use advertising to make certain your message reaches your target audience. It acts like a guided missile and costs about as much.

Bad advertisements make me wish I used an ad-blocker.

Take noisy online advertisements. They wake up my sleepy family, disturb co-workers and interfere with telephone calls.

Thanks to them, my computer speakers are switched off a lot of the time. I miss useful audio cues.

An ad-blocker might be handy dealing with video commercials and those annoying animated things that dance across the screen.

But I'm not going to block ads.

Advertising pays for the best stuff online. Without online advertising, we would have to pay for everything we read, hear or see on the Internet.

There's nothing illegal or immoral about blocking ads. Ad-blocking isn't killing the internet.

But it is damaging. It means publishers invest less in writers and other media. It means there are fewer jobs.

I'm a journalist. I earn a living because people pay me to produce words.

There are three ways I can get paid:

1. Commissioning: People pay me directly to write.
2. Copy sales: Readers buy a print publication or subscribe to an online title or go through a pay wall.
3. Advertising: Advertisers pay me when somebody reads my words and, at the same time, looks at an advertisement.
   

If you want to read online and you block ads, then subscribe to online pay wall sites or start commissioning copy because these are the only two options over the long term.

Phillip Smith at Cliptec thinks online news is hard to read. He says:

It’s ok in small doses. But try a reading a whole paper online; it’s awful.

Smith has a point.

Online newspapers aren’t designed for easy reading. Publishers are more concerned with pushing advertising down reader’s throats.

It isn't just distracting animated ads. There are pop-out movie ads, bursts of sound and giant pop-ups which dance around in front of text.

They give a new meaning to “in your face”.

Publishers know passive online advertisements no longer work. Hardly anyone clicks on a banner these days and Google ads are not much better.

They need to make money. But there’s a danger they will kill the business by alienating readers.

If publishers told readers paid content means less advertising crap, they might be more willing to shell out for online news.

Advertising sales revenue is the money publishers make from selling space in their titles.

Most publishers set aside printed pages or parts of printed pages for advertisers. The number of pages compared to the total number of pages in a publication  is known in the business as the advertising ratio. Paid for publications have a lower advertising ratio than free publications.

Advertisements fall into two categories:

• Display advertisements are larger and more colourful – they can have highly creative text and images.
• Classified advertisements are smaller and usually only text with a minimum of graphics.

Magazines typically sell display advertising by the page, although they offer double page spreads, half pages and other formats.

Newspapers sell pages, but they also sell column centimetres (or column inches). Classifieds sell as column centimetres, as lines of text or in some cases by the word.

The more you buy the cheaper it gets

The more advertising an advertiser buys, the cheaper the rate per column centimetre (or page if they are buying magazine ads). So a full-page is cheaper than two half pages and so on.

Publishers offer advertisers discounts if they commit to buying a series of advertising over a period such as a year or six months. So, booking a year’s worth of advertisements in a monthly magazine is cheaper than buying 12 single advertisements.

Some advertising positions attract a premium rate. On newspapers this would be the front page and maybe the front pages of the internal sections. Magazines typically charge extra for the back cover and possibly the inside front cover. Successful titles can also get away with charging a premium for early right hand pages or other attractive sites.

Agencies and commission

Advertising is often placed by specialist media buying companies who develop strategies for their clients and negotiate with publishers. These companies earn a commission. Typically this is between 10 to 20 percent of the booking’s value.

In return for commission, media buying agencies contract to pay their invoices by a set date after publication – typically a month or so after the advertisements appear.

Advertisers who buy their own space are known as direct clients. They can haggle over prices, but unless they are large-scale buyers of advertising, they have less clout than agencies who can buy in bulk. It is often harder to collect money from direct clients than from agencies.

Rate cards

Publishers issue rate cards which show the prices or rates for each type of advertisement. Historically they were cards, but now they are usually available online, try Googling the term to see some. Rate cards prices are often, but not always negotiable. They also describe available advertising formats. Depending on circumstances rates shown on rate cards are negotiable.

When an advertiser or a buying agency buys advertising they are usually buying reach that is a publication's ability to reach so many potential customers.

Advertorial

People in the business use the term advertorial when publishers offer advertising linked to editorial features, or in some cases when a publication's editorial integrity itself is up for sale.

Advertorial deals come in many flavours. Many publications are more or less entirely made up of advertorial material – if an advertiser pays for space they are given a degree of say over what appears in the publication’s editorial content.

More credible titles wall off areas of content for advertorial projects. These might be clearly marked with terms like “advertising supplement” or “special advertising feature”, but it isn’t transparent to the reader.

Some publishers run editorial-style material provided by advertisers and charge for it. Others allow advertisers to send copy for inclusion alongside paid advertisements.

Publishers may or may not allow advertisers to sign off on their advertorial content. Some publishers will have journalists write advertiser-friendly copy for these sections, others keep up a strict demarcation between editorial and advertising.

The advertising business model

As a rule, free publications are more likely to run advertorial and compromise editorial integrity for commercial consideration than paid-for titles. Paid titles are less likely to take this approach. Some paid titles have little in the way of advertising and charge a hefty premium for quality editorial content. This works best if they can manage a high circulation.

Have I missed anything here? Do you have any questions about how this works?

Other articles in this series:

Where the money comes from: - an introduction to traditional print publishing business models
Copy sales: – how traditional print publishers make money from selling copies

This is a look at the print publishing business model. It is oversimplified, but the big picture is more important than the details.

Revenue

Historically print publishers earn revenue from copy sales and advertising. Some publishers, mainly in the trade press, rely solely on advertising.

Others, such as book publishers, rely solely on copy sales. Most newspapers and magazines make money from a mix of the two.

The balance between advertising and copy sales revenue usually determines a title’s editorial strategy.

The revenue part of a publication’s business model is simple:

Revenue = copy sales + advertising sales

Publishers who rely mainly on copy sales for their income typically spend more on producing quality editorial to attract readers.

Advertising-focused publishers put less emphasis on editorial. In extreme cases, they do away with editorial all together producing publications which closely resemble catalogues.

In part 2, we'll look at print copy sales.

The Bulletin's last front cover

When Lachlan Murdoch says the Internet is having an effect on classified advertising, it's time to believe some of the hype from an industry that's never short of a boast. The chairman and CEO of News Ltd was reported expressing this view following his company's annual general meeting last month.

He followed these comments by saying that his organisation is focused on the matter. This is probably an understatement. Murdoch's News Interactive division is one of Australia's leading Internet content providers and already has a substantial on-line advertising operation.

News Interactive may not be making money at this stage, but for now staking out turf in cyberspace is more important. Even so online success for News is hard to define. There are reports that the organisation's on-line Information Technology recruitment advertising is stealing copy sales from Tuesday's Australian. That may be desirable in the long term, right now it's a problem.

While Murdoch argues that television stations have more to fear, there is evidence newspapers will find the going tough. In mid-October, Mark Webber, vice-president of classified marketing groups at the Minneapolis Star Tribune described his paper's performance to delegates at the Pacific Area Newspaper Publishers Association. He said his paper's classified revenue grew 20% in 1997. In 1998, this growth was just 1%. When asked why the growth stopped, Mr Webber gestured at Harold Levy, CEO of TMP Australia and said the cause was TMP's online recruitment service, The Monster Board.

More chilling is the fate of the San Jose Mercury. Based in Silicon Valley, the Mercury is America's top newspaper for computer industry recruitment. Last year, the paper suffered a 40% fall in classified recruitment advertising revenue. Given that Australia is about a year behind US in Internet advertising trends, from New Ltd's point of view, the worst may be yet to come. Or is it?

Australian publisher profits online

At least one Australian publisher has profited through the transition from print to electronic publishing. Roderick Mcallery is a director of Commercial Dynamics, which publishes the Trading Post group of papers. Mcallery said, "the Trading Post site succeeds because it offers better utility than other classified web sites. Our base content is better. Suppose you want to find a Mazda 323. Search other sites and you might find ads that feature 20 cars from a single dealer, where only one is a Mazda 323. With our car ads, the rule is one advertisement, one car. Which means the same search on Trading Post will only deliver Mazda 323s."

He said another advantage is that Trading Post ads are costed by the word, while big papers charge by the line. This means his advertisers tend to use fewer confusing abbreviations, making the entries easier to understand. At the same time, the Trading Post insists that advertisers indicate location and price information. The result Mcallery said is a content delivery system designed for speed and to ease the search process.

In other words, Trading Post works because it has approached classified advertising from the customer's perspective. In this case customers are advertisers and potential buyers.

Industry gossip says Commercial Dynamics is the only company currently earning substantial revenues from Internet classifieds. The truth of this statement depends on how you define Internet classifieds.

Australia's Most Successful Websites

According to Marc Phillips, author of 'Australia's Most Successful Websites', the key to profitable Internet publishing is to discard conventional publishing business models. Phillips is a director of APT Strategies an Internet monitoring organisation that publishes Australia's online readership survey.

He said, "Traditional newspapers make their money from a single revenue stream. The cover price barely pays for printing and distribution; the real money is in advertising. On the Internet, where distribution costs are lower, companies make their money from multiple revenue sources."

Phillips offers the traffic deal between travel.com.au and Yahoo!, the popular site directory, as an example. Like all such deals, the specifics are confidential, but generally traffic deals involve paying a percentage of the final transaction or a fee per visitor delivered to the site. He said, "These guys are all leveraging their eyeballs off to get e-commerce revenue".

And there's the rub. While the Trading Post's content lies in information rich advertising, other media organisations like News Ltd, Fairfax and Kerry Packer's PBL have to find leverage from other content assets. And it appears that, in some cases at least, they are already getting the message. In PBL's case, leverage works across traditional and online media. A television viewer watching say, Channel Nine's Getaway program, can be delivered to the Getaway pages on the NineMSN website. Once there, they don't just view travel advertisements, they can actually book and pay for their trip. There's imply no equivalent of this process in traditional media.

So, this Internet sales model works thus: publishers offer worthwhile content to attract visitors. Once they reach the site, they are offered a variety of ways of generating revenue. This variety is important. Phillips says his online readership survey found that 28% of people browse online, but purchase offline. They might use the Web to compare prices or product specifications. Only 21% had actually purchased online.

Marcello Silva, national interactive manager for TMP Worldwide agrees that content is the key. Silva, who has responsible for The Monster Board in Australia, describes his product as a globally branded career management operation. He says to compare the Monster Board with online classifieds misses the point. The Monster Board is a one-stop shop where recruitment advertising is just a single element in a complex mix that includes a lot of advice.

Silva said, "TMP trades on NASDAQ, its value rises and falls with the technology sector. Our vision is to become the online global hub for career management. We've tailored our service to give people a helping hand as they progress from their first job all the way to the boardroom." Clearly, TMP is a long way from newsprint linage ads, yet it is still seen as part of the online classified scene.

Melbourne-based Matthew Rockman is a director of Seek Communications, which operates a web site featuring job advertisements from some 200 recruitment companies. Seek competes with TMP, but approaches the market from a very different perspective.

Rivers of gold pour through classified advertising

Like many other Internet entrepreneurs, Rockman's sights are set on the fabled rivers of gold that pour through the classified advertising departments of Australia's major newspapers. He says that traditional publishers like News Ltd and Fairfax are in the Internet market because they have to be. "They don't want to be here, they only want to protect their profits".

While TMP is vertically integrated, Seek Communications is aiming to own a horizontal slice of online recruitment by opening a marketplace where job seekers can interact with recruiters. Rockman said with some 4800 current vacancies, his site offers the greatest range of Australian jobs. He said job seekers will be attracted to the site simply because its where the most jobs are.

Right now it seems that some Australian publishers are still grappling with basic business models. Meanwhile, a new threat to the traditional classified has appeared in the US. New sites like eBay have been described as classifieds on steroids. They let users provide their own content in a seemingly anarchic online swap meet. If they take off here, Lachlan Murdoch won't be the only media executive noticing an 'Internet effect'.

This story first appeared in The Bulletin in 1999.

Computerworld Australia reports IT job advertisements continued their slide in May, which is bad news for tech-oriented knowledge workers. Overall job ads fell by 4 percent in May and 52 percent for the 12 month period ending in May. The number of IT job ads fell 58 percent over the 12 months. The numbers are taken from Olivier job index

The good news is the decline is is slowing down and part-time and contract positions were up during the month.

via IT jobs slump 5% in May: Olivier – Computerworld.