The Salvation of Newspapers: Online Local News Networks?

Offering National Marketers Incredibly Local Ad Penetration

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The onslaught of interactive technologies has persuaded many -- especially those in broadcast media desperate to retain their fragmenting audience -- to adopt the refrain "How low can you go?" But another mantra is being whispered in Internet circles: "How local can you go?" Take heed, for this maxim could herald the renaissance of the medium believed most threatened by the Web: newspapers.
DotConnect Media is a network of more than 1,500 newspaper Web sites rolled up via acquisitons by Lee Enterprises.
DotConnect Media is a network of more than 1,500 newspaper Web sites rolled up via acquisitons by Lee Enterprises.

National ads
DotConnect Media is one of several companies attempting to transition newspapers to the Internet. It is a network of more than 1,500 newspaper Web sites rolled up from several acquisitions and purchased in March by Lee Enterprises, now the nation's fourth-largest owner of daily newspapers. Its goal is to create a national advertising medium out of inherently local products.

"Broadcast media always had the advantage, because they could communicate instantaneously to a national marketplace," said David Teitler, DotConnect's president and a newspaper-network fantasist since the mid-1990s, when he worked on the problem at the National Newspaper Network, the industry trade group. "Yet people trust newspapers. That's newspapers' killer app. Everyone from Procter to GM wants to get local, because that's where the sales take place."

Mr. Teitler's faith might seem suicidally counterintuitive. Conventional wisdom is that newspapers' financial base is eroding. Monster.com took employment classifieds. Craigslist is taking real-estate ads.

First news network
But history is on the side of newspapers, which in fact were the first network. As related by Princeton sociologist Paul Starr in his brilliant book, "The Creation of the Media," U.S. newspaper companies were networking among each other in the late 18th century, taking advantage of constitutional provisions that allowed them to mail papers to each other free. Thus they borrowed content to fill pages that were made available to advertisers eager to reach the burgeoning continental marketplace.

Come the 20th century, broadcasting trumped newsprint's content networks and fashioned actual, national ad networks. But with a new century emerges a new technology that (as noted previously in this space) reduces the native costs of both content creation and distribution to zero. All media companies now are asking where true competitive advantage lies. To DotConnect, there's a simple answer: local news, local guidance, local advertising -- and, oh, national ads, delivered more locally than anyone ever imagined, in a format that merges video, audio, text and conversation.

Newspapers weren't able to realize the full power of their brands because they were so different from each other: different sizes, different pricing regimens, different color capabilities, different demographics. "There was no real way," said Mr. Teitler, who also has worked at Newsweek, Conde Nast and the National Enquirer, "to bridge the location gap."

Among incumbent media, newspaper companies have been Internet leaders, developing state-of-the-art Web sites even in the dial-up days. With broadband, many are well-positioned to conquer local TV stations in the interactive arena.

Leap of faith required
But turning content into national advertising revenue still will take a leap of faith -- and a leap of process, which DotConnect believes it has at the ready. With a hosted network of hundreds of sites and an extranet that allows other newspapers to participate, the company says it can normalize ad buying across markets as divergent as New York and Knoxville.

"A single pipe, one order, one bill, one CPM, across the country, whether 211 DMA's or two DMA's," says Mr. Teitler. He doesn't appear to be fantasizing when he says it.

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Randall Rothenberg, an author and longtime journalist, is director of intellectual capital at consultancy Booz Allen Hamilton
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