I think I was too hard on the new report by Borrell & Associates, based on initial coverage in Editor & Publisher. I should have known better.
Steve Outing does a great job of laying out the recommended strategy in a much longer piece in E&P. It really makes a lot of sense. Highlights of Steve’s piece:

  • Serve the needs of new advertisers who don’t advertise in the paper today because it doesn’t meet their needs or they can’t afford it.Three quarters of local companies don’t advertise with the local daily. Take advantage of the younger demographics of your online site to serve new advertisers.
  • Change the way you match ads to readers. Gather enough information about each reader to deliver the right ads. Don’t depend simply on where the ad appears — know who is looking at the page. Delivering the right ad to the right reader requires database and analysis skills.
  • Don’t simply move high-margin print classifieds to lower-margin online classifieds. Offer your advertisers new services. Invent new products to serve the needs of HR managers and real estate agents.
  • Focus more on making online a success and less on preserving print. Move responsibility for online from the local publisher to the corporate president. Over time, online is going to erode the print business. But the publisher will resist this low-margin trend as long as humanly possible, starving the online operation for resources and leaving the market open to new entrants. This is the the classic Innovator’s Dilemma scenario.

I strongly recommend reading Steve’s complete article.