Shortly after ranting that media properties to start thinking bigger and stranger if they’re going to succeed, I came across Jeff Jarvis’s spot-on analysis of why print advertising was never the right model for online success and the variety of opportunities that exist for media properties to improve their top and bottom lines.
Jeff says that print advertising worked as a business because there was a limited supply of space. But it also worked as a business because it was staggeringly inefficient. A Realtor had to buy access to a million readers to reach to two dozen who were looking for a neighborhood open house. That model has been broken for at least five years.
He has some great suggestions for new kinds of businesses for media companies. You should read his whole list, but here are my takes on some of them:
- Empowering new advertisers and partners: Google and eBay have empowered genuinely new businesses. Look beyond your traditional customers for new business opportunities. One reason that Google and eBay have succeeded at this is that they’ve made it possible for their customers to serve themselves, and consquently they’ve driven the price lower by orders of magnitude.
- Offering new services to marketers: The Houston Chronicle is doing this today. Their goal is to be the digital agency for their community.
- Creating content and advertising networks to reduce costs and increase revenues: I’ve been writing about this for more than a year and I don’t believe we’ve scratched surface of the opportunities and threats created by networked media.
- Getting into new lines of business: Should local media get into the real estate business? Now is exactly the right time to get into a business that has been dominated by a cartel. Even if newspapers survive the coming storm, do they really think that their real estate advertisers will return? Really?
The bad news is that nearly all initiatives will fail and only a few will prosper. And you can’t wait around until it becomes obvious what’s going to work. Once you notice someone having success, he’s going to be difficult to unseat in the market he created. To succeed in the current chaosm, you must experiment, keep costs low, watch what others are doing, and take a portfolio approach to innovation management.