CLEARER VISIONS COME INTO THE LIGHT

Heavy fog that enveloped much of the Eastern Seaboard socked in one of Connections' keynote speakers. After years of uncertainty, however, some online newspapers appear to be not only in the clear, but even out of the red.

"The days of evangelizing are over," Randy Bennett, NAA vice president of electronic media, told the record 700-plus attendees. "The Internet is an integral component of our business." Underscoring that point, a substantial number of attendees applauded when asked if their sites were profitable, and more than at any past conference, panelists shared concrete success stories, not suggestions or suppositions.

But speakers also cautioned that those successes come largely when newspapers leave their comfort zones and embrace such unfamiliar areas as community and online commerce.

"People go to the Web for services," said New Jersey Online and New Media Foundation President Peter Levitan. "They want to buy a used car, search for movie listings, learn how to clean their dog's teeth. If newspapers are to survive on the Web, we have to learn to use applications"--applications like community-building tools and e-commerce products.

BUILD AND THEY WILL COME

SELLING SUCCESS At Connections'98, NAA announced three initiatives to bolster newspapers' online presences. NewspaperLinks.com. With online "portals" like Yahoo! the buzzword du jour, the Association created a standalone gateway of newspaper hotlinks (newspaperlinks.com) intended to drive traffic to local sites. The site also offers direct links to newspaper-classified services and other prominent features. NAA will promote the site, already promoted by USA Today Online, in other industry campaigns. Public-awareness initiative. To help spread awareness of newspapers' online presence, NAA has retained Fleishmann-Hillard International Communications, is readying a classified-branding campaign, will sponsor several sessions at fall's influential Internet World conference, and plans to serve as a clearinghouse for newspaper-success stories. The goal? To "position newspapers at the forefront of the Internet industry and...as the primary resource that connects the Internet to local communities," said New Jersey Online and NAA New Media Federation President Peter Levitan. Online-newspaper database. Taking the concept of community publishing to an industrywide level, NAA has partnered with software developer InType to build a database of online-newspaper services at naa.intype.com. The database, to be maintained by newspaper-site managers, is intended to help media buyers tap into local markets. For information or to request a password, contact Melinda Gipson, NAA director of new-media business development.

Like their non-virtual counterparts, online communities grow organically. New Jersey Online built a community site around youth soccer; Guy Gannett Communications takes the approach one giant step forward with aggressive plans to allow virtually every government, school and community group in Maine to self-publish. Such ventures become exercises in outreach rather than technological evangelizing. "It's more about aggregating people than aggregating content," explained J. Willard Colston, new-media-strategies vice president. He anticipates $100,000 in revenue from the Maine service in its first year.

"Our brands are important to [advertisers] as a relationship, not a watermark. They want to integrate their brands in meaningful ways, not the stripped-down approaches our competitors are successful with." --Kurt Fliegel, Chicago Tribune

The good news: People may actually be willing to pay for information contributed by broader communities--particularly if that information saves them money, insisted Tom Gardner, co-founder of the Motley Fool, a 20-subscriber print newsletter that became the Internet's best-known personal-finance site. "It creates a second subscription model for newspapers that doesn't undermine the primary model," he said. In addition, a groundswell of online participation makes businesses "feel obligated to participate, to advertise and to respond."

PROTECTING...PRINT?

Observers have long questioned when Internet services might actually begin undermining print-side priorities. And while that topic's still open to debate, many newspapers are taking pains to avoid undermining the print franchise, particularly in the lucrative classifieds arena.

In Lexington, Ky., staffers developing an automotive product to link dealers' used-car inventories to the Internet "reversed our thinking" and used the online databases to build a weekly full-page ad featuring every car at participating dealers, increasing print classified revenue by $80,000.

"We're strengthening the core product," said Tom Caywood of Knight Ridder New Media. "Instead of [undermining] the primary media buy, we're going after the second or third [buy]. That's where the money is."

"We've all had the benefit of several good years. There's a complacency because of the fact that things aren't all bad....We need to create a sense of urgency." --Betsy Brenner, The News Tribune, Tacoma, Wash.

Speakers also stressed resisting conventional Internet advertising wisdom. By building features like its "Beat Siskel" contest and interactive pages featuring Java applets showing how much faster content would load using a 56k modem, the Chicago Tribune managed to "escape the Internet metric of...click-through rate," said Kurt Fliegel, strategic-technologies-group manager. "Banner and button advertising is a cheap way out. The more we buy into the current models, the more we're playing right into the hands of the portal sites."

Speaking of portals, the related city-guide field continues growing: The Washington Post has attracted 1,300 mostly non-newspaper customers to its $99 monthly Yellow-Page site; The Boston Globe, 800. Both face stiff competition. Candy Thompson, the Post's online-directory sales director, said prospects get up to four Internet-sales calls a day. "As we were leaving a business, the competition was going in."

Since many of these smallish, service-oriented clients remain unfamiliar with both newspaper and online advertising, a new sales mind-set is crucial. "You're not selling advertising....What you're offering people is the opportunity to market on the Internet," Levitan said. "They're getting, at very low cost, a Web site."

Print promotion drives online sales; a full-page ad listing early participants in the Post's service led to advertisers "demanding to buy advertising," Thompson said. "Provide a strong value proposition to advertisers, and price accordingly--don't come down to the commodity level. We know we're double the cost of our competitors, but we're outselling them six times over."

And again, such sites also leverage print: A boston.com directory-sales rep not only won online business from a bagel-shop chain, but also opened the door for in-store distribution of the print Globe. In fact, some publishers now think the Web may stoke interest in reading in general, and the print product in particular. While teen-agers prefer computers to reading or television, claimed Jaron Lanier, lead scientist of the National Tele-Immersion Initiative, their addiction to e-mail and Web surfing bodes well.

"Teens are more literate and widely read than their parents. It's a new culture of the written word," said the pundit with chest-length dreadlocks, who jokingly called himself a "prototype of your future reader."

"Video brought films back," added Warwick Brindle, Thomson Newspapers' senior vice president of marketing. "I believe the Web can work for print."

BRANDING, BUILDING, BRANCHING

"AOL was cocky from the get-go but...[now] has 14 million subscribers and market value greater than any company in our industry." --Scott C. Smith, Chicago Tribune

While competitors still jockey for a slice of local markets' $76.8 billion advertising pie, there seemed to be far less handwringing about the likes of Microsoft at this year's conference. Brindle cited "a lot of [online] failures in a very short time...because people thought they could come in and take our markets."

That doesn't mean publishers' work is done. Far from it.

"We need to evolve to see ourselves as multiproduct, multimarket-segment companies," said Scott C. Smith, president and publisher of the Chicago Tribune. "We haven't evolved to the point where we can go to other consumer products." Some newspapers, however, do evolve: Staffers from The Orlando Sentinel discussed how the company integrates print, online and cable-news operations (see TechNews, July/Aug. 1998, p. 15).

Still, publishers shouldn't assume their powerful brands assure them a place in new media, cautioned Christie Hefner, chief executive officer of Playboy Enterprises Inc. One of the first magazines to venture into cable in the 1980s and the Web in the '90s, Playboy's success came from reassessing the value of its brand in each medium "before doing nearly anything else."

Playboy's Web ventures immediately drew younger, better educated and more affluent readers. Sound familiar?

Some newspapers, however, opt for broader branding. With its charlotte.com site, The Charlotte Observer execs "positioned the [site] as a gateway, a portal," said Aili Jokela, vice president of Fleishman-Hillard International Communications. "It's bigger than the newspaper, with an image and promise all its own."

GETTING THERE

Of course, newspaper Web sites remain works in progress, and half the battle remains winning the hearts and minds of those in the newspaper plant.

"The dairy industry spends more on research and development than newspapers." --Robert S. Cauthorn, The Arizona Daily Star and winner of the NAA New Media Federation's Digital Pioneer award

"We're like little fish things crawling out of the water, and we're just trying to grow lungs and survive," said Elizabeth Osder, The New York Times Electronic Media Co. content editor.Among the bridge-building approaches suggested:

• On the editorial side, new-media execs look for receptive audiences; in Philadelphia the staff writer who developed the print/online/television package "Blackhawk Down" fielded more than 300 e-mails from online users. "There are heroes in every newsroom," said Fred Mann, Philadelphia Online's general manager. "You have to play to [receptive staffers] first."

• Since print sales reps may be unimpressed by a 10 or 15 percent cut of a $100 online ad, some papers explore new compensation strategies. The Orange County (Calif.) Register, for instance, gives print sales reps the entire first-month's revenue for closing a one-year online contract.

• As far as winning customers goes, print's mass-market audience may well disappear online. Advertisers already seek targeted one-on-one relationships with customers, and Jerry Michalski, president of consulting firm Sociate, warned that programming for broad consumer audiences makes users feel "all I am is a wallet with a gullet and eyeballs."

  Online devotees "moved to the Internet to satisfy personal information needs they couldn't find in traditional media," agreed Vin Crosbie, president of the Digital Deliverance consulting firm. "Personalization is one of the reasons we have an Internet market."

While personalization tools slowly emerge, panelists urged newspapers to experiment--and to remain cautious. News.com's personal-news page never became popular because "people were afraid of missing information," said Barry Barr, the service's co-creator. "I took that as heartening because they felt the role of editors online was still important."

CHASING COMMERCE

While some publishers now make money online, they're finding that profit alone may not be enough. Thomson's mostly classified-centric newspaper sites make money, for example, but "what we're not making is the margin we're used to," Brindle said.

"The economic model isn't there," Smith acknowledged. Yet "if you wait, it will be too late to be a leading player."

One emerging, billion-dollar model is e-commerce, and online publishers are jumping to provide electronic storefronts and similar tools. The Virginian-Pilot in Norfolk, for instance, targets "small local companies that want to be in the business without figuring out the technology," said Michael Alston, general manager of Pilot Online.

Beanie Babies and other collectibles drive The Hartford Courant's foray into online auctions, in reality a return to the under-$25 classified category. Again, more than 80 percent of online dealers had never placed print ads.

Yet the market remains far from mature. The Toronto Star suspended its 30-retailer cybermall because "we couldn't get [merchants'] heads around creating a compelling value," said Rocco Rossi, vice president of strategic planning and new media. Execs plan to try again once their online directory jumps from 1,600 paying advertisers to a critical mass of several thousand.

Publishers seeking baby steps into the e-commerce world should try selling classifieds or subscriptions online, even if only via an e-mail link, suggested Charlene H. Li, interactive-media publisher of Community Newspaper Co. of Needham, Mass..

While solutions and strategies constantly evolve and emerge, "this is not a zero-sum game," said Jay R. Smith, president of Cox Newspapers Inc. But the opportunity still remains "to be [present] at the birth of something and be a winner."