Clay Shirky says that journalism is in a time of revolution. Yesterday, we fired the first shot.

In the manifesto we posted last week, we identified four strategies for funding journalism. These links point to demonstrations of new revenue models we developed for news companies:

• Display advertising solutions
• Classified solutions
• iPhone solutions
• Small-business solutions

* Coined by Matt Waite, creator of Politifact

Make it easy to use. In one respect, CraigsList is better than newspaper classifieds because it’s free. But more important, CraigsList is easier to use than any other newspaper classified site and that may be the bigger competitive advantage. Ironically, CraigsList isn’t particularly easy to use, but it’s easier than every other system. That’s why we made our solution easier still.

Make it easy on the eyes. Classifieds need not look like HTML 1.0. Our solution provides easy-to-use templates so any user can create a beautiful, professional-looking ad. See the description page, below.

Make it free. If newspapers are going to compete with CraigsList, and every other free classified site, they need to meet or exceed every feature of every other site. So basic listings must be free.

Make it make money: There are plenty of ways to monetize free classifieds:

• Sell context-sensitive, behaviorally targeted display ads adjacent to free listings, such as the display ads for Pohanka Honda, below.
• Sell ads on to the category-specific search pages, to get the attention of buyers even before they begin their search. See the category-specific search page, below.
• Provide “premium” listings above the free listings in search results, as Google does now.
• Serve up links to “premium” listings at the bottom of any page that provides the details of a free listing. You can see examples beneath the heading “Check out complete listings” on the description page, below.

The examples described above are primarily for commercial customers. Here are some of the upsells for private-party advertisers:

• More photos
• More keywords
• More prominent appearance and position in search results
• Choice of visual “theme” for your description page
• Block links from competing ads from appearing on your description page
• Allow ad to appear active longer

Make it safe: Craigslists shouts “Let the buyer beware!” — which doesn’t give anyone a warm, fuzzy feeling. While newspapers should leverage their reputation as the most trusted medium, even they cannot vouch for ads posted online via their self-service tools. So newspapers must provide a “reputation engine” where users can post their experiences with sellers, both good and bad, as eBay does now. Providing sellers with a means to manage their reputations online is another source of revenue.

Make it the biggest and best marketplace. How? By aggregating CraigsList and every other local classified site, to provide one-stop shopping for every buyer.

Read more on the design thinking behind the team’s approach to the user interface (SND Update)


Classified homepage, above


Category-specific search page for cars, above


Results page, above

Description page, above

Mobile remains new, so it offers opportunities to pursue revenue strategies that may not have worked on previous platforms. For instance:

On the internet, there is a cultural prohibition against paying for content – that’s why we don’t believe in micro-payments or subscriptions. Mobile users may not be willing to pay for content either, but they are buying iPhone apps that provide features to customize content on iPhones. So we propose to offer a suite of low-cost features to enhance the experience of content consumption — rather than charging for the content itself — beginning with this feature set:

Off-line reading: Download content that’s normally online-only for use when you don’t have web service. Allows you to take content on a plane or subway.

Geo-tagging: Tells you what is near me now to connect you with news and advertisers as you move through the world of weather, traffic, events and hyperlocal discounts and sales.

Archive/export: Save and share data and permalinks. It’s a way to link your mobile and desktop experience and to share data with your friends.

Customization: Do more than change the background color. Organize the news the way you want to read it by eliminating what isn’t relevant and emphasizing what’s important to you.

Text-to-speech: What better use for a mobile news device than to combine up-to-date news with audio player functions? Perfect for walking, running, subway, trains, etc…

If we’ve learned anything about online, it’s that if we don’t charge now, we can never charge in the future. While we don’t believe the iTunes model will work for content, we do believe it will work for features that enhance the experience of using the content.

Read more about enabling and facilitating impulse buys for news apps. (SND Update)

Depending on the level of SEO, 15 to 35 percent of users enter a news site at the homepage, then exit. This provides relatively few pixels on this single Web page to monetize an entire site. If homepages were redesigned to compel users to view more pages to meet their information needs, then sites would have more opportunities to generate revenue. To do so, homepages must be converted from digests to tables of contents.

Digests and tables of contents both provide a window into a site’s news content. But tables of contents do not discourage further exploration, while digests unnecessarily reduce reviewing of inside pages. For instance, a book’s table of contents doesn’t stop you from reading. Neither does the table of contents of a news magazine — some, like Esquire’s, encourage you to read more.

Story pages, rather than homepages, are the key to monetizing a news site. These inside pages have fewer elements than homepages, so they can provide a more effective environment for advertising by allowing for larger ads and fewer distracting elements.

Our solution was inspired by this New York Times prototype. However, the New York Times prototype is more a digest than a table of contents, because its well-crafted headlines and summaries may satisfy an enduser, and provide fewer reasons for further exploration of the site.

In contrast, our solution merely offers a “taste” of a site’s news content, using fewer words to entice endusers, rather than satisfying them with a summary. It also differs in these other, important respects:

Our solution is based on a multi-block grid, which provides the flexibility to increase the amount of space devoted to a headline to signal its importance and reflect editorial news judgment. It also allows photos to be cropped and scaled for maximum impact and legibility, rather than forcing them into pre-determined holes.

We’ve eliminated ineffective leaderboards and skyscrapers, and replaced them “Deals of the day” at the bottom of the page which are part of our solutions for small businesses. Unlike leaderboards and skyscrapers which often annoy and distract users while rarely provide meaningful information, these deals offer a true benefit to users. This is an example of “advertising as information.”

These advertising messages also differ from conventional ads because they don’t compete visually with each other, nor do they detract from the overall, pleasing appearance of the page.

Click here for larger view of homepage.

Step 2: The new story page. Changing the homepage to force more views of story pages is the first part of our two-part strategy to increase revenue from display advertising. The second part is changing the story page to provide a more effective environment for advertising messages. This will produce better results for advertisers and motivate advertisers to spend more on online advertising. Here’s our strategy:

• Dramatically increase the size of the ad to 480 pixels by 480 pixels.
• Reduce the amount of clutter to create a more attractive environment for the ad.
• Limit ads to one per screen to increase impact.

 
This solution looks more like the The New Yorker in print than any news site online, but we think that’s a good thing. It’s based on this prototype for the Daily Record.

While most online execs might blanch at the notion of one ad per page, the fact is that most sites can’t sell all the ad positions currently available, so why not run the paid ads bigger? As long as the table-of-contents-style homepage creates more pageviews, more advertising opportunities will be created to offset any losses.

But more important, if one big ad per screen delivers better results for advertisers, then advertisers will be willing to spend more with the sites willing to offer the more effective format.

And finally, what if that big ad provided more than a brand message, but an experience? What if that ad “came alive” onMouseOver, just like a photo in Harry Potter’s newspaper, The Daily Prophet?

To take full advantage of the Web, advertisers must build true interactive experiences within their ads, with the means to capture the attention, preferences and contact info of potential customers. These ads will no longer need to shout and annoy users, because their message is the only ad message on the screen. Instead, these ads will “rest quietly” next to the editorial content, and only “come alive” when users opt in for the advertising experience, thus providing a better reading experience as well.

Read more about the prototyping process and how the team worked through the issues. (SND Update)

• A handful of employees, if that many
• Probably only one location, and probably not exactly where we’d like it to be
• Little time to just think or plan strategically
• A total marketing and promotion budget less than $1,000 a month
• Disruptive pressure from “big-box” retailers
• A tendency to spend marketing dollars on the “squeakiest wheels,” meaning sales reps who come calling consistently and insistently — Yellow Pages, maybe radio, maybe the local paper (depending on market size)

Web banner ads probably don’t help small/medium businesses much, especially if the message is poorly crafted, includes no calls to action, or points generically to a “brochureware” Web site.

That annual Yellow Pages ad fills the name/address/phone/category need well enough. What Web advertising should do for small businesses is deliver the message they want to deliver to prospective customers right now, not what they put in the book once a year.

What’s the deal? What’s the special offer, incentive, promotion or value proposition that brings customers in the door this day, this week, this month?

The deal should be the next thing beyond the click for small/medium businesses, and that’s what we created — a way to aggregate, browse, search and promote the best deals from the businesses in a newspaper.com’s community.

A typical newspaper.com — pretty much all of them, honestly — places banner ads in a way that makes them blind spots for Google, Yahoo! and the other search spiders. We don’t treat the advertising messages — the deals — as content. We should. We should put them in databases that are at least as well optimized for search as news articles. Then we should promote the best of them as chosen by users (via printing/redemption of coupons), the most urgent of them by creating limited-time or limited-number coupon offers, and the latest offers placed by advertisers.

We built some wireframes (download the PDF here) that show how these indexes might look and work, how they would connect to advertiser brochure pages, and what we and advertisers could accomplish from them. One appears, below.

 
So much more to say, and we’ll lay out more details in the coming days, including:

• Evolving services for small/medium businesses to include reputation management – showing business owners what people say about them all over the Web, whether they have a site of their own or not.
• How this works underneath banner ad servers, targeting techniques, even ad networks — because the focus is on services for small businesses beyond the introductory message couched in a banner.
• How it scales up to larger businesses, and to different size newspaper companies.

Stay tuned, check out the PDF examples, and add to this discussion. We need your help to make this practical and profitable!

1. Build an effective advertising model for news content delivered on smart phones, such as Apple’s iPhone.
2. Create a better CraigsList.
3. Show newspaper-centric companies how they can better meet the advertising needs of small- and medium-sized businesses.
4. Re-imagine the homepage and display advertising.

We’re planning to issue reports from the teams on Monday with as many prototypes as we can accomplish in a one-day sprint.

The participants today are:

• Deborah Acosta, Miami-based free-lance journalist (University of Miami student)
• Chris Amico, PBS NewsHour Online
• Patrick Cooper, USA Today
• William Couch, USAToday.com
• Chris Courtney, Tribune Interactive
  
• Steve Dorsey, Detroit Free Press and SND Secretary/Treasurer
• Tyson Evans, New York Times Digital
• Alan Jacobson, Brass Tacks Design
• John Kondis, National Geographic Digital Media
• David Kordalski, Cleveland Plain Dealer
• Chris Krewson, The Philadelphia Inquirer
• Greg Linch, Miami-based multimedia reporter (University of Miami student)
• Wesley Lindamood, USAToday.com
• Vernon Loeb, The Philadelphia Inquirer
• Matt Mansfield,  SND President and Medill School of Journalism
• Logan Molen, Bakersfield Californian
• Kristen Novak, USAToday.com
• Carlos Roig, USAToday.com
• Eric Seidman, AARP magazine
• Jay Small, Scripps Interactive Newspapers Group and Small Initiatives, Inc.
• Ernie Smith, Express and ShortFormBlog
• Mary Specht, Gannett
• Kathleen Sullivan, Gannett
• Patrick Thornton, BeatBlogging.org
• Yuri Victor, Gannett
• Kris Viesselman, National Geographic
• Jon Wile, The Washington Post
• Chrys Wu, Washington Post Digital
• Kaitlin Yarnell, National Geographic

All participants are here at their own expense and their views don’t necessarily represent the views of their organizations.

Revenuetwopointzero also plans to combine search results and display ads.

Of late, newspapers have shifted a good bit, brought on by the difficult economic times we have been experiencing, to a role of curators of content rather than creators of content. In so many ways, newspaper editors select the best content available for their constituencies and present it in the very best ways. We do the search for our readers.

As we present content, we are still operating in a caste system of sorts. We tend to suggest that the best, most credible and trusted content comes from the newspaper’s own reporters, editors and writers. Then, we likely take the wires such as AP and value them next, followed by the syndicates and now the emerging UGC (user generated content). We blend that content to attempt to offer the best, most valuable sources for the best, most credible information. One source, we do not even consider in this mix is content from advertisers. AGC (Advertiser Generated Content) ranks a distant last in the mix of resources of information and when used, typically is required to wear the Scarlet Letter (Advertisement) all around it.

The worry has always been that information from an advertiser is tainted, biased and will somehow fool, even con, unsuspecting readers. I would argue otherwise:

1. Readers these days are pretty used to figuring out commercial messages especially since product placement and branded content are commonplace on all other media; and

2. Certain types of information might actually be preferred when it comes from a knowledgeable advertiser. Examples might include fashion information about emerging colors and styles coming from Bloomingdales might be seen as more expert than that coming from our own newsrooms, and home improvement tips might be more welcomed from Home Depot. The question is how do we present these sorts of information appropriately and what reactions do readers have to it?

NAA has commissioned prototypes to test with consumers. The complete report and prototypes will be available for download on April 7. Here are the results:

1. We learned that U.S. consumers do notice who wrote the stories they read at least some of the time (63% notice).

2.The originator of a story only makes a minor difference as to whether a consumer selects to read a story in a newspaper (40% said it makes a difference and 45% said it did not).

3. However, the originator of a story does make a difference as to the credibility/ trust and accuracy of the story (62% say it does).

4. Respondents overwhelmingly stated that they knew who was writing the stories on the prototype pages including the AGC stories (93%).

5. 85% of respondents agreed that there are times when stories written by advertisers are acceptable.

6. Respondents ranked stories coming from newspaper itself as more valuable than stories coming from newswires (second), syndicates (third), advertisers (fourth) and then other users (fifth), so it seems as if AGC (advertiser-generated content) is rated higher than UGC (user-generated content).

7. 58% of all respondents stated that stories written by advertisers are acceptable when the advertiser has specific expertise and when the advertiser is not making a “pitch” for their goods and services.

8. 79% of the consumers responding to this survey indicated that they could identify which stories on the protoype pages were written by advertisers.

9. 79% of those interviewed believed that the identification of AGC on the example pages were acceptable.

10. 84% of the respondents felt that this sort of identification was important. Remember that we differentiated by utilizing the bylines and the advertisers logo.

The test also included a question about and an example of product placement.

86% of respondents stated that product placement as shown did not bother them however, another 86% said it would not influence purchase decisions.

As with many creative, game-changing revenue ideas, they may not be for everyone. The bottom line is that unique new approaches to content and advertising are worth discussing and considering, especially today.

– Mort Goldstrom is the VP/Advertising for the Newspaper Association of America

As Shirky says, we’re in a revolution, so everything must be put on the table, including the long-held belief in the separation of church and state (editorial and advertising).

Historically, it’s been an important distinction for journalists, but less so for endusers, as common sense and NAA’s research indicate. To find new ways to fund journalism we need to reconsider every strongly felt belief, especially any so dogmatic.

David Kordalski of The Cleveland Plain Dealer said it best: “It took (anti-communist) Nixon to go to (Communist) China.”

Likewise, it will take journalists to find the new separation of editorial and advertising that is appropriate to the digital age.

Below you’ll see a page from washingtonpost.com with a report on the new portable printer from Polaroid. Note that the ad notched into the story is a generic ad severed up by Google. The skyscraper ad to the right is for Cisco. Neither ad is related to Polaroid. Ironically, the news story about the new Polaroid product does not show the product - which is an important piece of news content that is missing from the news story. The story emphasizes the small size of the new product, but it is nowhere to seen.

In the next example, you see what this page could have looked like, including a paid ad for Polaroid that promotes the product but also informs the public.

Is this paid ad journalism? No. Does it inform the public? Yes. This begs the question, “What is journalism?”