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Pulse of Publishing: How to Save the News? Google.

This week in “Pulse of Publishing” we take a look at the way a media Goliath (Google) and a media David (the Jewish Journal of Greater Los Angeles) are thinking about new business models for news. What did we learn? From giant aggregator to the niche publications, it’s all about effective content creation, distribution and monetization.

Google Helps Publishers: We say, “Beware of Greeks bearing gifts.”

You know you’re on to something when Google starts doing something similar. (See: Facebook, followed by Google Buzz.)

In “How to Save the News” on theAtlantic.com, James Fallows explores Google’s latest efforts to get involved in the “future of journalism.”

Google is, apparently, a very self-aware media giant.

“Now, having helped break the news business, the company wants to fix it – for commercial as well as civic reasons: If news organizations stop producing great journalism, says one Google executive, the search engine will no longer have interesting content to link to.”

Essentially, Google knows that in order to survive, it needs newspapers to keep generating articles and stories that people will actually search for. It’s sort of like the spice trade between Europe and Asia, but here Google is the middleman, Europe the search users and Asia the newspapers. Without Asia’s spices (newspaper content), the Middle Eastern traders (Google) had nothing.

Of course, the whole reason for Europe’s era of exploration was the desire to find a route to Asia via water, thus cutting out the middleman. Today’s publishers should be seeking to do the same thing.

One issue newspapers have struggled with is something that Google excels at: Keeping users engaged. As an aggregator, Google makes it possible for users to gather all the information they might want or need without ever really leaving Google.com. As Fallows writes, “On the topic of engaging modern users, Google feels very confident right now, and the news business feels very nervous. Apart from anything else, that certainty gap makes Google important to the future of the news.”

The question, of course, is whether Google will help publishers figure out how to keep users engaged on the news site. It seems unlikely. This is a conflict of interest for a search engine, especially since Google’s main priority has been as an aggregator, or what Fallows calls an “unbundling agent”:

“It lets users find the one article they are looking for, rather than making them buy the entire paper that paid the reporter. It lets advertisers reach the one customer who is searching for their product, rather than making them advertise to an entire class of readers.”

So why can’t newspapers do this, too? Why shouldn’t they be the ones to “reach the customer who is searching” for a product? (See spice trade analogy above.)

This capability, we at Perfect Market believe, is an essential part of the new online business model. It’s wonderful, of course, that Google is trying to help publishers find viable business models, but it’s also clear that publishers need to be the arbiters of their own destiny. Allowing Google to spoon-feed them a plan is a lot like letting the person who just tried to kill you nurse you back to health.

What does Google see as the best practices for newspapers online? Fallows writes: “The three pillars of the new online business model, as I heard them invariably described, are distribution, engagement and monetization. That is: Getting news to more people, and more people to news-oriented sites; making the presentation of news more interesting, varied and involving; and converting these larger and more strongly committed audiences into revenue, through both subscription fees and ads.”

What’s missing here, however, is the distinction between different kinds of “people” online. While Google recognizes that along with turning “more strongly committed audiences” into revenue, it has not emphasized the idea of turning search user traffic into revenue.

Fallows also illustrates the biggest issue online publishers face: low Google rankings. This makes it hard to generate search traffic and, subsequently, revenue.

“The modest daily updating of the news – another vote in Congress, another debate among political candidates – matches the cycle of papers and broadcasts very well, but matches the Internet very poorly, in terms of both speed and popularity rankings. The Financial Times might have given readers better sustained coverage of European economic troubles than any other paper. But precisely because it has done so many incremental stories, no one of them might rise to the top of a Google web search, compared with an occasional overview story somewhere else. By the standards that currently generate online revenue, better journalism gets a worse result,” he writes.

It’s clear that getting high-value content that is intelligently, contextually linked to the top of these search engines is an essential step in generating more revenue. This step is, however, something many take for granted:

Fallows quotes Neal Mohan, Google’s VP of product management: “We think publishers should always monetize for the highest value.”

“He could tell that my reaction was ‘Duh!’ so he went on to say, ‘Day by day, across billions of ad impressions, this makes a tremendous difference. … This [online-display] market has the opportunity to be much larger. … If you just do the math – audience coming online, the time they spend – it could be an order of magnitude larger.’ In case you missed that, he means tenfold growth.”

So the equation seems to be, figure out what’s high value and drive traffic to that content? Hmmm … where have I heard that idea before?

The best part of Fallows’ article, besides the statements affirming Perfect Market’s approach (For example: “The best monetizing schemes are of course ones that people like – ads they enjoy seeing, products for which they willingly pay. Online display ads should be better on these counts, too.”), was his optimistic take on the opportunities that are out there for publishers online.

“The solution is simply the idea that there can be a solution. The organization that dominates the online advertising world says that much more online ad money can be flowing to news organizations.”

What’s also exciting is that, as much as Google is trying to be one solution for publishers, Fallows predicts the savior of publishing will come not in one monolithic solution but in a number of smaller, incremental adjustments

“The fluid history of the news business, along with today’s technological pattern of Google-style continuous experimentation, suggests that there will be no one big solution but a range of partial remedies.”

How Jews Do News (Online)

Now that we’ve covered the serious stuff, I thought I’d share a more light-hearted, if no less relevant, take on a new business model for news.

In the Los Angeles Times, columnist James Rainey reported on a novel approach taken by the Jewish Journal of Greater Los Angeles in rethinking the role of a publication online.

The key to its success: Thinking outside the online box and expanding its offerings, an example other publishers (both big and small) would do well to imitate.

“By banking hard on two of the most robust growth trends in 21st-century media – niche journalism and philanthropy – the Jewish Journal appears to have extended its life expectancy and expanded its coverage of Jewish life in Southern California,” Rainey writes.

An $800,000 donation saved the Journal from outright doom, but instead of sticking to the status quo, the Journal used the influx of money to re-examine its offerings, including not only bolder and more daring content (such as “more lifestyle stories – Sample blog item: ‘Why is Hollywood hot for circumcision?’ – and competing political voices”) but even better: a social networking/dating site, everyjew.com.

Talk about understanding user intent!

Publishers would do well to follow the Journal’s example. Now seen as a “media group,” the Journal is not only surviving but transcending its images as an “ethnic buy” to become “a niche buy with an affluent audience.”

Still, the Journal still has the issue of figuring out what do with its 350,000 unique visitors a month.

Rainey writes: “Like many other news outlets, the Journal’s managers want to find ways to make money off those online users. If they can solve that one, they’ll truly have found a model for the new niche journalism.”

In light of the Journal’s innovation, we cannot help but wonder if the “Chosen People” might just be the salvation of publishing?

— Lee Glandorf

Follow Lee on Twitter @LeeGlandorf

Tags: google, lee glandorf, niche journalism, perfect market, james rainey, chosen people, jewish journal, everyjew.com, neal mohan, google buzz, james fallows,