U.S. Internet users spent more time on Facebook than Yahoo and Google combined this past year (Nielsen, 2011). Following users, companies are also on track to spend 13.7 percent of their marketing budget on social media advertising (Borrell Inc. , 2012). Traditionally, small businesses advertised in local papers to drum up sales for their businesses. In the current scenario, Facebook and Twitter accounts threaten to usurp the place that newspapers had in selling the business to its readers.
Many would argue that getting rid of the middle man is the way of the future, but a newspaper has more brand recognition and still gets more eyeballs. The problem facing them right now is how to convert the readership into an effective revenue stream.
Most newspapers already have Twitter accounts and Facebook pages, and have had them for some time now. These accounts have quite a few followers and fans. The main concern is accurate calculation of the return on investment (RoI) in social media so that they can convince their advertisers to come back. One method to measure RoI is through tracking the click-through from the respective social media accounts and pages. Another method is to use social media to sell advertising space. Some newspapers are already exploring this avenue to generate more revenue.
One such newspaper is the Austin Statesman. Advertisers looking to tap into the Twitter follower base of the Statesman can do so. Mingled within the tweets of their twitter account, which include tweets on the local happenings in Austin, TX, and replies to their followers are advertisements from local businesses. The tweeted ads are distinguished by the hashtag ‘ad’, and it doesn’t look as if the newspaper has lost many followers over its decision to incorporate advertisements into its Twitter account. This probably has to do with the fact that each advertiser only gets two tweets in a day, one in the morning, and one in the afternoon, and that the paper has strict guidelines on what gets tweeted and how.
Another newspaper experimenting with generating ad sales in social media is the Wall Street Journal. In Sept 2011, they released their WSJ Social app on Facebook. Since the advertisements appear in the app itself, and not on the Wall, it doesn’t violate Facebook’s policy. WSJ uses space within the app to advertise, and Facebook uses the right-hand side column to showcase its sponsored posts. Furthermore, readers are able to read articles written by the favored editors without navigating away from Facebook to the WSJ’s website.
For every newspaper trying to monetize its social media presence there are hundreds who are not. Social media outsourcing doubled from 14 percent in 2010 to 28 percent in 2011. Of all the tasks that marketers outsourced, design/development, analytics and content creation comprised the top three (Social Media Examiner, 2011). If a newspaper is already outsourcing its digital content production, it could leverage its service provider’s capabilities to create a Facebook app and sell advertising space there. Tweeting ad images is a viable alternative for advertising through Twitter accounts. To such effect, service providers, who serve newspaper publications, need to anticipate their client’s needs, and ramp-up their skill set to provide such services.
I believe that social media can be effectively used as a source of revenue for newspapers, as long as they don’t turn their accounts into one giant billboard space.
- Deepti Krishnan, Analyst, Sourcing Practice