Thank you to the readers of the Arkansas Times who voted in the annual “Best of Arkansas” readers poll.  This blog was recognized as a runner up for Best Local Blog behind the Times own “Arkansas Blog,” which took home the winning prize.

Thanks for voting and thanks for reading.

Below I have a lengthy post on the future of the newspaper business and how, in light of difficult times all over the country, they can re-calibrate their efforts to compete for the billions of dollars in online advertising.

Marc Weingarten of The New Republic has a profile of legendary magazine editor Clay Felker and notes, “Clay Felker’s most significant contribution was inventing the concept of service journalism, the magazine as proto-search engine.”

He continues, “Felker was the first editor to think about New York like a sports fan (his father, it should be noted, was managing editor of the Sporting News, and Felker himself covered sports as a young reporter). And like any self-respecting fan, Felker had an urge to gather up all of the crucial data and taxonomize it, order it properly, and then sell it as the absolute final word.”

Felker was working in the 60’s and 70’s long before the Internet. But one can sense from this piece that he was anticipating the needs that readers have today. But unlike then, they flock to Google, as I noted below, in an effort to get the kind of information they want.

As I suggest, if newspapers want to compete for the billions in advertising dollars they’ll learn from Google and from Mr. Felker.

UPDATE: Tom Wolfe remembers Felker in this week’s issue of New York magazine.

Lance Turner links to a blog post from Steve Rubel of Edelman who opines that rising gas prices will substantially harm newspapers. Rubel observes, “For starters, as gas prices go up, so will the distribution costs. . . there’s a greater awareness among consumers of their environmental impact . . . Last but not least we have the growing popularity of speedy 3G-enabled smart phones, including the new iPhone 3G. The devices are declining in price while offering a lot more sophisticated experience for reading news.”

Turner responds: “Of course, I disagree that the future isn’t bright. The Internet affords newsgatherers great storytelling, interactive and marketing opportunities. The trick will be whether print publishers can make the digital transition by adopting an entirely new business model that moves the newsgathering business from paper to online. That, of course, is the obvious question. The solution remains elusive.”

I can understand Rubel’s argument about rising fuel prices having an impact on distribution costs. That said, according to Crain’s New York Business, “ad page counts in the Times for key categories like real estate, Help Wanted and national auto plunged by double digits.” Another view is that rising fuel prices are forcing automobile advertisers to spend less money. This industry has always been good to print publications.

But rising gas prices aren’t the only problem. The digital transition is proving to be a challenge to newspapers. Why? First, a lot of news content is already free. Thanks to yahoo.com or msn.com, the everyday reader can access the Associated Press content for nothing, although the AP has created quite a dilemma for itself by demanding that exceprts of AP stories not be used on blogs. For content that isn’t free, people have proven time and again that they won’t pay for it. Second, advertising rates don’t equate in the digital space - at least not yet. The “value” of online banner space is less than the “value” of a full-page ad.

A college friend and I thought we had a good idea to solve what we saw to be a looming problem. We were barely nineteen and we conceived a system that addressed lagging internet advertising and poor click-through rates for banner ads. It worked something like this: advertisers would partner with web sites to offer 10-second commercials that would be targeted to give the viewer, based on his or her web habits, a commercial. The viewer would be prohibited from opting out of the commercial thereby ensuring that the advertiser had a dedicated viewer. We thought this would drive the value for the space up.

That was eleven years ago, and I think it’s safe to say it probably wouldn’t work unless everyone bought in. Otherwise, you’d see a backlash against the first few sites that tried it. Salon has the closest thing to this system, but you can still opt out of the advertisement.

Solutions, as Mr. Turner notes, remain elusive. Even as popular news sites like the New York Times enhance their web content, turning a profit isn’t easy. Video has proven to be a draw, but you can’t force viewers to pay for it. In fact, Google still can’t find a way to make money on You Tube, although they’re exploring ways to lay in advertising that won’t frustrate the viewer. Blogs written by respected journalists (e.g. Andrew Sullivan of The Atlantic, James Wolcott of Vanity Fair and Hendrik Hertzberg of The New Yorker) also bring additional traffic to a web site.

I’ve argued before that the publications with a niche and that serve a specific audience need (it might be based on a genre of news or geography) have a better chance of making substantial gains in online advertising.

Their main competition isn’t advertisers; it’s Google. Google makes roughly $20 billion a year on paid search alone. They do so by making user requested information instantly available. Ask yourself this: if you don’t know where to find something online where’s the first place you’re likely to go? My guess: Google.

Which is why newspapers have to cater to the user in the online world. If they can become trusted sources for instant news, they stand a better shot to keep people off of Google. And the end result will be a more economically valuable website which, in turn, will be more attractive to online advertisers.

But they key is instant. If an event happens, a publication needs to be ready to pounce in order to capture that direct traffic. That’s why blogs are such an advantage despite the frustration they provide to the traditional newspaper model.

So how can newspapers adapt? By making their websites come alive. The content shouldn’t mimic what’s in the print publication. Simply because a story was a lead at midnight the night before doesn’t mean that by noon the next day it’s still a story people care about. Online editors and web developers have to be consistently pushing new content every hour of every day.

But that’s only half the battle. The websites have to be easy to navigate and easy to search. If a user can’t find something they’re going to abandon the site and head straight back to where? That’s right: Google.

Google’s figured out a way to make billions of dollars in online advertising. Industry experts believe that $42 billion will be spent in online advertising in 2011. That’s up from $21.4 billion spent in 2007. Additionally, “the 100 top advertisers spent nearly $230 million less on the traditional four media in 2006 compared with 2005, while boosting internet ad spending by $558 million,” according to Marketing Charts. So there’s real money to be made.

“Four years ago, the Internet was a Wild West that caused the occasional headache for the campaigns but for the most part remained segregated from them. This year, the development of cheap new editing programs and fast video distribution through sites like YouTube has broken down the barriers, empowering a new generation of largely unregulated political warriors who can affect the campaign dialogue faster and with more impact than the traditional opposition research shops,” writes Jim Rutenberg in today New York Times.

The article profiles film director Robert Greenwald who has been making videos about John McCain, mostly about his contradictions, and putting them on You Tube.  They’ve been viewed more than 5 million times.

“. . . cash expenses to make and distribute the segment were about $50, a fraction of the roughly $100,000 that it would cost to broadcast a 30-second spot on a television news program with an audience of a few million, like “Meet the Press.” “That’s dirt cheap for an ad,” said conservative video producer Jason Mitchell.

Today’s THV, the local CBS affiliate, is making some changes to its approach to news reporting; changes that could prove to be an exciting development here in Arkansas.

Current sports anchor and dynamic personality Craig O’Neill is taking a leave of absence from the sports desk to spearhead the television stations efforts to encourage conversations with viewers on the station’s website, Today’sTHV.com.

According to Arkansas Business, “Viewers will be encouraged to participate in forums, create blogs, post photos and contribute to the community calendar. O’Neill will incorporate contributions from viewers and other news items from the online community into his reports.”

I often discuss the evolution of media in this space, and there’s a lot left to be seen as to how Today’s THV will approach it. But Gannett, the parent company, is very committed to this idea of community journalism, which tells me they’re going to do all they can to make it successful. As Today’s THV News Director Chuck Maulden said, “We are just hoping Craig - as one of our best-known personalities - he can take this and build on it.”

The station already has one important advantage: its website is the most heavily trafficked among media concerns in Little Rock according to a recent Media Audit report. They not only outpace the other news stations, but Arkansas’s only statewide daily, the Arkansas Democrat Gazette, which has a curious view of the power of the web in telling the news.

A loyal Think Tank reader brought to my attention the parallel between what Today’s THV is attempting to do and the existing Current TV, Al Gore’s 24-hour viewer generated channel. As the reader notes, “asking people to submit vlogs [video blogs for those of you not with the web slang] is nothing new, but to do it on a local level with a station is new, particularly for Arkansas.”

It’s not a secret that the Internet, in addition to the 24-hour news cycle, has created a news-hungry population. And while their craving news, they also want information presented in unfiltered, less sleek ways. That’s why blogs (now estimated at over 74 million) and social networks, which many news entities are using to share information about their own publications, are on the rise.

I applaud Today’s THV for stepping out there in this way. It’s where media’s heading and, assuming it’s done right, better to be leading the pack than bringing up the rear. I’ll be following with great interest.

UPDATE: The Arkansas Times has had community blogs for a while now.  I write one of them: “The Moviegoer.”

ABC News is launching a new initiative to tap college students as newsgatherers.  “ABC News on Campus” is a joint venture with five of the top journalism schools in the United States: The Walter Cronkite School of Journalism at Arizona State University; the S.I. Newhouse School of Public Communications at Syracuse University; the University of Florida College of Journalism and Communications; the University of North Carolina at Chapel Hill College of Journalism and Mass Communications; and the University of Texas at Austin School of Journalism.

Students, selected and vetted by professors and ABC News, will have the chance to produce content for all the ABC News platforms and work with mentors from the network.  In each bureau, one student will be hired as “bureau chief”—and unlike many news internships, participating students will be paid.

That’s the headline of a story in this week’s issue of Ad Age.  For newspapers, the outlook seems to get bleaker by the month.  According to the Newspaper Association of America, average daily circulation for newspapers will be less than 50 million.  If that happens, overall newspaper circulation would be at the lowest level since 1946.  As Alan Mutter notes on his blog,

Though circulation has fallen back to pre-Baby Boom levels, the population has more than doubled since 1946. If you divide circulation by population, you will find that fewer than 18 out of 100 Americans today buy a daily or Sunday newspaper. Back in 1946, 36% of the population bought a daily paper and 31% took a Sunday edition

Henry Blodget, writing at the Huffington Post, forecasts where he thinks the $42 billion in advertising revenue will go (keep your spirits up, agencies, you’re not going to lose business - that is, unless you refuse to embrace the digital movement).  He predicts that over time it will all find its way into the digital arena.  But only a fraction of that revenue will stay with traditional newspaper websites.  Writes Blodget,

Newspaper web sites are only capturing a fraction of the print revenue the papers are losing, and the growth of newspaper sites has already started to slow. As the chart below shows, in 2007, the industry lost 8%, or $4 billion of advertising including newspaper web sites. Newspaper sites will capture a small portion of that new $30 billion Digital pie, but probably not much more than $5 billion. Some newspaper companies will survive, but only after major restructuring.

By 2017, Blodget predicts that $30 billion in ad revenue will flow through digital channels.  He argues that digital hot spots like Google, Yahoo, Craig’s List, eBay, Amazon and popular job sites, blogs, video outlets and mobile ads will capture 83% of that revenue, or $25 billion.  Newspaper sites will be left with the remaining $5 billion.

My top 3.

Slate.com has launched a spin-off online magazine called “The Root.”  Henry Louis Gates, Jr. is the editor.

We not only court online influencers with our services, we inhabit the blogosphere ourselves offering opinion, insight and commentary on an array of issues. I’ve given you a link to Chris Kindrick’s blog “Monkey Bulb.” Emily Reeves is now in the blogosphere with “Ms. Adverthinker.” And our man Clint Ecker, who keeps us all in line and online from Chicago, is commenting about everything tech and cool over at “Officially Lucky.” I’m hearing rumors SW public communications guy Kyle Riley’s “Ain’t Misbehavin’” blog is coming this week.

You can find continuous links to these blogs and many others over on the right hand side of the site under “My Community.”

At $2.7 million per spot, this would be an unconventional strategy. But two candidates are pondering it according to The Washington Post. Mitt Romney would seem to be an obvious candidate for such a buy. He’s loaned his campaign $17 million already, and there could be more to come. Barack Obama, according to the Post story, made a national cable buy last week.

With New York and Massachusettes both voting on February 5th, along with California and a slew of other states, a good creative or emotional ad might shake things up a bit. It’s certainly unique, but will it resonate in a way that a more targeted message in a particular location would? It’s hard to say, but it will be fun to watch if a campaign does pick up the final spot that is left.

And it’s only one according to Fox Vice President Lou D’Ermilio. “[D’Ermilio] said that no candidate has contacted the network about a coveted spot in the Super Bowl lineup and that only one 30-second slot remains unclaimed. “That doesn’t mean they can’t buy locally during the game, which is probably more likely,” he said.”

In a bit of day old news, Hillary Clinton has tapped advertising guru Roy Spence to help her set up a game plan through the February 5th primaries.  Spence, from Austin, Texas, is famous to coining the lines “Don’t Mess With Texas” and “You are now free to move about the country,” used by Southwest Airlines.

State Rep. Steve Harrelson, editor of underthedome.com and the Majority Leader in the Arkansas House of Representatives talks to the Think Tank about the New Hampshire primary.

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For this edition of Perspectives, the Think Tank welcomes Hendrix College professor Jay Barth. Professor Barth reflects on the results from Iowa and offers his thoughts on the upcoming primaries for both political parties.