New Experiment in News & Coffee

Summary–Newspapers Innovate:  An innovative approach to newspapers is being launched in the Czech Republic:  A (very) well-funded group will open cafes linked to the newsrooms of hyperlocal papers (to be published by the group).  Many Europeans like their espresso with their newspaper (and vice versa) so why not?

Yes, we have promised that this blog is not about newspapers, but we cannot help but look for innovations while all around us people are singing dirges.  The New York Times reported that a new venture has launched in the Czech Republic to publish hyperlocal newspapers in four cities and to open associated cafes.  http://www.nytimes.com/2009/05/11/technology/internet/11iht-papers.html?8ad&emc=seiab1

PPF Group will soon publish multiple local newspapers on a weekly basis, in addition to multiple websites (can you say “repurpose?”), plus they will open cafes that will be next to—we mean right next to—the newsrooms for these papers.  Literally, the door will be open to the newsroom of each paper.

In addition, visitors will get help on such matters as building their social network profiles or other training on Internet skills.  The entire project will be branded “Nasa Adresa” or “Our Address.”  They may try to scale the model to elsewhere across Europe.

Oh yes, a couple of minor bits of information:  PPF Group has about a gejillion dollars (though they are putting about $13.4m into it).  And, oh yeah, I knew we forgot something:  Google is a major participant, providing the training and, of course, the advertising.  It just so happens that Google is not first in search in the Czech Republic.

So What?

So, it might be a good model.  The cross-platform approach adds the “real world” to demand for news plus Internet access.  It is a recognition that a “Café Society” is an optimal place to create an intersection of social practices.

Then again, its “goodness” as a model may depend largely upon the unusual circumstances there, to wit:

1. Czech is not spoken by a large number of people, so there is not a lot of space for competition, especially from major players who need large scale;  only those who take localization seriously—e.g., Google—would have a chance.
2. The Czechs have a kind of “Cafe Society,” which in this case means that they like to sit at the cafe while sipping their latte and reading.  It is like Paris.  However, other European countries are not quite the same:  The Italians named their coffee espresso for a reason.  Most coffeehouses there do not even have chairs (only in the restaurant part of the place).
   
3. People in European countries tend to like their newspapers, very much.  The hyperlocal approach, though novel, could be appealing, especially in new democracies, where the local politics are a hot topic.  Think of the broadsheets and pamphlets of London over the centuries.

The Ad Model Will Prevail

The online ad model is taking a pounding because some of the major names in the biz are not hitting their numbers and CPMs–and other metrics with which to make money–are plummeting.Here’s the prediction:  It will dip for a while and then climb–fast.  And here’s why:

1.  The current dip comes from these sources and, if you ponder them for a bit, you will see that they reinforce each other:

Source One:  The contaminated economy in general.

Source Two:  The te3rrible ad-spend market, related to the lousy track record of large media companies in hitting their numbers.  (And in particular, companies with a big Internet or mobile play)

Source Three:  Advertisers still “don’t get the web.” (OK, let’s expand our brains and start saying something like:  “Advertisers don’t get the digital platforms.”)

So, you have the ad people unwilling to stick out their necks:  What they really want to do is preserve their jobs while all around them are losing their heads.

2.  The upside?

2.1 (love this numbering system, huh?):  The reach per dollar spent is pretty enormous in the digital markets.

2.2 The demographics are changing–of the ad buyers and ad placement people:  They are “digital natives.”

2.3  The production costs are nearly nil.

2.4 You can change ads on the fly and according to market response.

2.5  And the main reason:  The granularity of the demographics and the data.  It is soooo good (and getting better every day) that people do not know what to do with it.

2009 is one of those transition years–the shift of more money to new media platforms.  Ad agencies will look like geniuses because “now they get it.” But, …

It does not follow that this is advice for new investments.  A lot of people are not sanguine about start-ups and the ad-driven model.  IN other words, the fortunes have been made there.  Now it is the spread of the model to the established economy.  Advertising needs scale or depth–breadth of audience or depth in a niche audience (which, when you think about it, is really the same thing).  Venture capitalists are not looking very closely at startups with the ad-driven model.  So even if you think you are the next Google, please be prepared for a lot of rejection.

Please be prepared for a lot more going on in the new media ad world?  Digital platform ad world?

And where will that take us with the digital transformation occurring in February????