Apr
23
Analysis: Could data mining bail out newspapers?
April 23, 2009 |
By Clarence William Cromwell
The new business model proposed by AnnArbor.com looks like a cross between database marketing and data mining.
It appears to be the first time a company has attempted to fund a daily newspaper operation this way.
The people at AnnArbor.com will probably say that its too early for pronouncements about whether the site will succeed or not–because by all accounts they’re still planning the site.
Nevertheless, I’d like to count off some of the things that will work for and against the new business model.
Why data mining could help newspapers
1.) As the designers of the site point out, targeted advertising could be more effective and more economical for advertisers, because–theoretically–it will help them reach the right customers, but by spending less money than they have been spending in the newsprint edition of the paper.
2.) The database marketing model pairs well with a newspaper. Normally, building a customer database is expensive and time-consuming, but not when you give people a lot of good reasons to visit your site and punch in relevant information. You may not mind providing your name, email address, age and gender in return for the whiz-bang news services on the site. You’ve given the same information to every other site that you visit, and this time you’re supporting the local newspaper.
(I don’t know whether AnnArbor.com will ask for that specific information, because the site isn’t up yet. Consider it a hypothetical.)
3.) With customers visiting 365 days a year, a newspaper would potentially be able to gather an astounding amount of data. Especially if readers are willing to fill out surveys, or participate in polls as they visit the site.
(I’m also speculating about the surveys. Don’t get mad at AnnArbor.com.)
4.) Database mining could be applied to journalism as easily as to advertising.
How data mining might falter
1.) Some people might feel uncomfortable giving up personal data. (For the record, I don’t mind, as long as the information is being used by a reputable site like AnnArbor.com. MySpace began targeting ads to my interests a long time ago, and it hasn’t caused me any discomfort yet.)
I don’t know how the concerns over Facebook and other sites will play out, but I have a feeling that people will either become more comfortable with ads targeted to their personal information–or they will wake up from the dream that content and services can be provided for free.
2.) The financiers of the project might become impatient before the site reaches profitability. It’s happened before.
I’d like to see my local newspaper survive, but I’m also watching this business model because it looks like the closest anybody has come to a profitable, online-only newspaper.
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