After our downbeat feature last Friday on former print subscriber Michael Stephens, we have declared this Good News Week at the Biz Blog. Seldom will be heard a discouraging word -- at least for the next seven days.
As it happens we spoke by phone recently with
Mike Leo, CEO of Operative, a leading vendor of advertising workflow systems. He is an involved rather than impartial observer, but he does not share the trendy view that newspapers are falling hopelessly behind more nimble digital competitors.
The game, he said, "is still in the early stages. The industry is still rounding first base. The Internet is one piece, but digital will be an even bigger space."
Leo is a believer that we are not far from technologies that will locate where you are through a mobile device and serve you appropriate content and advertising -- about the nearby pizza shop, for instance, if you are hungry.
Newspapers ought to be able to draw on "being great at high transactional businesses in the first place," he said. But that will require putting the best people in their organizations against new tasks, and a concurrent "commitment to losing a revenue stream (here and there) to focus on making the new work."
In the 1990s, Leo was co-founder of Avenue A, which has grown into the largest interactive ad agency. He observed that as with any fledgling industry there have been growing pains. In the late part of that decade, "digital ads were big but for the wrong reasons," he said, mirroring the venture-capital-driven wave of web flops.
Now the contextual part of web advertising is solid, "but the local part hasn't really been done yet," leaving opportunities for more refined search, local online video and ads on newer platforms. Those are obvious openings for newspapers in a total digital advertising market Leo expects to see grow 25-30 % annually.
Operative has a blue-chip list of clients - among them the Wall Street Journal, New York Times, Economist, and WPP ad agency. His is one of several enterprises I have heard of recently addresing
efficiencies in the operating end of digital media. As a site grows, so does the volume of coding, sorting and data analysis. So enhancements like Operative piggyback on the basic economies of digital delivery, making the enterprises that much more profitable.
