The Biz Blog

TWO MORE INNOVATION WINNERS

There were two more winners in the first INMA innovation contest, co-sponsored by the Switzerland-based PubliGroupe, a similar association: *The Toronto Star print edition placed second for a three-section design with 24 modular advertising sizes. That is combined with differential pricing by section, a concept that U.S. publishers have been considering, but generally not implementing, to spread ads more evenly through the paper. *Our colleagues up the street at Poynter's St. Petersburg Times won a related prize judged by INMA members for creating and promoting "The Hub," a Web site for high school sports -- thus reaching a younger audience. Also in the spirit of things new, INMA has dropped Newspapers from its middle name and is now the International Newsmedia Marketing Association.

The newspaper industry may be shrinking, but the high volume of self-congratulatory writing and reporting contests rocks along unabated. So I found it notable last week that the International Newspaper Marketing Association has inaugurated a new contest for innovative business models –- you know, the ones that will support continuing news investment.

And the winner is: The Spokesman-Review in Spokane, Washington, for an ingenious variation on local search, a business directory that includes an informative free listing and lots of opportunities for upsells.

The twist at Spokane's BizFinderNW.com, is to offer a listing with address, store hours, a map and a photo for free. Businesses can amplify on the listing or buy a display position if they wish. Like most local search ventures, there is room for user comments, though no news content per se.

Kathleen Coleman, The Spokesman-Review's director of digital business operations, told me in a phone interview that publisher W. Stacey Cowles has had his eye on the yellow pages business for some time. With a template from vendor Edirectory, Coleman said, the company did a "low-cost, build-it-ourselves" design, generated 25,000 listings and now "owns the rights to tweak the software."

The family-owned Spokesman-Review has won Digital Edge and Online News Association prizes for the general excellence of its Web site, which Coleman said draws 500,000 unique visitors a month.  BizFinderNW has a prominent anchored spot at the top right of the site's home page to build traffic.

The directory has only been in business since January so the numbers to date are modest: 4,000 unique visitors and 30,000 to 50,000 page views per month, 25 "enhanced programs" and a dozen display videos. On the other hand, about 3,000 businesses already have a photo accompanying their listing. Hard start-up costs including design, list acquisition and promotion were held to under $10,000; ad contracts to date are twice that.

As the INMA judges said, there is a lot to like about the venture's positioning, tapping into both local search and video, considered to be high potential growth categories and later to queries from mobile devices.

BizFinderNW also addresses the so-called "decoupling" problem: online display ads do not command the attention or rates of print and can be annoyingly distracting (like the notorious dancing mortgage rate offerings). If online users treat the medium's advertising more like the yellow pages with a particular destination in mind, why not use part of the site to open into a virtual yellow pages?

The BizFinder model "taps into newspapers' unique strengths," the INMA judges wrote, "established commercial relationships with local businesses and credibility with local audiences." If the pioneers taking enhancement packages see results, sales momentum ought to follow.

Coleman said the pre-launch preparation included a pricing structure slightly below established yellow pages competitors and an emphasis on comprehensiveness to outflank similar efforts from other local media outlets.

Coincidentally the Spokesman-Review foray into the directory business dovetails with a recent study of yellow pages by Deutsche Bank Securities analyst Paul Ginocchio. His international survey found the business migrating quickly from paper to online in fairly direct proportion to broadband penetration.

Looking at the United States specifically, Ginocchio comments that the established companies retain an "inertia" base of loyal print customers. But the companies will be handicapped in managing a transition to online by weak brand recognition and heavy debt loads.

In sending me some operating stats, Tyler Mack, who directs sales for the site, made the same point in salesman-like fashion, "I'm certain that this program will continue to grow in both popularity and ad revenue for us," he wrote in an e-mail. "It makes too much sense not to. With the huge traffic source we have in S-R.com and such a nice easy-to-use system as this, why would anyone use anything else?"