Larry Freed on Future of Advertising

OurBlook talks with Larry Freed, president and CEO of ForeSee Results.

What advice would you give newspapers that are currently trying to create a new model for revenue?

LF: The challenge is that a single entity trying to create a new revenue model is at an inherent disadvantage because of the highly competitive nature of this industry. Until a significant number of newspapers charge for content, it will be an uphill battle for those that want to, because readers’ perceptions will be that they can get the content for free somewhere else.

One potential strategy would be to have two levels of information available, one that is free and one that is paid for. We’re seeing a little of this with local papers and even trade publications where they have a paid version that is available to their print subscribers and then a free version available to anyone.

The main thing is to make sure you’re staying in touch with your customers’ needs and expectations so that you can satisfy them no matter which revenue model you try. Those customers will need to see the paid content as a worthwhile investment.

Are magazines in the same boat as newspapers? If sleek, prosperous Gourmet magazine had to fold because of plummeting advertising, is there really much hope for other publications? What can they do?

LF: Again, it’s a big challenge. There are probably four models for magazines as well as newspapers 1) free content, 2) subscription that combines print and online content, 3) an online subscription model and 4) paid per use/pay per story model. Some talk about micropayments as well, but personally, I’m not a big fan, in that I think it will be hard to get mass adoption quickly of that model.

In difficult economic times, the reality is that competition is fiercer for advertising, paid subscription and mindshare. The ones that can survive are the ones that have both a good financial model and that meet the needs and expectations of their readers.

Is there anything else you would like to say about advertising and print media?

LF: In other industries, the integration of various channels has been successful and may be the answer for keeping print advertising alive as well. Some print publications are already doing this ... not selling print and online as separate, but selling it as an integrated package.  Clearly the power of the Internet is reach, frequency and a much better ability to target specific audiences.

(Editor's note: ForeSee Results is an online customer satisfaction management and measurement firm.

It recently did a study to determine what marketing tactics most influenced online shoppers to visit retailers’ websites. The most surprising revelation: social media aren’t as hot as you might think … yet.

Here are some of the key findings:

• E-mail marketing is the leading source of customer acquisition; the proliferation of social marketing hasn’t changed e-mail’s effectiveness.

• The largest number of respondents said familiarity with the site, company or brand most influenced their visit. Not surprisingly, this same group was also the most satisfied and the most likely to return.

• Although search engines influence 9 percent of all visits to the Top 100 e-retailers measured in the study, these shoppers are much less likely to purchase than those who came to the site because of their familiarity with the site, company or brand.

• Promotional e-mails and Internet advertising make up the second and third most popular sources of online customer acquisition in terms of traffic volume, but these visitors are less likely to return, purchase online or recommend the site.)