Google, Facebook and Your Newspaper

By William E. (Bill) Garber

Who really makes the most money?  The current measure over in the digital world is Average Revenue Per User or ARPU.  Let’s see how wildly popular digital businesses compare with your business using the annualized ARPU.

Facebook = $5

Google ARPU = $28

Weekly Newspaper ARPU = $66

That is right, the typical weekly newspaper generates well over twice what Google generates from each user.   Remember, Dizzy Dean is reported to have said that if you do it, it isn’t bragging.  And Community Newspapers sure do it!

You can check out the ARPU for Google and Facebook and other interesting businesses here:  http://cnnmon.ie/MBp08K    Of course, the real money is being made in subscription businesses such as cable television services where this link suggests that AT&T U-Verse 3-Play generates $2,021 in ARPU, though I’m pretty sure that outfit is mistaking a user for a household. In that case, the weekly newspaper is more like $133 annually.

For the record, the weekly newspaper ARPU is calculated on 2 persons per paper, 1,500 paid circulation, and $200,000 annual revenue.

Beyond ARPU.

OK, so Average Revenue Per User isn’t the only story or the whole story.

And, it may not even be the future story.

But for sure the future story isn’t going to be the end of the community newspaper.

And, it is going to be really hard for Google, let alone any other digital site, to match the community newspaper ARPU

Newspapers a la McDonald’s.

Rather than comparing the community newspaper to Facebook or Google, we may do well to look to McDonald’s as an alternate business model.

Let’s face it.  In the world of fast food, even a burger is not a meal.

More importantly, much more importantly, it is not even a snack or a refreshment.

How Ray Kroc came to buy McDonald’s when it was a couple of burger stands in San Bernardino, CA, is worth remembering.  Kroc was selling milk shake mixers.   And, by far McDonald’s was his top customer.  He stopped by and saw the shake mixers ganged several per pedestal and more than one pedestal per store.

Back then it was burger and fries with a shake.

Kroc bought McDonald’s and franchised it, and the rest is well-known history.

And, things have changed.  Today, Coke has replaced the ’shake,’ but the burger, fries and something out of a straw is still the main menu from late morning until breakfast again at every McDonald’s.  And, that is not what makes McDonald’s the world leader in food service.

Which brings us back to the community newspaper.

Back in the day if McDonald’s were a publisher, how might they have thought of the newspaper itself?

Would they see the newspaper as the burger stand?

Would they come to think of the newspaper as the box the Happy Meal comes in?

Maybe they would think of the newspaper as just the burger.

Move forward in time.

Before the Internet, the big thing was the automobile.  After all, McDonalds was born in car-crazy California!

People have always — and still — come to McDonald’s by car, save for the close-by neighbors.  When the only opening in the building was the door, everyone had to get out of their car to get the food.

Now, McDonald’s is a social place.  People who come to McDonald’s alone are unfavorably reminded of their aloneness.  And most people driving about are alone in their car.  This is a barrier to stopping at McDonald’s.

Time also is a barrier … drive, buy, drive.  Look, a sandwich is fast.  It has to be as all this driving about is time consuming, to say nothing about parking, turning off the radio, turning off the car, getting out of the car, walking into the store, buying the food, going back to the car, getting into the car, starting the car, turning the radio on, getting back on the street again.

Voila!

The drive through McDonald’s!

Hand the food to the driver through a side window of the burger stand, and there is no reminder of being alone, or fear of people thinking you are alone, no need to fuss with the radio, the car, the building doors, and so on.

Business booms.

Same fries, burger and Coke.

Sometimes just the Coke.

Many more customers.

Much less feeling lonely.

Much less fiddling with the car.

And, it gets better.

The burger stand now is the car

That’s right.  The burger stand is now every person’s car if they have ever bought refreshments through the side window at a McDonald’s.

So, every time anyone who has ever gone through a McDonald’s drive through gets into their car, the car door closing triggers that Pavlovian response, feeling that little urge for refreshment of some kind, and the good chance is that they will head to the drive through at McDonald’s for maybe just a soda … they tell themselves … and as they are stopped for their order, they see the apple pie in a box, the fries sold separately, and in response to ‘anything else?’ they ‘why not’ their order to include one more extra refreshment … for perhaps the third time that day if they are a frequent driver.

Back to McDonald’s as publisher.

McDonald’s takes a look at their newspaper business, and we imagine them thinking about the inconvenience of people having to get out of the car to buy a copy or wait for the mail to deliver their copy once a week.

That said, a drive through is not the solution in the digital age.

So, what does McPaper look like in the digital age?

Well, apparently not www.usatoday.com , if financial health is the measure.

Maybe a website is just too much like a McDonald’s before the drive-through.  People have to make the effort to go to the paper.

Some publishers are already sending a digital reproduction of ‘the real newspaper,’ ads and all, to the subscriber.  It sure beats waiting for the mail.  But not much else.  And, not everyone orders a salad at McDonald’s, either.

Maybe there is something digital that retains the Pavlovian potential of the automobile.  Any suggestions?

On further thought, lots of sales at McDonald’s do not include a burger.  I’m a vegetarian, and I drive through.

And, many burger sales include additional items that together cost more than the sandwich.

Let’s just say, things have changed since John Campbell, postmaster of Boston started publishing the first community newspaper in America, The Boston News-Letter, followed not so ironically a little later in the 16^th century by John Montagu, the 4th Earle of Sandwich, lending his name to a few islands here and there as well as to that great compendium of handy food, the sandwich?

So, what do you think will become important revenue offerings at the community newspaper other than the newspaper itself?

What might an expanded publishing menu look like?

What might create a Pavlovian response when your subscribers reach into their pocket for their smart phone instead of opening their car door?

What might generate revenue without syphoning off ad revenue from your mail-line newspaper?

Time to share your thoughts, now.  Feel free to email me at bill@ilsw.com

Suggestions for sharing.

• Feel free to propose money-no-object, time-no-object ideas.
• Imagine projects with overhead so small one could totally tend to it while watching college football on Saturday afternoon each week.
• Describe the person who will pay for your proposed new service.
• Imagine how to generate revenue using your newspaper but without growing ad or subscriber/single-copy sales revenue.
• Maybe just make the argument for selling more subscriptions and ads or raising the price for one or both.
• If none of this makes sense, write the obit for community newspapers … and start a fight!

Bill Garber is the founder of Interlink. He can be reached at (888) 473-3103 or bill@ilsw.com.