To make money from social media, a newspaper plays consultant

Most of America’s newsrooms have been aboard the Twitter bandwagon for at least a year, though few of them have found a way to directly make money off of social media. But one small daily newspaper in Nebraska has brought in a small but steadily growing stream of revenue this summer by creating and consulting for its own social media network for local advertisers.

The paper is the 20,000-circulation Grand Island Independent (disclosure: I worked as a reporter there until April, just before this project was formally launched), and the service is called the giNetwork. Here’s how it works: Companies pay for The Independent’s web editor to set up their Facebook pages and Twitter accounts, with synchronized posts between the two. Their posts are then aggregated  and displayed with a Twitter lists widget on The Independent’s homepage (about midway down) and on a dedicated giNetwork page. The deal includes on-demand social media consulting during business hours and a regular email newsletter with tips and success stories.

The giNetwork was added on top of an existing local search service developed by the newspaper that boosts local advertisers’ search results on Google and other search engines, as well as the paper’s own local business listings. The search service, FindNEthing.com, had been offered to businesses for $79 per month, and the giNetwork is now included in the FindNEthing package for a total of $99 per month. (Businesses are required to sign on for at least 12 months in order to prevent them from quickly parlaying the paper’s network support and free social media setup into their own independent social media campaign.)

The two services together give advertisers a strong presence on Google, Facebook and The Independent, the area’s most-visited website. “You get the two most popular sites in the world and the most popular site here — it’s what I call the holy trinity of ‘onlineliness,’” said The Independent’s new media director, Jack Sheard. “You can’t get it anywhere else. There’s no other product that’s going to give you all three of those things.”

Advertisers seem to be buying into Sheard’s pitch: The network launched this spring with about a half-dozen businesses and now includes 37 in the rural town of about 50,000 — this after FindNEthing had struggled and flatlined, Sheard said. Here are the project’s main selling points, and how they’ve worked in practice.

It makes social media simple for businesses. When Sheard, web editor Stephanie Romanski and The Independent’s sales reps talked to local advertisers, they found that few of them knew how to set up Facebook fan page for their business, and even fewer understood Twitter. “A lot of them, when we talk to them, say, ‘Yeah, yeah, I know I need to be a part of that, I just don’t have the time. I know the way things are going; I just don’t understand it,’” Sheard said. So the giNetwork makes it simple: The paper sets their account up, gives them a single place to put in messages (usually Facebook; sometimes Twitter for the smartphone-attached) and provides help and advice along the way.

Sheard said the network’s been much more popular among older business owners than younger ones, largely because older ones tend to be unfamiliar with the technology while their younger colleagues are skeptical of paying someone for something they’re capable of doing themselves. Romanski’s expertise — she runs The Independent’s creative social media efforts and has done consulting for others in the newspaper business — is a major draw for advertisers and an important part of the program. “If [the businesses] are not successful with this, then we just have a dead product, and we’re just spending money on something that doesn’t work,” Sheard said.

— It gives targeted access to devoted local audiences. The key to this selling point is the aggregation of the Twitter lists widget on the homepage and the giNetwork landing page. That widget expands the business’s audience beyond the business’s few hundred Facebook fans or few dozen Twitter followers to potentially include the paper’s thousands of unique visitors per week. And, of course, a streaming list of constantly updating local deals draws a much more interested audience than a banner ad. To that end, the paper is hoping to make the giNetwork the hub of local-deals-of-the-moment — a sort of shaggier Groupon — as the network grows, attracting a devoted following of bargain-hunters. Joining the network is the only way to gain access to that following.

— Other local businesses have used it to attract new customers. The paper has plenty of small success stories. The local franchise of the Mexican fast-food chain Qdoba reached nearly 500 Facebook fans in its first two weeks with a giveaway offer; it now uses its page to spread word of its regular promotions, like kids-eat-free Mondays. A local florist started with a special deal for customers who came in and said “I love my dog,” and was getting new customers from the promotion months afterward. A tire shop has drawn new customers with its regular oil change deals.

The most successful local social-media user is a grocery store that actually launched its Facebook page independently, as the giNetwork was in the planning stages. It quickly gained thousands of followers with deep daily discounts, though it limited the deal to Facebook fans, necessitating a messy system in which customers printed out proof of their Facebook fandom, then exchanged it for a voucher at the customer service desk.

When the store joined the giNetwork, Sheard eliminated the Facebook fan requirement over the initial objections of the store’s manager. The Facebook fan page was merely a means to an end — increased business, Sheard said. “We’re not in the business to sell Facebook fans,” he said. “We will help you build them, and that’s great, but we are in the business of getting people in your door. That’s what the giNetwork does that Facebook, maybe, is limited on.”

In the newsroom

So what has this meant for The Independent? Despite the relatively meager revenue, it’s come out a plus in the paper’s cost-benefit analysis; the initial setup is simple, and the project requires even lower maintenance after that point. The paper had initially discussed a much more intensive program in which Romanski would actually run the social-media efforts for local businesses, but that idea was scrapped because of ethical (the newspaper’s web editor also being the online voice of numerous advertisers) and time issues. This project has struck a much happier balance, Sheard and Romanski said.

The network won an award this year for best new revenue idea in the online group of The Omaha World-Herald Co., The Independent’s owners, and The Hays Daily News in Kansas has picked up the idea after talking with Romanski.

But don’t expect the giNetwork to look the same a few months from now; the paper plans to keep incorporating new technologies and services into it, such as Foursquare and Shoutback, a Groupon competitor. In a late-adopting social media city like Grand Island, that means the paper itself plays a role in pioneering those new products — a refreshingly unfamiliar role for the local paper. And while the numbers are small, Sheard and The Independent’s executives are excited about the fact that they’re making real money directly from their social media efforts. “We’ve started, and that’s the key,” Sheard said.

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18. August 2010 by Mark
Categories: advertising, social media | Tags: , , , , , , , | 5 comments

  • http://www.hdnews.net Juno Ogle

    Hey, thanks for the link. I hope ours will turn out as successful as the giNetwork.

  • Steve W

    I’m torn by this concept. I’d really like businesses to handle their social media in house. They know their message and audience (hopefully) and I’m not crazy about outsourcing any part of it.

    But if they can’t manage a competent social media strategy on their own, I guess this approach at least gets them in that arena. But if they weren’t competent to begin with and don’t take full advantage, what difference does it make if someone got them all set up if they don’t use it well?

    I can’t fault the newspaper for that. The paper is wise to use its social media experience to generate revenue. But if I were a business owner, I’d rather learn this stuff on my own.

  • Mark

    That’s a fair point, Steve. I think Jack and Steph’s response would be that the advertisers are still maintaining their own voice online; the paper is just taking care of the initial technical aspects and coaching them on how to use it well. But the strategy itself isn’t really being outsourced – the paper doesn’t say anything for them or tell them what to say, other than not to bash other businesses.

    But yes, most everything the paper is doing is something that a decently social media-savvy business owner could do themselves for free – other than, of course, the reach of being part of the paper’s ad network.

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