Bundling Local News With Amazon’s Shopping List
The Graham family sold the Post because the death cycle of declining revenues and perpetual retrenchment threatened to erode the brand. They said the sale was executed to save the media brand from that fate. Bezos bought the media brand, not a D.C. newspaper, and will likely follow the New York Times path of extending its reach to new readers beyond the Beltway.
Getting a Reno resident to make WaPo a habit seems like a tall order: no city newspaper has been able to put a newsstand in every city like the Times has done. But we’re no longer in the newsstand delivery business, it’s now about online distribution and finding new ways to create and deliver content direct to the reader. And distribution is Bezos’ strong suit; he’s proven how to connect Amazon tightly with the consumer, and how to take excess capacity — cloud services and warehousing — and sell it.
Media distribution is similarly logistical by finding routes to connect intelligence to the reader. Traditional journalism believed that information should be delivered unadulterated from reporter to reader. The Bezos model will try to do two things: 1) personalize intel to the reader and 2) generate revenue from the intel under the guise of news delivery. How? For example, readers can be profiled from Amazon purchases and be shown more golf news if golf is known to be their hobby.
Despite the commercial creep that pervades many news sites, one of the hallmarks of the Bezos purchase seems to be brand integrity, and I’m betting there won’t be the stale hint of native advertising in the new revenue model. What’s the best commercial scenario? Positioning WaPo to deliver news, a compelling daily, even hourly activity, with the shopping list. It replicates the familiar 20th Century practice of opening the morning paper to see the ad circulars.
So how does Bezos get consumers to open this online morning paper? Hyperlocal news works, but the hyperlocal news reporting model, with Patch.com the most glaring example, has consistently proven that local ad revenues can’t cover sales and editorial costs across many markets. But that’s because local ad sales requires feet on the street. Again, here’s where Amazon ties in. Bundling the morning news with the shopping list is the perfect entree to courting SMBs into Amazon’s affiliate program, which surprisingly accounts for 40% of Amazon’s total revenues. That replaces expensive local sales teams with affiliate support call centers. The promise to SMBs is simply inclusion in the shopping lists. Amazon with news is no longer just a purchase destination, it becomes part of daily living, particularly when Amazon Fresh, its grocery service, goes live nationally. It’s the end of the errand.
What about editorial costs? Last week, Google announced it was testing the delivery of curated hyperlocal news to readers via their Google Now mobile product with expectations to scale up city by city. Although journalists deride news aggregation as cheapening a media brand, consumers don’t seem to care as long as its curated well. If Bezos is successful channeling news to consumers, he could position WaPo as a champion for local news by syndicating their content through the WaPo pipeline. Two birds killed — content distribution and support of local publishers — add up to community good will.
One unspoken flaw in the hyperlocal model is the focus paid to building web traffic; it mirrors the old circulation standard used to anchor ad rates. Local news traffic is hard to build from scratch and once mature, it can’t scale beyond city audiences; ask any media network who has tried and failed, including the Post. News doesn’t need to be consumed at the website, particularly when the CPM ad model is failing.
Local news is increasingly consumed on social platforms like Twitter and Facebook simply because this kind of news is often too mundane and irrelevant for locals to check at one particular website. Again, Bezos can position Amazon, already a commerce platform, to be a platform where media is also consumed, thus remaking it into a more social utility that starts to rival Twitter and Facebook. His genius has been consistently extending Amazon’s brand boundaries, pivoting from online bookseller to e-commerce site, and now, it seems, to social news network.
Patrick Kitano is a founding principal of Brand into Media, a strategy group for social brand management solutions, and administrator of the Breaking News Network, a national hyperlocal network devoted to community service. He is reachable via Twitter (@pkitano) and email (email@example.com).