It's not just the newsroom's fault -- Ad sales must change, too

Every day I become more convinced that the key to economic success online lies in minimizing the expense of selling and placing ads. Look at how retailers like Wal-Mart and Target destroyed the big department store chains in the United States. With so many media sources going after advertisers' money, you've got to keep your expenses down to compete on price. As a journalist, I'd rather cut expenses in ad sales and placement than newsgathering.

I thought about this this morning when I read in the LA Times that the paper was shutting its Outdoors section as a cost-cutting move. Forget for a minute the wisdom of an industry obsessed with attracting younger readers cutting a section about stuff that young people do during daylight hours. The fascinating information, to me, came toward the end of the Times' story, where the report said that "over time, the section failed to attract advertisers. Readership surveys indicated that only about 28% of Times readers perused Outdoors regularly."

Twenty-eight percent of the Times' circulation translates to more than 230,000 readers. Are you telling me that no one in the outdoor recreation space wanted to reach nearly a quarter million Southern Californians? I call B.S. on that.

No, more likely, not enough advertisers wanted to reach those Times readers at the ad rates that the Times charged. Yes, I know that reporting is expensive. But every newspaper I've worked at, Times included, had a slew of sales reps driving BMWs, taking clients to lunch at expensive restaurants and entertaining advertisers in skyboxes at sporting events. Those sales commissions and expenses inflate ad rates, too.

That's not the only way to sell advertising anymore. With companies like Google and Yahoo selling billions of dollars of ads through low-overhead, automated systems, the Macys of the publishing world are going to have to start acting more like the Wal-Marts online. If the newsroom has to reinvent itself to compete in the new media age, so should advertising departments.

I thought about that, too, this afternoon when reading about the debut of Open Source Media (formerly Pajamas Media). The centerpiece of what this group of (mostly) conservative bloggers appears to be an advertising network. Here's hoping that as this new group challenges mainstream media in its reporting, it challenges the mainstream media's advertising sales and business models as well. If online media is to prosper, we've got to do better.

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