A decade ago, most of us rarely heard the term “channel marketing” in conversations among newspaper publishing executives.

Today, channel marketing is a familiar notion, but the technique - in which brand information is pumped through various channels to attract specific audiences - is undergoing a transformation of its own.

It is difficult to not think of marketing newspapers in terms of “channels.”

Yet while other businesses have been marketing their brand through multiple channels for decades, the publishing industry has just now begun to use tools aimed at sending information and advertising through various channels, or pipelines, to customers.

Interestingly, some publishers are expanding their concepts and strategies for how to reach information consumers. These organizations are embracing and combining two old ideas - the traditional marketing idea of “placement” and the ancient idea of “customization.”

These ideas have long been entrenched at direct marketing companies - companies that pose a serious threat to news publishers in many parts of the world. How? Because they were the first to combine the strategy of customization with rapid advances in digital technologies to deliver a new customized experience to the consumer.

More worrisome is that the direct marketing industry has far more expertise and experience with mass customization than do news publishers.

At pipeline’s beginning

The word “channel” evokes the mental image of a pipe through which information is moved from the news and advertising departments to the reader. At the head of this pipeline are editors, reporters, ink suppliers, advertising salespeople, etc.

One can move multiple products down a single channel and that is what newspapers did for much of the 20th century. For example, many newspapers produce more than one edition and move those editions through the same channel to different readers. One edition may have been a product for central city readers and another for the suburban readers. Nevertheless, these two editions are two products that are customized, though often superficially, to reflect the different concerns of different segments of readers and advertisers.

Though competition from direct mail advertisers is not a factor in some parts of the world, it became a serious threat to newspapers in many markets during the last 30 years.

The appearance and maturation of this threat in the early 1980s generated a newspaper response that, for the first time, caused publishers to reconsider the construction of that single pipeline (channel) to the reader. Newspapers responded by creating channels that carried new products to traditional non-readers via the mail, delivery person or vending machine.

Other newspapers exploited all three of these channels with three different types of publications, but each product represented little more than a highly general segmentation effort. This response was an attempt to combat the customization efforts of direct marketing advertisers.

In retrospect, most students of newspaper publishing regard this strategy, at best, as a defensive measure against competitors. This strategy has had no significant success in taking back much of the business that was stolen over the past 20 years.

Web’s impact major

The maturation of Web technologies and the perceived threats to advertising that surrounded them caused newspapers to once again reconsider the construction of their channels.

Unfortunately, many of us have missed the history lesson here - that tightly coupled, multiple-channel reactionary strategies are not the future. Obviously, we have to be ahead of the competition rather than always working from a defensive posture.

Thinking about news and advertising problems in the context of channels is useful, but it is useful only if the construction of channels is driven by readers and advertisers and not the traditional whims of publishers or solely as a reaction against competitors.

Moreover, the concept of information channels is more useful if we regard our channels as temporal avenues, subject to constant changes in reader/advertiser preferences. This way of thinking would put our industry in a transition mode, ready to move into the next phase of overhauling our vision for marketing information today.

Ubiquity key advantage

To be ubiquitous means that we have to reach readers when and where and how they want and, most importantly, with information useful enough to command a premium. And that can’t be done without knowing your readers’ individual preferences.

This approach requires us to think differently about channels. Focusing on readers’ preferences changes the notion of channel marketing to one of “placement” marketing.

Unlike a focus solely on channels, placement assumes the newspaper publisher has a well-researched understanding of the different preferences of different readers - in what they want to read, where they want to read it and when they want to read it.

In response, the publisher satisfies these preferences in ways that customize the information, the timing of delivery and even the very channel through which it moves.

Customization in placement of information is risky business and requires careful planning and tight integration. Without those tools, a publisher is likely to pile up loses due to high production expenses or a variety of competitive pressures.

Each company and market varies, but I recommend the general approach below for those interested in developing a long-term placement strategy:

*Do you have an interdisciplinary management team that represents all areas of the business that can work on this strategy?

*What type of placement customization do your customers want and are they willing to pay more for it? Alternatively, will they pay more for it from you or from your competition?

*Looking at the issue from the perspective of readers and advertisers, outline the key features of the appropriate solution.

*Can your existing people, processes, knowledge, organizational structure and technologies deliver the solution(s)? Does your business need a makeover to deliver the solution? What processes can be outsourced?

*Can you deliver the solution(s) in steps, choosing those most desired by the customer and with the best return first? If so, what is the long-term road map to mass customization? Given a worst-case scenario, what are the possible exit strategies for each customized solution?

*Can you save money by customizing?

*How will your competitors respond and how will you counter that response?

*What are the necessary support roles for all your stakeholders - readers, advertisers, suppliers, board of directors, investors, employees, etc.?

One of the key aspects of customizing the placement of news and advertising is to make sure the reader is aware that those elements are indeed customized just for him or her.

Otherwise, any expectation of significant value creation or the opportunity for increasing margins will be lost.

Building for CRM

There is much talk in the newspaper industry about customer relationship marketing and the technologies that supply its technical foundation.

However, many companies are putting the cart before the horse. One must first deploy a strategy for placing mass customized information in the market before CRM becomes useful.

Without the strategy, CRM is just a catchy phrase and a lot of expensive computer software. If it is implemented in the correct sequence, the strategy begins driving development of useful digital approaches, rather than the other way around.

The general framework outlined above will reveal the degree of customization expected by readers and advertisers.

In the past, newspaper publishers and editors have been guilty of customizing an edition or a new publication with little more research than a couple of focus groups.

Due to the gross granularity of our research, we are often surprised when we learn that many readers and advertisers either do not know the publication has been customized or, worse, we have wasted scarce resources and “over-customized” a package.

Effectively placing customized information is a very difficult task.

Some products in some markets may achieve great success while similar approaches in other markets are disasters. The key is to avoid imitating the experiences of other publishers because it is highly likely that your readers’ and advertisers’ preferences are different.

This mistake can be avoided if we keep in mind that placement of information is based entirely on the preferences of individual advertisers and readers.

The result

Though the challenge of customization is daunting, the payoff can be spectacular for the successful company.

If you are successful with placing mass customized news and advertising information in your market, you will have changed the value equation for readers and advertisers in a way that raises significant barriers of entry to your competitors.

Imagine the challenge if you were going to launch a new edition of your paper in a nearby city but then learned that readers there generally expected their information to be tailored to their interests, delivered at the hours they wanted it, via they channels they wanted it - and were allowed to switch channels at will. You might rethink your interest in that market if customization is new to you.

Owen Smith is principal of Owen Smith Associates, a Rochester, N.Y.-based newspaper management, marketing and technology consultancy. He is also contributing editor/marketing for Asian Newspaper Focus. He can be reached at 585.330.4676, or via e-mail at osmith@rochester.rr.com.