Media future promising, grim, America East speakers say

HERSHEY, Pa. -- In this town built on chocolate, the springtime messages delivered to newspapers were, well, bittersweet.

America East/New Media World, a conference and trade show for print operations and digital media managers, kicked off March 30 with good and bad news for publishers trying to survive -- and hoping to thrive -- under the thumb of the Internet.

Optimists might have preferred the luncheon keynote talk by Elissa Myers, president of the Electronic Retailing Association of Washington, D.C. Sure, Internet retailing itself minimizes the roles of intermediaries such as traditional advertising media, Myers said. But that's assuming consumers know about and can find retailing sites.

"The No. One problem Internet retailers face is driving traffic to their sites," she said. "The potential base of advertising is suddenly swelling."

Myers' message to newspapers? Accept, don't run from, that role in promoting Internet retail sites, and capitalize on that new base of advertisers.

Pessimists in the crowd, however, would have been more attuned to the message of the first keynote speaker, Mark Walsh, president and chief executive officer of VerticalNet Inc. of Horsham, Pa., who sees troubled times ahead for media companies that aren't focused purely on Internet business models.

Walsh cited the example of consumer on-line services in the first part of this decade. At a time when competitors such as CompuServe, Prodigy, GEnie and Interchange were all owned (some would say pigeonholed) by large, diversified corporations, America Online emerged as the undisputed champion. Why?

"Companies specially aimed at new media often win," he said. "In that arena, the pure-play won. The company that went to bed and woke up thinking only about on-line services was AOL."

Newspapers and other pre-Internet media may face the same struggle, Walsh said. "When a new model evolves, you often see a lack of vitality and mobility from the prior model," he said.

VerticalNet builds web sites around specific communities of interest. Maybe you didn't think there was a need for meatandpoultryonline.com or adhesivesandsealants.com, but enough people did that VerticalNet built those sites, along with many others with a similarly narrow focus.

And faster than you could say "on-line trade magazine," Walsh pointed out that even the smallest niche sites, with perhaps 2000 regular users, were still highly marketable audiences for specific advertising messages.

"There's no 'M' in our 'CPM,'" he said, referring to the industry shorthand for "cost per thousand." "But we are creating category-killer buying opportunities." And VerticalNet draws on a partnership with portal giant Excite -- driving traffic by advertising around niche keywords.

Newspapers, with their unfocused, mass-audience approach, are vulnerable to loss of market share when competing on the Internet, he said.

"Small communities and small companies change markets, not big ones," Walsh said. "By the time the big companies adjust, they'll be like dinosaurs banding together to get the last leaves."

The publishing industry held off extinction at least long enough to shuffle attendees through the America East trade show, which was a blend of seeming non sequiturs: a supplier of offset press blankets adjacent to an on-line directory provider; a bank of strapping machines across from an Internet access reseller.

What was that Walsh said about needing focus?

-- Jay Small

Electronic Retailing Association, (202) 289-6462, e-mail: tmalik@retailing.org
VerticalNet Inc., (215) 328-6100, e-mail: info@verticalnet.com.

From THE COLE PAPERS, May 1999, Copyright © 1999, All Rights Reserved.