Volume 2 · Number 2 · December 2003

digital edge report

Online Registration:
Converting Anonymous Users to Loyal Customers

© 2002 Newspaper Association of America. All rights reserved.

digital edge report

Online Registration: Converting Anonymous Users to Loyal Customers
By J.D. Lasica
J.D. Lasica (jd@well.com) is an independent journalist, former new media manager and former editor at The Sacramento Bee. He is currently writing a book about digital media, and writes a daily Weblog at www.newmediamusings.com.

NAA Staff Acknowledgements: Editor: Rob Runett Layout: Katie Howington

© 2003 the Newspaper Association of America. All rights reserved. No part of this document may be reproduced in any form or by any means without the prior, written permission of the Newspaper Association of America. digitaledge

digital edge report

Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Approaches to Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Buy or Build? Vendors and Market Size Consideration . . . . . . . . . . . . . . . . . . . . . .11 The Impact of Registration on Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Benefits to the Newspaper Enterprise Beyond Advertising . . . . . . . . . . . . . . . . . . . .24 The Legal Arena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Looking Ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 Additional Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 Report Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

For more information about the Digital Edge Report, contact: ROB RUNETT, Director, Electronic Media Communications Newspaper Association of America 1921 Gallows Road, Suite 600, Vienna, VA 22182-3900 703.902.1806 fax: 703.902.1745 email: rob.runett@naa.org www.digitaledge.org

© 2003 Newspaper Association of America. All rights reserved.

i

digitaledge

Introduction
During the past three years, a handful of news pioneers took the first halting steps down the trail of online registration. But it wasn't until 2003 that the industry began a wholesale move toward user registration, coming to view it as an inevitable step and valuable tool in understanding online customers.
Today the conversation has largely moved past whether to require registration and settled into a new phase: How can newspapers capitalize on this new wealth of customer data? Leaders in the field of online registration have begun to mine these registration riches to deploy targeted advertising campaigns, launch new e-mail initiatives and build out sections of their Web sites in response to readers’ needs. Circulation, classifieds, editorial and customer service all stand to gain. At a minimum, registration has succeeded in making the online space more tangible to advertisers. “When you approach an advertiser to sell an advertising campaign, you’re no longer talking a bunch of techno-flap about page views or unique visitors. You’re talking about real people and customer characteristics in a language that’s meaningful to advertisers,” said Steve Yelvington, vice president of strategy and content for Morris Digital Works. “That’s a change this industry just desperately needs.” This report will look at online registration from top to bottom, with actionable strategies for decision makers who have committed to a registration program and for those who are weighing the pros and cons. The following chapters explain the most advanced registration techniques, the various registration models available, best practices, new revenue streams, lessons learned from registration pioneers, added value brought by vendors, and what’s coming next.

Registration data can become essential building blocks in a paper's efforts to become an audiencefocused media company.

But while registration is rooted on the Web, its benefits extend across the enterprise. If executed with care and precision, and embraced by the publisher, registration data can form the essential building blocks in a paper’s efforts to become an audience-focused media company.

© 2003 Newspaper Association of America. All rights reserved.

1

digitaledge

Approaches to Online Registration

On the Internet, many people still chafe at the idea of having to walk through a registration process to access news. But the complaints are becoming less bellicose now that more news sites have adopted the practice and registration has taken hold as a familiar part of the online landscape. Newspapers of all sizes have taken the plunge and now require registration, from The New York Times (11.7 million registered users) to the Watertown (S.D.) Public Opinion (8,814 registered users). During 2003, Advance Internet, Knight Ridder Digital and Morris Digital Works began to roll out registration programs. So did U S ATo d a y. c o m , S i g n O n S a n D i e g o . c o m , NewsOK.com in Oklahoma City and dailies in mid-size and small markets such as The Augusta (Ga.) Chronicle, The Bakersfield Californian, and Carroll County Times in Maryland. Morris Digital Works' Steve Yelvington summed up the new prevailing mindset this way: "Given that our business model is built on aggregating relevant audiences for local advertisers, there's no other way to go. My only regret is in not moving ahead as aggressively as we should have in harvesting this information. I wish we had done this a year or two ago." A year or two ago, most online news managers could only glean hints about their audience by poring over traffic reports and IP addresses. In truth, they were largely flying blind, unable to ascertain the demographic and psychographic makeup of their visitors. Registration doesn't completely solve that puzzle, but it adds deeper layers of understanding, especially when combined with other audience management tools that track individuals' behavior while visiting a Web site.

Today, with the advent of registration systems, Web managers are asking for, and receiving, information about the gender, birth year, postal address and local media habits of their online visitors. Besides The New York Times on the Web, which required user registration since its first day on the Web in 1996, other early movers include Belo Interactive, Tribune Interactive and Washingtonpost.Newsweek Interactive, all of which impose access controls on their content to spur users to fork over the demographic goods.

Newspapers of all sizes have taken the plunge and now require registration.
There's a new bargain being struck between Internet publishers and site visitors: Publishers can't afford to provide local content on the Web for free, but instead of demanding payment, digital-media companies want information. And millions of people are providing personal data in exchange for content. "People have to pay in some form, and the best way to do that online is to get payment in the form of personal information as a way to increase targeting advertising possibilities," said Rebecca Baldwin, director of product development for Tribune Interactive. Added Stephen Newman, deputy general manager of NYTimes.com, "From the beginning we felt strongly that filling out a form one time was a very small price to pay for the value you were getting."

© 2003 Newspaper Association of America. All rights reserved.

2

digitaledge

Interestingly, all of these registration pioneers have taken somewhat different paths in how they ask for and use customer data.

D i f fe r e n t A p p r o a ch e s t o Registration
Approaches to registration run the gamut from voluntary registration (San Diego), to a quick three-question pop-up approach (Washington Post, USA Today), to a minute-long form (The New York Times), to a lengthier form (Tribune), to a detailed form that takes perhaps four minutes to complete (Belo). SignOnSanDiego.com began to ask users for registration information in July 2003. "We liked the Washington Post approach, but we wanted something still more gentle," said Chris Jennewein, The San Diego Union-Tribune's director of Internet operations. "We didn't want to go the L.A. Times route, which we thought was too restrictive."

SignOnSanDiego.com

Through the use of cookies, a user is allowed three visits to the site before a window pops up to ask for age, gender and ZIP code. Even then, the user can click through to the story by choosing, "Ask me later," allowing the user three more visits until another pop-up window appears. If he or she does sign up, it takes all of 10 seconds. San Diego is home to a large military community, which prizes its privacy, Jennewein said. It's also a destination city where travelers may be visiting the site to plan a vacation itinerary, "so roping off the site would be a mistake in this market," he said. "In an industry like newspapers where growth in customers is flat and the one growth of area is online, we think it's vitally important to continue that growth," Jennewein said. "Online is one area where newspapers can continue to be a mass medium. There's a danger in the registration concept if

newspapers see it as the first step toward a subscription model." The Washington Post Co. launched its unobtrusive but mandatory registration program on Aug. 7, 2002. Site visitors were met with a pop-up box that asked them to volunteer their age, gender and ZIP code (or country if they lived abroad). A week later washingtonpost.com began to make the questions mandatory and launched the survey section by section across the site, so that only the front page is freely accessible. CEO Christopher M. Schroeder said at the time that the site was "committed to better understanding our audience so we can create a more powerful user and advertiser experience," and that being able to target segments of the audience was "an exciting and potentially enormous proposition for Web advertisers. Interactive capabilities such at this are not only unique to the medium, they are the

© 2003 Newspaper Association of America. All rights reserved.

3

digitaledge

Azcentral.com, the joint Web site of Gannett Co. properties The Arizona Republic and KPNX TV, signed up 536,000 users within seven weeks of launching registration on Sept. 2, 2003. Like USAToday.com and washingtonpost.com, it asks for a user's age, ZIP code and gender. "With a long registration form, there's no incentive for people to tell us the truth," said Mike Coleman, senior manager of digital media.
washingtonpost.com

keys to the success of quality content sites." Company spokesman George Nolan said the Post continues to use registration data to improve the user experience and to drive advertising revenues through precision ad targeting. He said the site does not disclose registration figures. USAToday.com launched its own registration effort in February 2003 with a system that closely emulates that of washingtonpost.com. The site collects three pieces of information — ZIP code, age and gender. Hence, the system's nickname: ZAG. "Our goals were to make it more user friendly for customers as well as information rich for advertisers," said Susan Lavington, director of marketing. The ZAG approach seemed nonintrusive for users and covered the basic demographic elements of interest to advertisers, she said. Unlike the Post, USAToday.com requires registration only for returning visitors. "If you're a firsttime customer, we want you to sample the site and come back again," Lavington said. Returning visitors get a registration interstitial when they click to a story off the front page or section front.

For first-time visitors, azcentral.com decided to steer a course midway between washingtonpost.com and USAToday.com. If a user follows a link from Google News or Matt Drudge or a Weblog, no registration is required until the user clicks on a link to a second story. "We didn't want to shut out Google News, especially when a national story hits," Coleman said. "And we don't want our registration database filled with people who just want to read a story about Britney Spears and Justin Timberlake." The one hitch so far is that azcentral.com assigns no log-in or password, and so users have to reregister each workday if they work at companies where the IT department clears out the cookies from hard drives on the network every night. Azcentral.com has assigned one full-time staffer to deal with "the 18 different reasons people might be having cookie problems," Coleman said. Another newspaper company squarely in the ZAG (ZIP code, age, gender) camp is Advance Internet. "I think it needs to remain quick and simple to work," said company president Jeff Jarvis. "Users are tolerant of a small speed bump. I fear they would not tolerate a maze."

© 2003 Newspaper Association of America. All rights reserved.

4

digitaledge

Visitors to MLive.com, NJ.com and other Advance Internet properties see a story if they follow a search engine or Weblog link; to follow a second link, registration is required. A few business-related services also don't require registration. "Our traffic is up considerably over last year and that's the best proof that this works," Jarvis said. Advance Internet decided to reopen the sites' employment sections to non-registered users to make it clear that the questions about age azcentral.com and gender were not related to employment advertising. "They weren't, but we wanted to be certain there would be no misunderstanding," Jarvis said. The New York Times on the Web has been requiring users to register since its first day in cyberspace back in 1996. Its registration database has grown from 1.7 million active users 18 months after launch to 11.7 million today — the highest number of registered users for any online newspaper in the world. The driving force behind registration, New York Times Digital CEO Martin Nisenholtz, told a Jupiter Media conference in March 2002: "The purpose was not so much to collect demographic information about our users, but more to establish customer contacts. Then when we wanted to go back and upsell them to new services, including paid products, we could." The Times originally asked for age, ZIP code, gender and income range. In January 2002, NYTimes.com added new fields to its registration page that sought information about job title, function, industry and whether the user subscribes to the newspaper. Readers who are not registered can see NYTimes.com's front page, section fronts, classifieds and movie, theater and restaurant reviews, given New York's popularity as a tourism desti-

nation. In addition, readers who access the site via Google News do not need to be registered to view the article. However, users who follow a Google search engine link to the site do need to be registered. The Times is working on ways to move certain Google search results outside the registration firewall, said spokeswoman Christine Mohan. Tribune Interactive helped cement the current trend toward registration by introducing it at chicagotribune.com in March 2002 and at latimes.com a month later. "I don't know if we broke the ice or if everyone was thinking about doing the same thing, but once the Chicago Tribune and Los Angeles Times began requiring registration, we began seeing it much more across the industry," said Rebecca Baldwin of Tribune Interactive. All told, Tribune Interactive has 3.5 million registered users across the network — and it is a network. A user who registers at one Tribune site can log on to any of its other sites. Tribune clearly is thinking about packaging segments of its network-wide audience to advertisers. "Tribune doesn't have a central strategy for required registration. What we do centralize is the enabling technology," Baldwin said.

© 2003 Newspaper Association of America. All rights reserved.

5

digitaledge

Each newspaper is free to choose whether to roam down the registration path. Tribune Interactive's registration form asks for the user's name, birth year, gender, phone number, e-mail and street addresses and subscription status, with some sites asking for household income and areas of interest. Some non-news sections, such as latimes.com's advertorials, Kids Reading Room, high school sports and L.A. Times events such as the Festival of Books and Travel Show, are open to non-registrants.

Users who follow a search engine or Weblog link to chicagotribune.com or latimes.com can't access the article unless they have registered. "Both L.A. and Chicago said they saw no reason to let people in because they got there in a certain way," Baldwin said. On the whole, the reaction of users to registration has been "surprisingly receptive and overwhelmingly positive," she said. Those who complain are told that registration enhances advertising revenue, which allows the company to provide a free site, "and they accept that," she added. Latimes.com lost about 20 percent of its audience immediately following registration but regained the traffic after seven months, said Elaine Zinngrabe, the site's assistant general manager and executive producer. In 2003, The Hartford Courant's ctnow.com and The Orlando Sentinel launched registration efforts, following in the footsteps of Chicago and Los Angeles. "Their fears were relieved when they saw the first couple of sites roll out so successfully," Baldwin said. "There's an initial drop-off in visits when you require registration, but metrics like page views, loyalty and visits per visitor continue to grow. Yes, we have fewer drive-by visitors, but those who do come have a stronger relationship to the Web site than before." Several new media managers expressed admiration for the aggressive registration approach pioneered by Belo Interactive. "We've been out in front in a lot of ways in the online space, but in this area we're following the lead of Belo, which-

chicagotribune.com

In Chicago, the new media managers embraced registration as a tool to get a deeper understanding of their online audience, which they weren't able to glean from third-party surveys. The registration data allowed chicagotribune.com to deliver targeted ads and to tailor marketing messages to a select audience on behalf of advertisers, Baldwin said.

© 2003 Newspaper Association of America. All rights reserved.

6

digitaledge

has done just an extraordinary job of registration implementation," said Yelvington of Morris Digital Works. Linda Fisk, vice president for audience development and management for Dallas-based Belo Interactive, said the benefits of user registration include targeted content and advertising, personalization options, segmented online marketing programs, online loyalty programs, targeted incentives and rewards, and product development guided by consumers. "It's a win win win," Fisk said. User registration benefits advertisers by providing rich, detailed demographic and psychographic profiles about customers as well as giving ad clients a way to tailor messages to select audiences. Registration increases the ability of Belo's newspaper and TV Web sites to create content, products and functionality tailored to users' interests and lifestyles. And customers gain by having a more personalized content experience and by receiving advertising messages that are useful and valuable

rather than a nuisance, she said. The company began a yearlong rollout of mandatory registration in May 2001, beginning with WFAA.com and DallasNews.com's sports section. By mid-2002, all 24 of Belo's Web properties were under the registration umbrella. Today the only sections not requiring registration are the front page of each site, the archives and classifieds. A chief source of wonderment in registration circles is how Belo Interactive has managed to pull off the trick of asking online readers to answer some two-dozen questions. Users are asked for their name, gender, birth year, e-mail address and 16 lifestyle questions about hobbies and interests. A phone number and income level are voluntary, making it more likely that those answers are valid, Fisk said. Belo's newspaper sites ask for a street address to match against the circulation database; Belo's TV station Web sites ask for a ZIP code.

DallasNews.com

© 2003 Newspaper Association of America. All rights reserved.

7

digitaledge

Fisk said she is asked all the time by colleagues at other sites about the risks of driving away users. "The fear in the industry is that you can't have a long registration form, that you can't wall off the whole site, that the outcry will be incredible and you'll drive consumers away. I was braced for worst but those fears just weren't realized by our organization."

Two years ago, users were more wary about the practice of registration, but now they see it as a normal course of business on the Internet, Fisk said. As part of its registration effort, Belo Interactive created an in-house customer service system, with a small number of staffers given the task of responding to reader e-mails. Mid-size, Smaller Markets Join the Trend Newspapers in mid-size and smaller markets have started to join the registration bandwagon, viewing it as an opportunity to foster closer customer relations and produce additional revenue streams. NewsOK.com, a joint venture of The Daily Oklahoman (207,538 circulation)and KWTV, launched a voluntary registration program on March 17 and got 8,000 people to sign up in the 10 days before it locked down all stories. General manager Kelly Dyer handled e-mail complaints, which amounted to 0.5 percent of those who registered. Site managers settled on a fairly extensive registration form, asking for name, address, e-mail, phone, gender, birthday, income, education, subscription status, Internet connection speed, and hobbies and areas of interest. "Some people who don't have a lot of education were offended, and some people told us we didn't need their birthday, just their year of birth," Dyer said. "We thought it would be nice to e-mail them the front page of the newspaper on their birthday." NewsOK decided to launch registration during March, a high-traffic month because of the NCAA basketball tournament. The site uses contests and games as an incentive to register. The

NewsOK.com

Users accept the three- to four-minute process because they know they'll be getting something of value in return, Fisk said. Belo Interactive tested forms of varying lengths and found that twothird believed the lengthiest form was easy to complete and three-quarters appreciated the lifestyle questions. Most of the feedback took place in the first month after launch, with complaints coming from 2 percent of users who registered. Traffic to the sites dropped off initially but recovered far faster than expected. "Within eight weeks, we were hitting new records of users and page views on the sections that we had walled off," she said.

© 2003 Newspaper Association of America. All rights reserved.

8

digitaledge

site has 181,918 registered users as of October 2003, with a robust opt-in rate of 50 percent for offers from partners or advertisers. Registration helps the site define its audience better for both editors and advertisers, Dyer said. Some 70 percent of the site's registered users live in Oklahoma, an important selling point to advertisers. Requiring an e-mail address lets KWTV News 9 communicate with users during sweeps month. It also gives the Oklahoman a way to do outreach to the 38 percent of users who do not subscribe to the paper. The Bakersfield Californian (65,899 daily print circulation) launched registration on Feb. 1, 2003, and has garnered more than 50,000 registered users to date. "A primary goal was to learn more about our users," said Darrell Kunken, vice president of strategic marketing and interactive media. "We wanted detailed data on the age and income profiles of our users, plus their relationship to our core print product." Morris Digital Works of Augusta, Ga., began to require registration at AugustaChronicle.com, the Web site of Morris Communications Corp.'s flagship newspaper, in July 2003. Like others, it began by putting the registration curtain across the business section and handling customer questions and complaints before rolling it out to other sections. "We didn't want to slam the curtain on the entire site at once, so we started with a small set of users and expanded it in such a way that the load would be consistent," Yelvington said. AugustaChronicle.com generated nearly 22,000 registered users in the first two months after rollout. "We're working from our larger markets down, and we may modify our plan as we roll out," he said. Knight Ridder Digital decided to test its registration rollout at two newspapers to iron out the wrinkles. KansasCity.com (home of the Kansas City Star) was the first to launch, on Oct. 2, 2003, followed by Charlotte.com (home of the

Charlotte Observer) a week later. "We're looking at these two markets as test cases before we extend the concept to our other sites," said Dipik Rai, senior business manager for registration at Knight Ridder Digital. KansasCity.com promoted registration by featuring a contest that offered a year's worth of free groceries from a local supermarket or a paid trip to a Kansas City Chiefs-Denver Broncos football game in Denver. The contest, which included tieins at local sporting events, was an effective way to boost sign-ups for the site and to capture email and postal addresses of local residents, said Anna Zornosa, chief marketing officer at Knight Ridder Digital. Most of the site visitors who registered for access during the contest entry period also participated in the contest.

The Bangor (Maine) Daily News' executives view registration as the first step toward an online subscription model.
Knight Ridder Digital will bring registration to at least seven more markets during the first half of 2004, Zornosa said. Contents will have a promotional role in some of these markets. Smaller papers, too, have begun wading into registration. At the Watertown (S.D.) Public Opinion (evening, 12,798), publisher Mark S. Roby said, "We want to know who the readers of our online product are, hence we require registration to read the locally produced content of PublicOpinion.com." The combination of print subscriber data and demographic data derived from online users offers advertisers a better value proposition. The NH.com network of Web sites, including the Nashua Telegraph, NH Magazine and NH

© 2003 Newspaper Association of America. All rights reserved.

9

digitaledge

Business Review, will integrate a registration component in January/February 2004 for users who click beyond the home page and section fronts. The Bangor (Maine) Daily News (63,611 circulation daily) has collected personal information from 120,000 users since it began to require registration in May 2002. The newspaper has not yet used the registration numbers to try to boost advertising revenues, said Tim Archambault, online services manager and a one-man Web team for the newspaper. Instead, the newspaper's executives view registration as the first step toward an online subscription model. "This gives us a gauge of whether we should charge," he said. "It's going to happen, but we're waiting for a critical mass of newspapers to go that route first." Archambault cautioned newspapers considering registration not to underestimate the customer service commitment that is required. "I talked to someone from Knight Ridder who was two weeks away from launching registration and they

hadn't even thought about the customer service angle," he said. Answering questions from concerned site visitors is "a real time sucker." Expect to spend at least an hour a day responding to people who can't log on or who disabled cookies in their browser. Asking people for personal information on the registration page means they will expect a higher level of customer service, he said. (See Archambault's Digital Edge article on the hassles new media managers should expect to face — www.digitaledge.org/registration.html) Among the most common problems: Some programs that stop pop-up ads also block cookies. WebTV doesn't hold cookies well, and that accounts for 5 to 6 percent of bangornews.com's audience. Internet Explorer's default settings might not accept a cookie from a site it doesn't recognize as a trusted partner. "I also get hate mail from Green Party people who think cookies are something we put on their computer to watch them," Archambault said.

AugustaChronicle.com

© 2003 Newspaper Association of America. All rights reserved.

10

digitaledge

Archambault is thinking of making one change to the paper's system. "We had 5,000 registrations one day because Rush Limbaugh mentioned an article on our site. Those one-time visitors don't do us much good."

He is weighing a change that would let first-time visitors access an article or sample the site; if they come back, they'll face a registration pop-up screen.

Best practices:
•Tell your readers in advance that registration is coming by posting a notice prominently on the home page, written by the site manager, two to four weeks in advance. •Begin with a soft, voluntary registration so that your system is not overwhelmed all at once. •Allow visitors a chance to sample stories on your site before requiring registration. •Don't drive away traffic from search engines and Weblogs by blocking access when someone follows a story link. Forcing one-time visitors to register only pollutes your registration database. •Think carefully before deciding which data points you wish to collect from users. •Commit adequate resources to customer service for the increased workload. •There is no one-size-fits-all formula in deciding the length of a registration form. You're the best judge of how your audience will respond.

Buy or Build? Vendors and Market Size Consideration
Online newspapers considering a registration system have two initial decisions to make: First, do they build it in-house or hire an outside vendor? Second, what do they do with the data once they have it? To date, about nine out of 10 Web content sites with registration systems have built it themselves, according to Dave Morgan, founder of software company Tacoda Systems. Putting up an HTML form or pop-up screen to collect user data is the easiest part of the process. The more challenging issue is how to parse, analyze and take advantage of the information once it's captured. There are other factors to consider as well: whether to hire a vendor to handle e-mail newsletters and marketing messages, whether to sign on with another vendor to deliver targeted ads. USAToday.com built its registration system inhouse by employing the same technology used for its advertisers' interstitial pop-ups. SignOnSanDiego.com built its registration system in-house by using Zope, an open-source application server from Zope Corp. in Fredericksburg, Va. Tribune Interactive developed its system internally and hired Exterion for its ad mail program. NewsOK.com built most of its system in-house and hired Ion Technologies of Dublin, Ireland, "for less than $10,000" for its email tracking software, said general manager Dyer.

© 2003 Newspaper Association of America. All rights reserved.

11

digitaledge

While this report cannot detail all the different vendors that serve online newspapers' audience management needs, here's a quick rundown of some of the key players: •Tacoda Systems, New York: By tracking users' surfing patterns and mapping that against registration data, clients can serve targeted advertising or customized content to individuals. Tacoda also offers analytical tools that let clients know which customers are visiting which sections of their sites. Clients of Tacoda's audience management software include eight of the nation's largest newspaper companies. The Richmond Times-Dispatch and Tampa Bay Online use its new registration software. •Nando Media, Raleigh, N.C.: The online unit of The McClatchy Co. in Sacramento, Calif., offers a turnkey online registration system that allows for password protection of Web pages and sites and for the collection of users' demographic profiles and site behavior. Clients include the Star Tribune in Minneapolis and The Bakersfield Californian. •TownNews, Moline, Ill.: Focusing chiefly on smaller markets, the company offers registration as part of an overall content management system. Clients include the Watertown (S.D.) Public Opinion and the Carroll County (Md.) Times. •Clickshare Service Corp., Williamstown, Mass.: Clickshare offers registration authentication services and electronic transaction billing. Visitors who register on the site of a Clickshare client are automatically recognized by other site's within Clickshare's network. Clients include The Daily Hampshire Gazette (Northampton, Mass.), Erie (Pa.) Times-News, Foster's Daily Democrat (Dover, NH). •eMeta Corp., New York: The digital asset management software provider focuses chiefly on subscription- and transaction-based sites (such as access to NYTimes.com's archives), but it

also can manage registration. Knight Ridder contracted with eMeta to provide access control for its new registration systems at KansasCity.com and Charlotte.com. Other clients include NYTimes.com, TheStreet.com, FT.com. •mass2one, Hiawatha, Iowa: Founded in 2000, this startup focuses chiefly on permission-based e-mail marketing. Its audience management offerings include a registration component.

Sorting Out the Contenders
Registration data alone won't get you to the promised land. But it can be an invaluable source of insight into your customers when combined with behavioral tracking and offline databases.

"The reality is that in a business sense, we're not interested in transient traffic from out of market." — Steve Yelvington, Morris Digital Works
"The one thing I fret about is that as an industry we're operating without enough solid data on who our customers are, and registration alone won't get you there," Morris's Yelvington said. "It's important to keep in mind that registration provides a picture of the people who've filled out forms, and it's not a picture of the people who actively use your site." To Yelvington, a one-time visitor from out of state has little value to AugustaChronicle.com. "The reality is that in a business sense, we're not interested in transient traffic from out of market. In fact, we'd be fine if it went away. It's not germane to our site objectives."

© 2003 Newspaper Association of America. All rights reserved.

12

digitaledge

Instead, Yelvington is interested in learning as much as he can about loyal customers. "One of the key issues we have to confront in this industry is not only the total reach of our product but the frequency of use of our products," he said. "Monthly visitors are a different audience than daily or weekly visitors." To identify active users and what they're doing online, several newspaper companies have turned to outsourcing solutions from startup companies that offer behavioral and usage analysis tools that offer rich demographic insights about news site audiences when combined with registration data. To date, Tacoda Systems has been one of the most aggressive audience-profiling evangelists. CEO Morgan said that publishers often initially approach online registration from a product-centric viewpoint. "They'll say, I want to control access to my valuable content," he said. "Our view is that in an online world, the core asset of media publishers is their audience, not their content."

ics capabilities to its e-mail communications with readers. "By tying their systems together, they were the first online newspaper to do what I would call audience management," Morgan said. Partly as an outgrowth of that effort, Morgan founded Tacoda in 2001 as a way for newspapers to interact with their audiences. Clients of its audience management system include Advance Internet, Belo Interactive, the Chicago SunTimes, Landmark Communications (for The Weather Channel), McClatchy, Media General, Tribune Interactive and USAToday.com. The system tracks individual users' surfing pattern as a way to tell clients which pages and ads the visitor saw, how often he or she visits, as well as other data. That information can be used by clients in two ways: •To serve targeted advertising — for example, by identifying those who viewed sports or automotive content on a previous visit; •For analysis, offering answers to questions such as: do people who visit the travel section also like local news? In one case, Belo Interactive's DallasNews.com used Tacoda's audience targeting to serve ads for a Mitsubishi dealer to visitors who are currently browsing the site's auto section, and to anyone who had visited the section in the previous 30 days. The result was a click-through rate of 7.7 percent and a 100 percent increase in credit applications. Forty-four percent of all phone calls to the dealership were attributed to the online campaign, even though eight promotions were running in other media. While some user predilections and demographic data can be inferred by tracking surfing habits, combining it with registration data — from the site's own registration system or Tacoda's new registration offering — adds greater depth and accuracy.

From the start, NYTimes.com tied its registration system to a real-time ad server and added analytics capabilities to its email communications with readers.
Through Tacoda's products, clients can learn how often visitors interact with ads, their loyalty in returning to the site, and whether the company has sold them an online or print subscription. "It's less about 'How are we managing the delivery of this online product?' and it's more about 'How are we managing this online relationship?' " he said. NYTimes.com hired Morgan's former startup, Real Media, in 1996 to help build its infrastructure. From the start, the Times tied its registration system to a real-time ad server and added analyt-

© 2003 Newspaper Association of America. All rights reserved.

13

digitaledge

"You can do Tacoda without registration, but you're only looking at the size of the audience and mapping that to behaviors, and you don't know anything about the demographics of the readers," Yelvington of Morris said. "You don't get the full bang for the buck until you wire the two together." Fisk of Belo Interactive added, "We've overlaid our database with Tacoda behavioral tracking on top of our registration information, so now I can track the visitation patterns of users on our site. We know not just where they're going but which audience segments are going there." Recognizing that behavioral tracking and registration data go hand in hand, Tacoda added a registration component to its audience management system in April 2003. Media General has deployed it across its network of 17 newspapers and broadcast Web sites, including the Richmond Times-Dispatch and Tampa Bay Online, and The Toronto Star is currently installing Tacoda's audience registration system, Morgan said. Pricing of Tacoda's audience management system varies depending on the side of the media company's audience. An enterprise software license costs $200,000 to $600,000 up front with a 20 percent annual fee for maintenance and support; its ASP (application service provider) product, hosted by Tacoda, costs $100,000 to $300,000. The registration system costs $150,000 to $250,000 up front as a stand-alone product. Tacoda's audience management system can hold hundreds of data points on each person, culled from different sources. One of its key selling points is the ability to dynamically deliver different registration questions to different people, Morgan said. AMS can dynamically deliver registration questions with registration systems other than Tacoda's, assuming that they support incremental registration (the ability to add one data point at a time on a dynamic basis), but it works best with Tacoda's registration system because of tight integration, he added.

Morgan said that by allowing clients to change registration data points on the fly, "a newspaper site could say, 'A local automobile dealership wants to do a big program to target prospective SUV buyers by identifying households with children. We don't want to ask all of our registered users for that, so we'll only ask people in certain ZIP codes or with certain characteristics, and we can build a campaign around those profiles.' Presence of children in a household is really important to auto dealers and grocery stores." Asking for an e-mail address should be a key component of almost any registration system, Morgan said. "It may be intrusive, but it's payment for the content," he said. An e-mail address

Asking for an e-mail address should be a key component of almost any registration system.

lets publishers ask users to opt in for commercial e-mail offers. Forty percent of site registrants typically say yes. Collection of the e-mail address allows the site to contact the user for customer support issues, polls and other reasons. It gives publishers the ability to match customer information against print subscription databases that contain e-mail addresses. And it establishes a higher level of loyalty and commitment, often leading to more frequent visits to the site. Publishers often underestimate the revenue potential of commercial opt-in e-mail, Morgan said. The Dallas Morning News generated more than $1 million in e-mail revenue in the first year after registration. Tribune Interactive saw more than $300,000 in incremental ad revenue in the year after it launched registration in Los Angeles and Chicago.

© 2003 Newspaper Association of America. All rights reserved.

14

digitaledge

"We believe this will be an important way for media companies to become the trusted partner of the consumer," Morgan said. The initiative is scheduled to go live within a year. Targeting Mid-Size Markets Nando Media, the technology arm of McClatchy, has become a leading vendor of registration and subscription services. Product manager Norm Cloutier outlined several approaches newspapers could take when registering users: an incentive-based rewards program, vertical silos that require registration for one area of a site, a process that allows access only to print subscribers, a mixed lockdown featuring varying levels of access for those who register or subscribe, and a threshold approach that requires registration after a user visits a certain number of pages. Since August 2002, Nando has rolled out its InSite registration product at the Star Tribune and The Bakersfield Californian, as well as subscription and fee-based services at other sites. Bakersfield.com introduced a fairly short registration form in January 2003. "We told site users that registration was coming for over 30 days prior to launching it to warm them up to the idea," said Darrell Kunken, vice president of marketing and new media. Bakersfield was able to marry online registration data with Experian market data, U.S. postal addresses and other customer files to create an impressive database of user profiles. The depth of the online data gave local advertisers a chance to see what types of consumers were visiting the site. The detailed customer information persuaded a local Ford dealership to triple its advertising spending instead of canceling for the year.

startribune.com

Currently no site allows readers to opt out of targeted online display ads. "Publishers recognize that if all you have to sell is undifferentiated eyeballs, there is no profitable business model for free content," Morgan said. But if users can't control the ads served to them, they can have a voice in the personal information publishers keep on file. Morgan said trust and personal privacy are "a huge wildcard" in the registration process. As a result, Tacoda has devised a privacy management application that will soon let users log into a media site to see what personal information is being stored about them.

© 2003 Newspaper Association of America. All rights reserved.

15

digitaledge

mail efforts. "The most effective advertising is both relevant and requested by the consumer," said Nick Rogosienski vice president, interactive and direct marketing. "Our members indicate their interest by categories, and we make it easy for them to change their preferences when desired. Because the advertising information is coming from startribune.com at their request, it has the credibility and legitimacy that is lacking in the unsolicited e-mail communications so prevalent today." When registering or updating their accounts, members of startribune.com can elect to receive newsletters g e n erated by s t a r t r i bune.com staff and advertisers' offers via e-mail. McClatchy will also likely add Nando's InSite registration to its Sacramento Bee, Anchorage Daily News and Tacoma News Tribune Web sites toward the end of 2003 and into 2004, said Kathy Ives, sales and marketing manager for Nando Media. Catering to the Smaller Markets Software costs and the resources required to analyze the data and respond to customer questions make it clear that registration may be difficult to implement at some newspapers. Tim Archambault of the Bangor (Maine) Daily News

Carrollcountytimes.com

In Minneapolis, which launched registration May 27, 2003, visitors can view the home page and one story without having to register. Startribune.com was among the first newspaper sites to put registration in front of its classified section and among the first to get sponsors for opt-in marketing messages in such categories as travel, finance, automotive and entertainment. People who register for a category receive an email under the startribune.com brand that contains the solo offer from the category's sponsor. The use of category sponsorship also has allowed startribune.com to begin immediately generating revenue from the registration process. An innovator in direct marketing, The Star Tribune takes an integrated approach to its traditional mail and e-

© 2003 Newspaper Association of America. All rights reserved.

16

digitaledge

had this word of warning for mid-size and smaller papers considering registration: "If you're not going to do it to make money, then don't do it because the time commitment is huge. It's yet to be seen if smaller markets have much to gain from it." He said that online papers like DallasNews.com stand to gain from registration, but smaller papers face a much more difficult challenge. When segmenting 120,000 bangornews.com registered users, Archambault can only deliver a few hundred readers to any given advertiser. "The possibilities are not as exciting," he says. TownNews of Moline, Ill., caters to mostly small and mid-size newspaper companies by offering registration as part of an overall content management system. The company, 80 percent owned by Lee Enterprises, hosts more than 800 newspaper sites on its server farm. CEO Marc Wilson said online newspapers work with TownNews for user access control during registration, subscription services, archives payments and e-commerce. "We typically serve smaller papers and the demand for registration is smaller there because they're understaffed and overworked and they don't need extra projects," Wilson said. "I tell publishers, unless you have a plan for how you want to use the data, don't do it. Don't annoy your customers unless you commit the staff and the time to analyze the information you've gathered." TownNews typically charges a $100 setup fee and $75 per month to run its registration software. The company doesn't provide analysis of registration data or site traffic, but does allow Web managers to view data in Microsoft Access or Excel spreadsheets so they can analyze the level of interest in a story or section by audience segment, Wilson said. Two papers that are making use of registration data are the Watertown (S.D.) Public Opinion and

the Carroll County Times in Westminster, Md., he said. The Public Opinion has been using TownNews since July 2002 to sign up its 8,814 registered users. Registered users may access the site's local news, sports, obituaries and archives. The Carroll County Times (morning, 24,203) uses registration to gauge who is reading the paper online instead of in print. "Then they can go to an advertiser and say, 'We have x number of print readers and y number of Web readers who live within a half hour of your store. Here's a joint print-Web campaign that makes sense for you,' " Wilson said. Some 11,000 people have registered at carrollcounty.com since registration took effect in July. "We initiated this to begin to let our online users realize that information on our Web site is unique and is not totally free," said publisher Robin Saul. "Long term, we would like to establish a feebased access, one that's free to our newspaper subscribers." A third paper, the Somerset (Pa.) Daily American, abandoned a paid subscription model in May in favor of one that entices readers with free news content for all readers and access to the entire site, including obituaries and other popular sections, for print subscribers (about 14,000) and online-only subscribers (more than 100). The database of 14,000-plus registered users may eventually be used to solicit additional advertising. One little-noticed advantage of registration, Wilson said, is that after someone fills out the registration form, a newspaper has 90 days to solicit a subscription without violating federal do-not-call regulations. One strategy at Lee Enterprises is to offer a free two-week subscription in return for providing registration data, he added.

© 2003 Newspaper Association of America. All rights reserved.

17

digitaledge

Looking ahead, Wilson foresees greater use of registration data in newspapers' Web advertising campaigns. "We believe that the online newspaper is often the No. 1 electronic local medium in a trade area, with the online news site being read by as many people as are listening to the local radio station or watching local TV stations," he said. "Registration data about your local readers gives you a leg up when competing for ad dollars." Other Registration Options Two newspaper companies have begun to offer registration technology to other media companies as a commercial product.

Belo Interactive is in discussions with another company about deploying its registration and customer service solutions externally. And Morris Digital Works developed a "registration lite" system that it rolled out Oct. 9, 2003, to control reader access to the Web site of The Post and Courier in Charleston, S.C. The newspaper is owned by the Evening Post Publishing Co. That registration solution will likely be offered to others as a commercial product, Yelvington said, while a more far-reaching unified publishing system across the Morris network will remain internal for the foreseeable future.

Best practices:
•Registration does not make sense in all markets. Identify the tangible benefits you hope to realize and weigh the advantages and disadvantages before making the leap. •Don't follow the registration herd — especially if you're in a smaller market — unless you have the resources to analyze and act on the data you gather. •Consider flexibility before committing to a particular registration system. •Overlaying behavior tracking with registration data can provide a powerful means of learning the nature of your online readership.

© 2003 Newspaper Association of America. All rights reserved.

18

digitaledge

The Impact of Registration on Revenue
In a medium where profitability remains elusive for many content sites, registration offers a welcome path to new revenue streams, particularly from e-mail marketing and targeted advertising. Instead of approaching advertisers with the fuzzy math of anonymous users and page views, sales reps can use registration data to discuss their customers in demographic terms that advertisers can appreciate. "We had reached the point where it was becoming clear that simply having a large volume of anonymous visitors wasn't very valuable," said Elaine Zinngrabe of latimes.com. "We wanted to have the ability to offer targeted advertising, and to generally know more about who was coming to the site in order to make decisions about what to offer our users." By combining registration data with traffic analysis, latimes.com learned that 35 percent of its readers live in its core Southern California market. Registration has been particularly beneficial to latimes.com's ad mail program, says Donna Stokley, director of online advertising sales, West Coast and latimes.com, Tribune Interactive. Users who register provide e-mail addresses, ZIP code, age and income, and they automatically agree to accept ad messages under the strictures set down by Tribune Interactive. "We can parse any of these fields and go out to our advertisers," she said. "For us, ad mail has generated a whole new revenue stream." Latimes.com sent out an e-mail offer on behalf of the agency sponsoring the theatrical show "The Producers" to women in the greater Los Angeles area between ages 25 and 54 who earn more than $50,000. The special offer for a dinner and show was opened by 24 percent of recipients, and 61 percent of them clicked through to purchase tickets, Stokley said. Latimes.com also recently sent out an e-mail ad message promoting water conservation on behalf of the Metropolitan Water District. The site was able to send it only to users ages 35 to 64 with higher incomes in the Los Angeles DMA. Another e-mail message targeted Los Angeles residents on behalf of vegas.com, a portal for Las Vegas hotels and shows. A fourth ad mail, bought by the San Luis Obispo Tourism Board, targeted Southern California women to visit the Central California coast. The advertisers craft the body of such e-mail messages, while latimes.com handles the distribution and inserts a tagline at the bottom with contact information and removal instrutions. "The CPMs are much higher than you sell a banner for," Stokley said, "yet for the advertiser it's more cost-effective than purchasing a solo mailer themselves."

"It was becoming clear that simply having a large volume of anonymous visitors wasn't very valuable." — Elaine Zinngrabe, latimes.com
Online display ad targeting, made possible through registration, has also enhanced site revenues, Stokley said. An airline wanted to advertise additional flights to the South and was able to target readers in Southern California. Registration enabled the site to serve ads only to latimes.com readers who live in Southern California rather than the two-thirds of readers to whom the ad would serve no benefit, Stokley said.

© 2003 Newspaper Association of America. All rights reserved.

19

digitaledge

At ChicagoTribune.com, another Tribune Interactive site, Rebecca Baldwin said registration has led to several advertising success stories. In June 2003, a targeted ad campaign on the site resulted in significantly higher sales of pianos. Similarly, a continuing education program using targeted ads proved so successful that it crashed the client's servers, Baldwin said. "The e-mail programs that have proven most successful have been those that offer a benefit to the user, such as discounts to a show coming to town," she said. Lifestyle promotions, such as gift certificates to a day spa, have been particularly successful. Baldwin acknowledged that Tribune Interactive has been criticized for its "interesting and controversial way" in which readers are forced to accept marketing promotions as a condition of registration. There is no way to opt out of e-mail marketing from Tribune and its partners during the registration process — other than to not register. Baldwin said fewer than 2 percent of registered users have lodged complains, and "the rate has been so small it hasn't forced us to change the policy." For USAToday.com, registration opened up entirely new advertising opportunities. The site's readership skews 75 percent male and 25 percent female, similar to USA Today's print readership. The newspaper depends heavily on business travelers. "Because we were so heavily skewed male, in the past we had a tough time getting ad dollars from advertisers looking for a female audience," said Susan Lavington, director of marketing at USAToday.com. "Today we're going back to those same advertisers and saying, 'Now we can serve your ads only to women.' " Based on both registration data and behavioral tracking information, USAToday.com sales reps are approaching Ford, Chrysler and other auto manufacturers and telling them they can target ads at any user who read a car review in the past 30 days along with their location, age and gender.

"These new programs have been enormously well received by advertisers," Lavington said. Tacoda software tracks the surfing behavior of USAToday.com users and drops a cookie on them when they visit section fronts and other pages. Tacoda is also the engine that serves them the targeted ads. Using gender, age, ZIP code and household income together with behavioral activity on the site, USAToday.com created seven prepackaged segments of its most valuable readers: E-fluentials (people who've read a tech review in the past 30 days), Lookers and Bookers (readers who visited the travel section in the past 30 days), Bulls and Bears (self-directed investors), Armchair Athletes (male sports fans), Tire-Kickers (auto buyers) and two demographic categories based on self-reported data: women and affluent households.

Latimes.com e-mail ad message

E l s e w h e r e , Wa s h i n g t o n p o s t . N e w s w e e k Interactive would not release the specifics of company revenue related to registration. "In general, we have seen strong advertiser demand for targeting based on our registration data, and we are able to charge a premium for such cam-

© 2003 Newspaper Association of America. All rights reserved.

20

digitaledge

paigns," said spokesman George Nolan. "Without question, registration has had a positive impact on company revenues." Two Big Success Stories Executives from several other newspaper companies said it's hard to identify precise revenue increases attributable to registration, but that registration has proved to be a key factor in their robust online revenues. Heading the list of those success stories are two registration pioneers, The New York Times on the Web and Belo Interactive. NYTimes.com credits targeted advertising, based on registration data it has collected since 1996, as a primary driver of its continued profitability. "For years we were the only significant place around that gave advertisers the ability to target users based on their registration data," said Deputy General Manager Stephen Newman. Registration data gives the Times increased flexibility in how it delivers targeted ads (http://www.nytimes.com/adinfo/web_targeting.html). An advertiser might come to the paper with a request to reach online readers in certain ZIP codes. A financial company might want to limit an advertising campaign to the New York area, or a clothing retailer might want to target women under age 35. NYTimes.com can target not only by demographic data but by behavior on the site. The Times has identified a half-dozen groups that advertisers may choose to target in such categories as business, health, retail and travel. For example, the site looks at users who frequently visit the health section, an attractive audience for pharmaceutical advertisers, Newman said. An advertiser may want to create a campaign via a health-related e-mail newsletter or initiate a Surround Session campaign on the site. Surround Sessions allows an advertiser to serve a series of ads to a user as he or she steps through the site from page to page or section to section,

NYTimes.com ticketwatch

with a maximum of five pages. Users can be targeted based on the pages they've visited in the past. "An advertiser could hit people who fit a certain profile if they've visited the health section, so the next time they visit they may see a series of ads regardless of where they start on the site," Newman said. Recent Surround Session advertisers include American Airlines, Audi, FedEx, IBM, Porsche, Verizon and Visa. "Because it is a gateway that everyone must pass through, registration has become an amazing way to build e-mail lists and promote new products," Newman said. The site's Today's Headlines newsletter has nearly 4 million subscribers, and "registration has played a big part in building that." Registration has also inspired a number of e-mail marketing promotions. The producers of the musical "Chicago," for example, may offer price discounts to upcoming shows in the Times' TicketWatch e-mail, which goes out to more than 350,000 subscribers. A cruise line may offer specials in a travel newsletter that has close to 500,000 subscribers.

© 2003 Newspaper Association of America. All rights reserved.

21

digitaledge

In some targeted ad campaigns on the Belo sites, behavioral campaigns directed at specific audience groups outperformed ROS ad campaigns by a four-to-one ratio. But the most tangible benefit of registration has come in the form of e-mail marketing, which opened up a new revenue stream for the 24 Belo Interactive sites. During registration, users are asked a series of questions about their hobbies and interests, as well as whether they would like to receive offers related to the subjects they listed. Some 30 percent of registered users — more than 1.1 million people — have agreed to receive MySpecialsDirect, a permission-based e-mail product. Under the program, Belo's sales staff approaches advertisers with a proposal to target segments of the readership. "We'll say, we have 150,000 people who are interested in travel. Would you like to send them a deal or coupon or discount in connection with your message?" Fisk said. The program has been "wildly successful," she said. Some mailings led to open rates as high as 92 percent and click-through rates as impressive as 32 percent. AT&T Broadband did a campaign through My Specials Direct for high-speed cable Internet. In one mailing they generated more than 1,300 new customers. While Belo won't turn over its registrants' e-mails to an advertising partner, it does allow cable companies to target users in specific neighborhoods where they are rolling out new services. In another campaign, the Dallas Symphony targeted users who said they were interested in music and entertainment and had a higher than average income level. Some 45 percent of the people who received the e-mail offer bought a ticket to the symphony. "We've become really good at targeting specific audiences to specific advertisers," Fisk said. "We delivered a perfect audience for the Dallas

MySpecialsDirect

New York Times Digital's advertising revenue during the third quarter of 2003 increased 25 percent compared with the same period in 2002. Advertising revenue for the first nine months of 2003 improved 29 percent. Total revenue climbed to $21.8 million during the third quarter (+19.7 percent), and year-to-date revenue grew to $63 million (+20.9 percent). (The Times does not break out revenue by Web site, so these figures are for NYTimes.com, Boston.com and an archive distribution business.) Belo Interactive has also reaped the whirlwind of registration. Dave Morgan of Tacoda Systems said, "Belo probably has the most successful implementation of any registration system in the world." While ad sales have increased dramatically quarter after quarter, Linda Fisk said it's difficult to determine how much of that success can be attributed to registration data. "The sales force appreciates being able to talk to advertisers in a more sophisticated way about our audience and the people viewing their advertising," she said.

© 2003 Newspaper Association of America. All rights reserved.

22

digitaledge

Symphony. The effectiveness rate of our e-mail campaigns has been just amazing." The e-mail categories with the highest level of interest so far have been entertainment and movies, sports, music, travel and cooking, Fisk said. Jumping on the Revenue Bandwagon Given the revenue gains that some sites have seen as a result of registration, other newspaper companies are following close behind. Cox Newspapers plans to introduce registration at its network of online properties beginning in the first quarter of 2004 with the Austin American-Statesman, to be followed by AJC.com (the Atlanta Journal-Constitution site). And if imitation is the sincerest form of flattery, Belo should be mighty flattered. Cox is asking users to supply a name, phone, address, e-mail, gender, birth date and 10 areas of interest. "We've had consultations with Dallas and decided to follow their lead in taking a more aggressive approach," said Michael Parker, vice president of Internet strategy and solutions, Cox Newspapers. "We see a big opportunity for moving into targeted advertising and developing new products based on interests from our online users." Azcentral.com has been profitable for two years, said Mike Coleman, but registration gave the site a way to stabilize retail revenues by serving ads more effectively. "A client can now come to us and say, 'I'm opening a new women's health club on the west side of Phoenix and want to reach females 35 or older in these 20 ZIP codes,' and we'll be able to deliver that audience," he said. In San Diego, Chris Jennewein said he welcomes targeted advertising but cautions, "the local advertisers haven't been clamoring for that." He said local merchants are interested in broad exposure and, while they may market more heavily to

a young demographic, "ultimately they want everyone to come into their store. One of our customers is a pest control company and it's hard to see how targeting would help his business." Site managers decided not to merge SignOnSanDiego.com's new registration database with its existing e-mail newsletter database, which contains 200,000 subscribers. "With registration we're registering computers, and with email we're tracking individuals," Jennewein said. "A person might be comfortable giving out an email address in return for receiving a newsletter or even e-mail from third parties, but he might be uncomfortable with an expansion of that if his browser is targeted." As one indication of readers' privacy concerns, Jennewein and others cited the preponderance of registered users who live in the 90210 ZIP code or at 1600 Pennsylvania Avenue. Morris Digital Works' Yelvington said registration also opens the door to other revenue streams such as persistent search. A user who registers can enter a keyword in a Morris paper's classified and display advertising database and will be alerted by e-mail when the item becomes available. "If someone is looking at used cars in the online classifieds, they're probably looking to buy a car," Yelvington said. "If I can cross-reference that with demographic information, then I can find 25- to 34-year-old female car seekers who live in the 30809 ZIP code. Now I've got an interesting proposition for a car dealer, if I can use that information to target an ad to that and only that audience."

© 2003 Newspaper Association of America. All rights reserved.

23

digitaledge

Best practices: •Gathering registration data such as age, income and field of employment allows you to target readers who permit e-mail advertising offers. Such ready-made demographic groupings are especially appealing to advertisers. •Offer readers tailored ad messages that carry a tangible benefit or reward. •Turn a potential negative (only 25 percent of your site's readers are women) into a strength (you can limit your ad campaign only to them) by demonstrating the ability to successfully target such groups. •Nothing succeeds like success. Gather success stories from a targeted marketing campaign to entice future advertisers.

Benefits to the Newspaper Enterprise Beyond Advertising
Knowing your audience and increasing revenues are the twin driving forces behind registration for many Web managers. Many other benefits can also be realized from the wealth of customer data provided from registration databases. Chief among them: product development, especially new e-mail offerings and Web site functionality; editorial programs, both online and in print; more opportunities to upsell the print product to online users; and better customer service. Kelly Dyer, general manager of NewsOK.com, offered yet another potential benefit: Through the collection of e-mail addresses, phone numbers and ZIP codes from users, "our staff will be able to e-mail people from all over the area for trend stories we're reporting. And when a breaking story occurs, we'll have an available pool of people available, zone by zone, and we can ask them if they want to comment." At Advance Internet sites such as MLive.com in Michigan, registration goes hand in hand with the "hyperlocal content that is the primary strength" of the sites, said president Jeff Jarvis. In addition to targeted advertising, registration allows the editors to segment the audience geographically "to automatically serve our deep local content and advertising to users in each market. " Michael Q. Parker at Cox Newspapers named three areas outside of advertising in which the company believes it can capitalize on registration data: "In editorial, registration gives us the ability to see what our audience is interested in and allows us to devote resources to those interests, whether it's a new gardening section or a gardening email," Parker said. "Likewise, we see the data providing us with a pool of people we can draw upon for marketing research when we do usability studies. For example, we might send them prototypes of a new gardening section. And from a circulation standpoint, it can help us better understand the relationship between our print and online audiences." At the New York Times on the Web, registration has always informed online product initiatives, said Stephen Newman. That comes in handy when building out enhanced content that targets men or women in a certain industry.

© 2003 Newspaper Association of America. All rights reserved.

24

digitaledge

"As we build out our new movies vertical, movies@NYTimes.com, we make decisions about where to take it based on what we know about the profile of our movies audience — are they higher income, do they skew male or female, how are they dispersed geographically?" he said. Barbara Rice, New York Times Digital's group director of research, told me in 2002: "The data helps inform content decisions, such as whether to add to the current stew of video and audio on the site, which now includes a photographers journal, cooking demos, movie clips, audio reports from baseball beat reporters and other features. We're examining the resources we want to commit to multimedia, so this morning we pulled registration data on which audiences are the most loyal users of multimedia. The editorial side likes to know who's reading what articles and packages. Are stories being read by a New York City audience or international audience?" Several newspapers are using registration data about customers' media habits to try to lure new subscribers. The Dallas Morning News delivers targeted home-delivery offers to DallasNews.com visitors in the distribution area who don't subscribe to the paper. One e-mail campaign targeted 130,000 non-newspaper subscribers. Twenty-four percent of the delivered messages were opened by recipients, and the paper gained 44 subscribers, Linda Fisk said. Belo Interactive maximizes the ability to test different marketing messages with its e-mail campaigns. In July 2003, the company created three distinct messages for MySpecialsDirect subscribers in The Dallas Morning News circulation area. The e-mail recipients, none of which had a home-delivery subscription, were split into three groups of about 55,000 each, Fisk said. Within 24 hours, 45 people accepted a 12-month print subscription, 14 took the 24-month offer, and six signed up for the 36-month offer. The campaign led to 108 new subscriptions. Belo Interactive does not charge The Dallas Morning News to deliver messages to MySpecialsDirect subscribers.

NYTimes.com movies

Yelvington of Digital Morris Works also mentioned registration as an invaluable tool in marketing the print product to non-subscribers. "One of our key objectives with registration is developing a coherent view of who our customers are that will help us not only know the difference between online and offline users but hopefully to convert online users into offline users. This is potentially a great boon to newspaper circulation departments." Belo Interactive executives see registration as the starting point that informs personalization efforts and other content initiatives. Khou.com, one of Belo Interactive TV station sites, will be among the first to introduce the initiatives. "We're rolling out additional personalization features that allows people to choose the type size and color palette," Fisk said. "Soon they'll be able to tell us the kinds of information they want to see highlighted on the home page." Those personalization preferences are tied to the user's registration profile. The Belo sites' use of 16 hobby and lifestylebased questions in the registration process helped the product development team determine which areas to devote more resources to, Fisk said. "We found out through registration that we have a great number of automobile buffs. We initially thought that having an automotive classified

© 2003 Newspaper Association of America. All rights reserved.

25

digitaledge

one of our sites has a relevant, valuable experience," Fisk said. "The best way to do that is to tailor their experience to them. And the Internet is the only medium that can really do that. No other media can match its relevance, immediacy and personalization." Parker of Cox Newspapers said he'll be interested to see the level of reader interest in customized content. "I'm not sure how much the audience wants a more refined personalization of the product," he said. "If people say they're very interested in these subjects and would like customization not only of the content but of delivery times for newsletter e-mails, that's something we'll be watching." Morris' Yelvington said that one overarching benefit of registration will be the tying together of disparate customer databases inside a newspaper company. Currently, the registration system for AugustaChronicle.com is not integrated with the access control system for its archive product, AugustaArchives.com. "Our vision is for one account for all services in a given market. We want to have one view of the customer," he said. "Right now our reality is a little different from that."

DallasNews.com autos

section would suffice, but a lot of readers love digging into content about cars, and so we added a number of columns and built out the automotive section pretty dramatically." Registration also gives Belo's content teams a better idea of what users care about so that e-mail newsletters can be tailored to their interests, she said. "We really believe deeply in the idea of a customizable and personalized Web site experience, and we're trying to ensure that everyone who uses

Best practices: •Registration gives newspapers an opportunity to capture a subscriber relationship. An e-mail address can be a powerful tool. •If local news is a strong component of your site, registration permits the delivery of more "hyperlocal" content online. •Solicit registered users' input on prototypes of a new section, a site redesign or a newsletter that's still being formulated. •Registration enhances the ability of a news site to offer more relevant, personalized material.

© 2003 Newspaper Association of America. All rights reserved.

26

digitaledge

The Legal Arena: Proceed with Caution
When online managers weigh the ramifications of registration, few realize the plethora of legal and regulatory issues that it presents. Privacy, confidentiality of personal data, spam and permission-based marketing all fall under the heading of: Proceed with caution. "We are facing a whole new set of legal issues related to data collection," said Elaine Zinngrabe of latimes.com. "I wouldn't say this is a downside, so much as something to keep on top of. At a newspaper there are a lot of points of consumer data collection, and it's important to keeping track of what promises were made when different pieces were collected. It gets complex." Managers of online news departments should be aware that collecting customers' private, identifiable data as part of a registration system can open up a host of legal issues, according to D. Reed Freeman Jr., a partner in the firm of Collier Shannon Scott PLLC in Washington, D.C., and a leading expert in the field. "My single most important piece of advice is for companies to think broadly and develop a registration system that lets you set your own ground rules and gives you wide latitude," Freeman said. While there are no laws that govern how registration must be done, a news site must abide by the rules it sets down. A publisher wants to obtain the broadest possible array of contractual rights "that you feel comfortable asking for," Freeman said. The responses should be gathered at the time of registration. Experience shows that publishers are much more likely to get customers to accede to the site's request up front rather than circling back later to ask for permission, he said. Generally speaking, details that determine how the publisher may use customer data to market or sell products or to share with advertising partners are established in the site's privacy policy. Freeman said a link to the policy should be prominently displayed on the site's home page and on the registration page in close proximity to the user's email address, if that is part of the registration form. "Newspapers need to think about several things," said Freeman, who specializes in privacy and information security. "Are we going to allow our advertisers to learn anything about the success of their online or e-mail campaigns? Are we going to use cookies or Web bugs on our site? Are we going to allow a partner to run a campaign for us? You want to figure out who's going to get the information, how each party will use it, and you want to disclose all that." For some choices, the smart thing to do is to ask the customer for opt-in permission. "The world is moving to opt in, both from a marketplace and legislative standpoint," he said. "If you want to send newsletters or e-mail marketing messages, you'll want to have them opt in." The Tribune Co. has been the target of some criticism for not allowing users to opt out of online advertising or marketing messages when they register at sites such as chicagotribune.com and latimes.com. Freeman wouldn't comment on the wisdom of that approach but said that not giving users the opportunity to opt out could have legal ramifications if not done carefully. He noted that two new anti-spam laws in California could open news sites up to legal exposure if the user does not provide informed consent. Under the e-mail marketing law, SB 186, a newspaper that sends out an e-mail newsletter must receive the user's consent not only for the newsletter but for any advertising in it as well. "The law suggests that the advertiser needs permission to be included in the e-mail," Freeman said.

© 2003 Newspaper Association of America. All rights reserved.

27

digitaledge

"Registration systems need to be rebuilt to comply with that requirement." The second law, SB 27, says that if a company is going to share its customers' personal information with other organizations for direct marketing purposes, the company that owns the names has to tell requesting consumers what the information was and with whom it was shared. Class-action attorneys looking for an inviting target may eye a media company that runs afoul of these new laws, Freeman said. "California's laws are far and away the most aggressive right now," he said. Federal legislation to reduce spam is expected to preempt existing laws and California's SB 186, which would take effect on January 1, 2004. The CAN-SPAM Act of 2003, passed by the House and Senate in December 2003, requires that bulk e-mail senders integrate "opt-out" features within the text of commercial messages, identify the mail as a commercial message and label all sexually oriented messages. Of great importance to publishers, a provision of the CAN-SPAM Act allows companies that have an existing relationship with consumers to continue to deliver messages. Recipients can request to be dropped from the mailing list. Spammers can face millions of dollars in fines. In addition to the new e-mail regulations, publishers should create policies about cookies, the well-known tiny data files that recognize a returning customer, and Web bugs, which range from the benign to the pernicious. Newspaper companies such as Belo Interactive and Tribune Interactive use Web bugs to track how many users open a marketing e-mail and click through a link, while vendors such as Tacoda use tracking technologies to observe a user's behavior from page to page. Freeman said Web bugs can be useful as long as their use complies with the guidelines set down

by the Network Advertising Initiative, a self-regulating body of online publishers. He said publishers that adhere to the rules set down at the (http://www.networkadvertising.org/) NAI site will steer clear of trouble.

A link to the Web site's privacy policy should be prominently displayed on the home page and on the registration page.

Solicitous customer service is another way to head off problems, he said. "Regulators don't come up with cases to bring out of thin air. They monitor complaints, and [publishers'] customer service [departments] should carefully monitor customers' concerns and complaints — and deal with them with an attitude of whatever it takes. Once a consumer goes to a regulatory body, it's too late." Freeman says the "mythological working assumption" of U.S. regulators is that everyone reads and relies upon a site's privacy policy when they provide their personal information. With that as a protective backdrop for media companies, he said, "the privacy policy is your chance to write your own federal and state law. So there's no excuse for not living up to it." To Freeman's knowledge, government agencies such as the Federal Trade Commission have not lodged any complaints against online news sites over violations of consumers' personal information. "So newspaper publishers must be doing a good job," he said. When putting together a registration program and privacy policy, the legal department should lead the initiative, but it must also involve the managers who touch the data, Freeman said. "The best thing you can do is take off your legal and

© 2003 Newspaper Association of America. All rights reserved.

28

digitaledge

marketing hats and think about how your activities will be received by consumers," he said. Annie Loftus, a technology analyst with Technical Solutions LLC, a newspaper consultancy with ties to NAA, said that users vary widely in their concerns about privacy. "Some are delighted at personal greetings and custom services," she said. "Others are surprised and offended at how much is known or guessed about them. Sometimes the same user responds differently to different sites. A long-term customer relationship involves trust, especially online, and invading the privacy of your customers is a sure way to lose their trust." Some corporate policies that may be perfectly legal — such as a universal mandatory opt-in for e-mail marketing messages — might not be a sound business practice, Loftus said. "An opt-in policy, where the user must select the option to receive more information, is a way to pre-select the best sales leads from your visitors," she said. "It makes more sense to find people who want more information about your products and market to them. Chasing people who hate to be bothered is a lousy way to start a long-term
Best practices: •Respect users' privacy rights.

relationship with a customer, and it requires a constant watch on privacy law developments." Some users may also react differently to targeted advertising, she said. Many customers who provide a birthday and a ZIP code are unaware that, on average, about eight people with the same birthday live in each ZIP code. Given the year of birth in addition to the birthday, a media company has a fair chance of uniquely identifying the individual. "Newspapers stand to lose a lot if customers find out they have been tracked in ways that they didn't expect," Loftus said. "If the customer finds out she is being served different pages than other people, she may or may not see that as a benefit. If the data is incorrect, or the aggregate data doesn't apply, the advertising may be totally misguided. Perhaps a spouse's surfing behavior at home gets inadvertently tied to an account used at work. Perhaps a work ZIP code links a person to the wrong salary range. This type of pitfall is more likely if the customer is not involved in the customization process and could void its benefits."

•Post a privacy policy on your site, with prominent links on the home page and registration page. •Involve new media managers and the legal department in the drafting of the privacy policy. •Make it clear and understandable to lay readers. Have an editor rewrite the legalese. •Be upfront and let users know how their personal information will and will not be used.

© 2003 Newspaper Association of America. All rights reserved.

29

digitaledge

Looking Ahead
In 2001, a Borrell & Associates report called for an alliance of newspaper sites to use a single sign-on, one-account, one-registration technology known as an e-wallet to build a uniform transaction standard and create a nationwide databank of customers. That never materialized, with online newspapers taking a balkanized approach to registration outside of their corporate networks. Beyond newspapers, Microsoft Corp. and the Sun Microsystems-led Liberty Alliance have introduced competing systems that allow for Web users to register once and then have access to a network of affiliated sites. Perhaps a nationwide registration solution will be found one day for newspapers. Until then, it's likely we'll continue to see hit-andmiss experiments in registration, followed by mass adoption of the most successful practices. While registration appears to be a successful strategy for many sites, the one certainty is that what works in some markets may not work in others. Many sites concentrate too heavily on recruiting new registrants, said Charlene Li, principal analyst at Forrester Research. "My conclusion is that most sites don't handle registration very well — they focus on serving new registering users but not necessarily serving returning users, who are their most valuable customers." She noted that newspapers' approaches to registration vary widely, from washingtonpost.com's minimalist technique to the detailed process at Belo Interactive or latimes.com. "But a bigger problem," Li said, "is actually doing something with the results. Few of the sites are in a position to monetize the information they collect. There's also a question about whether marketers are ready to do the type of targeting being pushed by solutions like Tacoda, Revenue Science and AlmondNet — and also pay the premium required with the use of that kind of technology." During the next few years, online newspapers will continue to fine-tune their registration efforts. Elaine Zinngrabe of latimes.com spoke for many when she said, "Hopefully going forward, registration will be less of a burden on the consumer and more of a tool that we jointly use to better tailor advertising and editorial." During fall 2003, the Jerusalem Post Online Edition removed registration as a requirement for users who want to access to "Latest News," the most popular section of the site. The site's executive editor, Alan Abbey, told a reporter that the change was made to funnel more readers toward the editorials, columnists and op-ed pieces, all of which still require registration. The Jerusalem Post counts about 300,000 registered users, 70 percent of them from the United States and Canada.

The Jerusalem Post counts about 300,000 registered users, 70 percent of them from the United States and Canada.
The question of whether to give readers direct access to their personal data will soon begin appearing on newspapers' radar screens. Linda Fisk of Belo Interactive said that by January 2004 the company plans to launch the next generation of customization and personalization across the network in a section called Member Center.

© 2003 Newspaper Association of America. All rights reserved.

30

digitaledge

Users will be able to change their profiles, update their registration data, customize their Web site experience, and opt into and out of newsletters and e-mail marketing products — all in one area. At NYTimes.com, Stephen Newman doesn't foresee any significant near-term changes in the site's use of registration data. "We feel we're right where we want to be. There's a danger in trying to do too much, to hypersegment the audience down to a granular level where it becomes costly and confusing," Newman said. "A lot of companies have tried customization with only limited success. I'm not so certain that's the way to go." Instead, NYTimes.com will continue to use registration to focus on its corporate goals of brand extension, knowing who the audience is, tracking the site's international audience, and providing more relevant targeted advertising.

As described throughout the report, each visitor's e-mail address represents a critical marketing touchpoint. As salespeople become more knowledgeable and advertisers more receptive to targeting enabled by registration, both groups will press for more details about the audience. Those who are just entering the registration game see the potential for spillover benefits to the newspaper industry as a whole. Yelvington, who said he wished Morris had moved faster into realm of registration, issued this sobering call to arms: "I believe that the single most critical issue facing the entire newspaper industry today is the potentially fatal inability to connect with people in younger demographic categories. If you look at the drop-off in print product consumption below age 35, it's precipitous and frightening. From an editorial and product development point of view, I really need to take the pulse of the online audience and understand the behaviors of different age groups so that I can craft products that will hopefully win back some of that lost audience. And without registration, I'm guessing. I'm shooting in the dark. I'm just obsessed by this under-35 problem. In the next decade this whole industry will be deeply troubled if we don't come up with new products that win back that audience."

"I really need to take the pulse of the online audience and understand the behaviors of different age groups." — Steve Yelvington, Morris Digital Works
Publishers that began the registration process by introducing a three-question survey — e.g. the smallest impediment to customers' site access — likely will request more information.

© 2003 Newspaper Association of America. All rights reserved.

31

digitaledge

Additional Resources
The Digital Edge and NAA offer more information about online registration. A compilation of Digital Edge and Presstime articles dating back to 2001 is available here: http://www.digitaledge.org/registration.html. For details about sites that require registration, examples of user levels and registration strategy, visit http://www.naa.org/feds/onlineresource/onlinereg.cfm. In May 2003, NAA hosted two Web-based educational sessions about registration models and revenue applications hosted by Nando Media's Norm Cloutier and Belo Interactive's Linda Fisk. To purchase archival access to the sessions, visit http://www.naauniversity.org. Access to the Webinars will be available starting in February 2004. Still seeking more registration advice and examples? If you are interested in participating in a NAA e-forum dedicated to registration, send an e-mail message to Rob Runett, rob.runett@naa.org.

© 2003 Newspaper Association of America. All rights reserved.

32

digitaledge

Report Sources
Tim Archambault, online services manager, Bangor (Maine) Daily News/Bangornews.com, tarchambault@bangordailynews.net, 207.990.8034. Rebecca Baldwin, director of product development, Tribune Interactive, rbaldwin@tribune.com, 312.222.4503. Norm Cloutier, product manager, Nando Media, norm@nandomedia.com, 919.829.4858. Mike Coleman, senior manager of digital media, The Arizona Republic, mcoleman@azcentral.com, 602.444.8074. Kelly Dyer, general manager, NewsOK.com, kdyer@news.com, 405.475.3979. Linda Fisk, vice president, audience development and management, Belo Interactive, linda.fisk@belointeractive.com, 214.977.4017 D. Reed Freeman Jr., partner, Collier Shannon Scott PLLC, rfreeman@colliershannon.com, 202.342.8400 Kathy Ives, sales and marketing manager, Nando Media, kives@nandomedia.com, 919.861.1207. Jeff Jarvis, president, Advance Internet, jeff@buzzmachine.com, 201.459.2850. Chris Jennewein, director of Internet operations, The Union-Tribune Publishing Co., chris.jennewein@uniontrib.com, 619.718.5285. Darrell Kunken, vice president of strategic marketing and interactive media, The Bakersfield Californian, dkunken@bakersfield.com, 661.395.7201 Susan Lavington, director of marketing, USAToday.com, Slavington@usatoday.com, 703.854.3498. Charlene Li, principal analyst, Forrester Research, cli@forrester.com, 415.848.1319. Annie Loftus, technology analyst, Technical Solutions LLC, annie.loftus@naa.org, 703.902.1904. Don Marshall, director of communications, Washingtonpost.Newsweek Interactive, don.marshall@wpni.com, 703.469.2721. Dave Morgan, CEO, Tacoda Systems, dave@tacoda.com, 646.674.2728.

© 2003 Newspaper Association of America. All rights reserved.

33

digitaledge

Stephen Newman, deputy general manager, NYTimes.com, newman@nytimes.com 646.698.8295 Michael Parker, vice president of Internet strategy and solutions, Cox Newspapers, michael.parker@cox.com, 678.645.4033. Dipik Rai, senior business manager for registration, Knight Ridder Digital, DRai@knightridder.com. Mark S. Roby, publisher, Watertown (S.D.) Public Opinion, markr@thepublicopinion.com, 605.886.6901 x134 Nick Rogosienski, vice president, interactive and direct marketing, Star Tribune, Minneapolis, nickrogo@startribune.com, 612.673.7749. Robin Saul, publisher, Carroll County (Md.) Times, RSaul@lcniofmd.com, 410.857.7870. Kathy Schwartz, new media manager, NashuaTelegraph.com, kschwartz@nh.com, 603.594.6458. Donna Stokley, director of online advertising sales, West Coast and latimes.com, Tribune Interactive, donna.stokley@latimes.com, 213.473.2557. Marc Wilson, CEO, TownNews, marcus@townnews.com, 800.293.9576. Steve Yelvington, VP, strategy and content, Morris Digital Works, steve.yelvington@morris.com, 706.823.3359 Elaine Zinngrabe, assistant general manager and executive producer, latimes.com, Elaine.zinngrabe@latimes.com, 213. 473.2552 Anna Zornosa, chief marketing officer, Knight Ridder Digital, azornosa@knightridder.com, 408.938.6063.

© 2003 Newspaper Association of America. All rights reserved.

34

digitaledge