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Advertising in the News Network

Communication with Users at Eye Level

Colloquy Partner:
Ernst Heßmann, Publisher and Editor

Portrait foto of Ernst Heßmann, advertising publications publisher and journalist

Ernst Heßmann, educated editor with 40 years of professional experience, at last vice editor-in-chief of "Westfälische Rundschau" in the city of Dortmund, Germany; from 2009 to 2015 ( †) publisher and owner of three local, ad-financed monthly magazines. This interview was carried out in winter 2014/2015.

Ernst Heßmann: What is special about your ads in the news network?

Michael Strzodka: First of all, the news network is a digital and mobile advertising platform especially for each retailer, craftsmen, service provider, which deliberately wants to allure the people in his region for his business - especially younger people. Additionally, ...

Ernst Heßmann: Ok, that's usual rhetoric, but seriously: what are the concise differences of your ads from well known online advertising formats like banners, skyscrapers, ... ?

Rainer Lutze: Our ads are characterized by these special advantages: they will be displayed for mobile use in a cognitive efficient way full format. They will be displayed to the user, as soon as he approaches the vicinity of the tendered location. In addition, the advertiser can book and design his ad online by himself, in a multimedia style: text, images, an image gallery and video - and may change this content at each point in time during the booking period of the ad, for example changing prices, adding special offers. Moreover, the news network delivers a success control report for each booked including when the ad has been displayed to how many users of the news network app.

Michael Strzodka: An additional advantage of our ads for the advertiser will be the optional, automatic enrichment of ads by suitable background information available within the system in form of a dossier and without any further efforts for him, for example about the historic building in which a bakery is located, about former awards a butcher has won for his products ... .

Ernst Heßmann: These may be nice features, although, the ultimate decisive factor will be of course the price of such ads!?

Michael Strzodka: We feature a flexible price model, in order to provide advertisers - with small as well as large budgets - with customized, attractive offers. Especially with our ad price schema "pay per physical visit"! The advertiser will have to pay, in addition to a small fixed fee for the ad booking, excactly if - and only if - users, which have viewed the ad, shortly afterwards really show up in the brick-and-mortar store or in front of the shop-window for a sufficient time span.

Ernst Heßmann: ... and what about privacy?

Rainer Lutze: Indeed, the privacy related challenges for such a solution are substantial, but many other requirements are relevant, too. The advertiser will be not willing to pay for his steady customers, which view his ads and visit the brick-and-mortar store on a regular basis, but have been customers for a long term and prior to the advertising campaign. Or he may want to make special offers exclusively to new customers. All of these features will be supported by our approach, but unfortunately, it would be too complex for this conversation to present and discuss all the details.

Ernst Heßmann: OK... . But, what happens, if a business owner places his advertising by misusing a free report within the news network instead of explicitly ordering and placing a paid ad?

Rainer Lutze: He may try in doing so, we can't prevent this in general, but this guy may face an unpleasant surprise pretty soon. For free citizen reports in the news network, other active users - as eyewitnesses - will have full access to the content and can revise and amend them. If advertisements would be wrongly published via free reports within the network, they will be completely not protected from changes by other users. So, malicious competitors might change prices or details of the offer in an arbitrary way. Of course and in contrast, for a regular, paid ad such activities will be definitely impossible within our news network.

Ernst Heßmann: Will the news network sometimes be a serious competition for me as a publisher of three ad-financed monthly magazines?

Michael Strzodka: Yes and no, based on the high proximity of your magazines to customers and readers I do not see an immediate thread. But, in the medium and long term, the structural decline of the print media will impact also your print products. Therefore and as a matter of principle for advertising publications and ad-financed, local monthly magazines, the news network will be an opportunity for the future too.

Rainer Lutze: If you start early right now with the implementation, you will have the necessary scope for development in order to transform and evolve print products into a forward-looking medium. And you may and will find optimal innovative formats for news and advertising based on real customer and user acceptance.

Ernst Heßmann: ... but will such a new digital medium be affordable for a single publisher?

Michael Strzodka: Depending on the size of the publishing house - definitely yes! For a newspaper publishing company with a circulation of 100.000 sold copies and more, our model calculation shows a positive return of investment for the project implementation within a few years. For smaller publishing houses, cooperations and joint efforts will be favorable and targeted with respect to the substantial development costs for this completely new medium. As customary and practised today in this sector of publishing industry for printing partnerships and sales cooperations.

Rainer Lutze: The technical system is in essence a white-label solution, which will be centrally operated and specifically customized for the participating publishing houses with respect to their individual brands. In this way, also small publishing houses can utilize the news network as a software as a service (saas) solution, without taking care for the implementation process of the system and concerning themselves with daily operations and availability aspects. This will be a win-win situation for all stakeholders: the more will participate, the more system operations can be organized efficient and cost effective. And the system operator will gain additional profits from the IT service provided for the licensees of the news network.

Ernst Heßmann: Which will be your next steps with the news network?

Rainer Lutze an Michael Strzodka : We are currently engaged to convince investors about the far-reaching potentials of our concept. If one does not close his eyes to the current change of the media sector, he will have to actively shape the future with courage and confidence right now. For this, we do have a detailed blueprint. But, unfortunately old Germany is not silicon valley.

Ernst Heßmann: Then, good luck for your project!