The future of "Politico": TBD

I think the biggest eye opener I’ve experienced during these past two weeks is the abundance of fairly simple business models in the news industry that have the potential to be hugely successful. The idea behind “Politico” seems so simple, now that I’ve been told. Reporters from the political section of “The Washington Post” decided to get together and create a comprehensive news source dealing solely with the political spectrum inside the Beltway. They felt that the political section of the Post was no longer living up to its reputation, so in order to present the best politically comprehensive publication, they knew they had to pay for the best talent. It’s not a complex concept. The New York Yankees do it, yet no one in the news industry thought of it until 2006.

The minds behind Politico also seem to have solved the advertising issue that’s slowly killing the news industry. Politico publishes their web content for the general public, but publishes a small circulation of their print content for the Washington political sphere (those on Capitol Hill, etc). Now let’s rewind. We’ve already been told that print advertising has proven to work much better than online advertising. The problem is that print is decreasing in popularity while online content is increasing. So with people getting their news for free online and advertisers refusing to buy ads because they’ve been proven ineffective in an online format, two sources of revenue are cut off. Well, “Politico” did a few things differently. First, their print circulation is very small so there’s not a lot of cost involved. Secondly, it circulates to all the right people. Therefore, advertisers want desperately to be present in editions of “Politico”. But it might surprise you that a lot of those advertisers aren’t advertising their actual products. Because policy makers are the “consumers” of “Politico”, corporations are advertising to help shape public policy in their favor. Jim gave us an example that simplifies this idea: Coca Cola isn’t trying to sell a can of Coke. They’re trying to prevent a sugar tax.

Another problem that “Politico” has solved is marketing their brand in a cost effective way. Astonishingly, Jim told us that Politico has only spent $50,00-$100,000 on promotion, yet look at their skyrocketing success and overall recognition. By spending most of their money bringing in big talent, they have people capable of being the first to break big stories. And when those stories break, the cable and morning shows have to have them on to discuss it. It’s free advertising at its best. Especially when their reporters can sit in front of the giant red POLITICO letters, another free way of pushing their brand name.

But great success doesn’t come without anxiety. Staying at the top can often be harder than getting to the top so “Politico” must be constantly reinventing itself in order to stay ahead of the curve. There’s certainly no shortage of competitors who are vying for that top position.