You can read the story here. I’m underscoring the quote because I’ve seen so many newspaper publishers budget up their 3% ad revenue and 1.5% circulation revenue year after year only to see shortfalls of double-digits. They never wanted to budget to reality.

I hope that’s changing now that reality is as stark as it can be.

I took pictures of every piece of clothing, grouped like items together, wrote descriptions and uploaded everything to eBay.

Labor Cost: At least 20 hours of my time at a conservative $15 an hour = $300
Listing fees: $29.49
Total cost to post to eBay: $329.49

Total revenue from eBay: $37.92

Profit(loss): ($291.57)

Since I only sold 8 of the 26 sets listed on eBay, I created a photo gallery and sent the link around to stay-at-home moms in my area. At this point, I was in the hole so I just wanted to get the clothes out of the corner of my bedroom and get some money for them. I was willing to sell the whole lot for just $150 (or less!).

I wasn’t getting any bites through viral marketing so I decided to place a free ad in the Pocono Record and poconorecord.com (where I also happen to work). The placement took less than five minutes. Here’s the ad copy:

Mostly MOTHERHOOD brands
Entire lot, $150, 28 shirts, 4 skirts
13 pants, 2 shorts. Pick-up only
Call 570-582-3814

I couldn’t fit the long link to the gallery in the lines allotted but two days after the ad ran in PRINT, I got a call from a woman in nearby Tannersville, PA who was interested in buying the whole lot. I e-mailed her the link to the gallery, she called me last night after checking out the pictures, and we’re finalizing the deal at noon tomorrow when the buyer comes to pick up the clothes.

Print ad cost: Free
Total revenue: $75

(Okay, I’m not counting the $300 in labor because I already spent that on eBay.)

Lesson: Print still drives quality leads. Online works well as a tool for more information. Why can’t we have unlimited pictures with our free ads online? Oh, because our online classified marketplace is so tightly tied to print we can’t leverage what’s good about online while also leveraging what’s good about print. We have to fix that.

And, eBay is over-rated if you have a lot of stuff and no time to spend learning the ropes.

1. Direct communication - if you have a phone tree, you’re behind the curve.

2. Amplification of consumers - everyone is a critic and has the ability to share their critiques with 1 or 1 million people easily.

3. Authentic stories -being the brand you say you are (can’t give different messages to different groups).

4. Speed - if you’re competition is faster, they win.

5. Long Tail - Amazon gets 1/2 their revenue on books that Barnes and Noble doesn’t even carry. Choice creates new audience.

6. Outsourcing - if certain costs go to zero, you can change the business you’re in.

7. Dicing of everything - Google molecularized the Internet. You don’t have one front door anymore.

8. Infinite Channels - to talk about what you do and if you don’t like any of them you can create your own.

9. Consumer to Consumer - no middle man.

10. Scarce & Abundant - the two have flipped-flopped in some cases and if what you sell used to be scarce (NEWS) and now it’s abundant, you need to change what you do or how you do it because things in abundance don’t make money.

11. Big Ideas - is the product.

12. Permission - collect people who want to hear from you every day and complain when they don’t. Daily Candy is a good example.

13. The New Rich - what people are willing to spend money on today is surprising.

There were 14 but I missed one. If someone knows the 14th trend, please share.

Godin’s theory in summary — Carve out your niche by connecting people to each other.

Some examples: threadless.com, replacements.com, zappos.com.

He just summed up why the yellow pages book industry, Sotheby’s in auctions and AOL in social networking missed the boat: “They all rested on their laurels and refused to give up the old for the new.”

In his farewell memo, Mr. O’Shea crystallizes the growing problem for newspapers today in terms of quality journalism and what our profession was originally constructed to achieve and can still achieve — given the appropriate resources.

I especially like these two grafs:

This company, indeed, this industry, must invest more in solid, relevant journalism. We must integrate the speed and agility of the Internet with the news judgment and editorial values of the newsroom, values that are more important than ever as the hunger for news continues to surge and gossip pollutes the information atmosphere. Even in hard times, wise investment — not retraction – is the long-term answer to the industry’s troubles. We must build on our core strength, which is good, accurate reporting, the backbone of solid journalism, the public service that helps people make the right decisions about their increasingly complex lives.

We must tell people what they want to know and – even more important — what they might not want to know, about war, politics, economics, schools, corruption and the thoughts and deeds of those who lead us. We need to tell readers more about Barack Obama and less about Britney Spears. We must give a voice to those who can’t afford a megaphone. And we must become more than a marketing slogan. I know I can rely on this newsroom to do this.

I don’t think it’s naive to follow a strategy that achieves both the solid journalism O’Shea refers to AND strengthens our online products and grows audience everywhere people want news and information.

But, if our product is nothing but smut, gossip and pandering to the lowest common denominator I’m afraid the audience growth will be minimal. I’m even more afraid of what would happen to our society if we continue down the slippery slope and do not invest in good news judgment and editorial values.

So, what’s the solution? Ari Rosenberg from PerformancePricing.com thinks we should stop selling multiple advertisers into a single position and limit the number of positions available. He wrote more extensively about this solution on MediaPost.

His argument makes sense:

The Internet has become one gigantic Time Square, which is why advertisers continue (at an alarming pace) to place less and less value on the exposure they purchase, while overemphasizing the importance of the performance of their campaigns while holding publishers accountable for this performance.

His solution makes sense, too:

So here is what online publishers can do to help themselves before it’s too late to do so: collectively strip down their page views to two or three ad units and then sell them exclusively as a roadblock page impression. So one page view would equal one collective impression for one single advertiser.

Sounds scary. Rosenberg admits in the short-term his solution will cost publishers revenue, but the long-term results would be beneficial as the vast amount of inventory tightens, campaigns become more measurable (Ah, I can SEE my ad!), and prices rise because the VALUE has been re-established (the old supply-and-demand scenario).

Many newspapers have taken steps in this direction by limiting the number of positions on their pages. The next step is to eliminate positions or take them down to one on fringe pages and sell at a premium the remaining spaces.

We may have less advertisers but hopefully that would translate into a better user experience (less clutter) which means more “good” traffic which means better results for our advertisers which means a justifiable rate increase!