The news media is at a crucial juncture. The digital portion of the industry is fighting against fake news, fake ad clicks, and news aggregation by social media platforms like Facebook and Google—and even virtual assistants like Amazon’s Alexa.
Traditional media companies, meanwhile, are facing even tougher challenges, such as millennials not reading print publications and advertisers who no longer want to buy ads.
Though this is a difficult environment, there are still many opportunities for success. As the industry shifts, media companies are left with two main assets: Trust in their brands, and their relationships with consumers and advertisers. Any strategy needs to play to these advantages.
As founder of the Institute for Media Strategies, we’ve aided media companies worldwide with their digital transformation strategies since 2012. Our work has identified 10 points that can serve as starting points to change traditional mindset for what we call the “post-integration” era, where the focus was in bringing together print and digital operations.
1) We as an industry need to finally fully acknowledge that our traditional business models are dead. Let’s face the truth: Newspapers can no longer put advertisers’ messages next to journalism and hope to reach readers. That idea does not work in the digital age.
Traditional digital display advertising will never compensate for the losses in print ads. Facebook, Google and Co. have already won the digital advertising game by taking reportedly around 98 percent of the new revenues in digital advertising, leaving the scraps for media companies.
For circulation revenues, digital subscription revenue will have to compensate the losses in print subscriptions (and print advertising), or at least provide substantial revenues. There are examples where this works very well such at the Wall Street Journal or the New York Times. For the majority of media companies though, these success stories will be difficult to follow, especially when we talk about regional media houses.
Therefore, we need to fundamentally rethink how we see our business. Many media companies are already heading down this road. Die Zeit, a German weekly newspaper, is one example. Known as the newspaper for well-educated people, Die Zeit began long ago to capitalize on its deep base of intelligent, erudite readers. It now offers books, career services, conferences, classes for young and old alike, and even luxury goods that the prosperous can afford, such as wine and art. Today, Die Zeit is a trusted source not only for journalism but also for other products and services, and most importantly, people pay premium price.
2) There is no longer such a thing as mass media in the context of traditional media. Today, the only real mass communication platforms are Facebook and its social-network, online-platform brethren. Every traditional media brand is now a niche publisher: geographically, by topic, by target audience. But this is a hard thing to take on board. Most publishers still believe they must appeal to everyone and struggle to truly identify their audience.
Media houses must know where their niche is and fully embrace it. Focus on what you are good at doing. The Wall Street Journal, for instance, is a world-class business newspaper that concentrates on reporting markets and deal-related news, as well as news important to executives and the business minded. Trying to be anything other than that will only serve to dilute the power of the brand and confuse their audience.
Austria’s Kleine Zeitung (“Little Newspaper”) is a very successful and well-read regional newspaper that serves residents of just two Austrian counties. Because the paper has made itself invaluable to its readers in the regions, it was able to adopt a paywall with a “freemium” business model with little trauma. They also know very well what they stand for, where their strengths are what their niche is. And the readers made it very clear in a market insight project a few years ago where the readers indicated that they will immediately cancel any subscription if the regional and local focus is lost.
The more focused the niche, the more publishers have an opportunity to capitalize on readers’ interests. Another example is F&W Media who, until a few years ago, were a publisher of special-interest magazines on topics ranging from poetry writing and numismatics to guns and cars. Now they are a full-service provider around these topics with events, shops, paid content and many other offerings.
When you have found your niche, set the agenda without following the fashion. This holds true for content, services, commercial offers, advertisers, and technology. Don’t wait until something happens before you react; shape the future yourself by proactively creating it.
3) One question that seems to be very hard to answer by media executives is “Why is your media company in existence?” And no, it is not for making money and making shareholders happy.
Creating a very clear understanding across the company of why and how the company creates value, and jettison any activities that don’t lead you in this direction is a crucial task. For instance, media companies have for many years chased web traffic. The digital advertising model obviously required high reach and the goal was to grow unique users and page impression.
While this model is very successful, more for some media brands such as the Daily Mail in U.K., it was a distraction for many others, leading them into areas that didn’t contribute value for the audience and, potentially more damaging, lured them into, for instance, publishing stories that had no connection with the brand.
The next step of understanding the value of your products is to put a price tag on everything the media house creates that has value. And if it doesn’t add value, it should not be produced anyway. Interestingly, stopping doing things is in many cases far more difficult than to starting new things.
When it comes to added value, it is also important to not only see the journalism or the ad campaign for the advertiser as value adding. Looking at, for instance, Amazon, the added value is apart from a huge selection of products at competitive prices in addition to a fast delivery and easy transaction. Now let’s think about how many clicks a reader need to subscribe to a newspaper’s newsletter email list or book an ad campaign on the digital channels? For the latter LinkedIn, Facebook and Google have demonstrated how easy it can and should be.
4) A media company should not understand itself only as a content company, but also as a service and experience company. This opens up new aspects and way of thinking and therefore new opportunities and revenue sources if a company with its products can make itself indispensable to your audience life or advertising customers’ business strategy. Expansive offerings can include conferences, events, tours, e-commerce, advisory and consulting services.
Media companies around the world are trying to reinvent themselves in this fashion. The Economist Intelligence Unit, a conference and consulting arm of the British financial magazine, is one example. In the U.S., the Wall Street Journal has a sizeable conference business, and partners with National Geographic to offer guided adventure tours. Forbes Magazine has long offered “investor cruises” on which its editors and Forbes family members set sail with readers to discuss finance topics at sea. It’s the opposite of content marketing: thinking beyond content, and using content to provide a service. While not all ventures might be successful, experimenting and learning is part of the journey.
5) To survive and grow, media companies need to establish a direct, deep relationship with their audience of readers or users. If you truly understand who consumes your products, why and how, you can present them with tailored offerings of both journalism and other services.
On the business side, a similar relationship is crucial between the media company and its business partners, advertisers, and sponsors. Direct customer contact allows a company to think and act more like an advertising agency and to use a consultative sales approach, i.e. working with a customer to help solve their business problems, rather than pushing a product, like print or online ad inventory onto them.
It will take some training for your sales staff to reimagine themselves as working with customers on solutions instead of selling products. If you find that their new “solutions” seem to involve simply buying online ads, you may need different salespeople.
6) Putting the right people in the right jobs. If your staff has legacy skills and attitudes, they need to change rapidly, or leave. Investing heavily in good people who stay or join is paramount. Investment in this context is not only monetary but also offering attractive working environment, culture and infrastructure.
The vast majority of media companies’ expenses are spent on people, and also the most challenging part in media transformation to get right.
Hiring for aptitude and attitude, and training for specialization is a modern way to approach it. Don’t expect people to be experts in nearby fields without extra training, however; you can’t ask a journalist to take over social media or data analytics without proper education.
In many organizations, mediocrity is accepted and tolerated, which in today’s environment can be a dangerous habit. Avoid those, especially in leadership positions, who are just good enough for the job; they should be the best person for the job, which was one of Steve Jobs’ mantras.
In a recent transformation project in an U.S. media company, the entire leadership team of the editorial and commercial department was changed. Positions were partly filled by internal candidates who applied for the jobs, as well as external candidates. Bringing “fresh blood” is a very important ingredient for any change, otherwise it could become quickly a people recycling or “reshuffling deckchairs on the Titanic” exercise.
And when you decide to let certain people go, it is in the interest of the organization to make those decisions quickly and implement them properly.
7) A digital transformation that is taken seriously and is sustainable has to address the entire firm, not just single departments. It affects all areas from marketing to products, workflows, structures, technologies, and people across the company, which must be addressed simultaneously and in a coordinated way.
This means a comprehensive change approach. For instance, a few years back, the New Zealand Herald started their project with six parallel subprojects that addressed all relevant aspects of their editorial operation, from market insight, products, workflows, technology, HR and architecture. A similar approach was taken by the Wall Street Journal and more recently, an Austrian national news media company. In all cases, it is about rethinking the entire operation in a structured way and not implementing isolated solutions for single departments or business areas.
8) A media company in transition needs to use the right technology and tools to support and drive the future strategy. Inadequate software and infrastructure very quickly holds the organization back and is often a welcome reason for excuses for people struggling with change not to participate.
In many cases, off- the-shelf applications are not the answer anymore. These rarely adapt to the environment changes quickly enough, it often forces you to compromise on your needs as the solutions is supposed to cater a wide range of requirements of different customers. Understandably, software companies have their own business and selling goals, where keeping the solution as standard as possible is often one of them.
The best solution usually is to design, and possibly build, your own solutions in a modular and flexible fashion. That does not mean a media company should or needs to become a technology firm. But clever partnerships, investments, and M&A can provide the required skills. However, the core know-how and expertise for the solution development and system architecture should be built and kept within the company.
9) Although media companies aren’t generally very good in consumer and B2B branding, customer and membership management, marketing, or public relation, these have become crucial skills in today’s world. The emotional connection to a brand and loyalty has become key for a successful media business.
Clever communication with consumers or business partners through available on- and offline touch points and accepting, that both the consumer business partners have far more choices to spend their time or money, require the development or acquisition of new skills. Some companies, for instance, hire sales and communication professional from internet retailers or branding specialists from the FMCG industry to make sure that the media brand moves beyond subscription stalls at fair and bottles of water that come for free with newspaper copies.
10) And finally: The outcome of transformation is not a new, stable status quo that will last for the next 10 years. What you’re aiming for instead is a culture of organizational flexibility, with staff comfortable enough and willing to constantly reinvent themselves and adapt to new demands and opportunities.
The insight that the only thing that is constant is change by the Greek philosopher Heraclitus is about 2,500 years old, but truer than ever. The good news is that after the initial revolution, the evolution that follows does not require the same cataclysmic amounts of energy.
Based in Austria and the U.K., Dietmar Schantin has helped transform the editorial and commercial operations of media brands around the world: from the Telegraph Media Group, Ringier, the Hindustan Times, New Zealand Herald and Dow Jones. He founded the Institute for Media Strategies in 2012 after serving as executive director of WAN-IFRA, the global association of news publishers. He can be reached at ifms-ltd.com and at [email protected]