You’ve arrived at a blog about transforming the companies that publish newspapers. And it’s a blog with an unorthodox point of view.
Here it is: News will not save you.
Why not? Because the disruption that’s pounding newspaper companies is not about people Read the rest of this entry
For local news media, the most crippling disruption served up by the Internet isn’t in news — it’s in advertising.
And it’s not just other players getting the ad spending we used to get, although there’s plenty of that going on.
The more insidious advertising disruption is that local businesses need less and less advertising than they once did.
Why? Because the digital revolution has opened an infinite number of direct channels between consumers and businesses. This is a revolution happening right before our eyes.
In the old, pre-digital days, businesses had to buy space or time in other people’s media channels to reach consumers. The media — newspapers, radio, television, magazines, yellow pages — owned the pipes that went direct to the consumer. They had the audiences; businesses didn’t.
So businesses had to pay the media to push their advertising messages through their channels.
Now audience access is no longer exclusive, and it’s increasingly initiated from the consumer’s end. Virtually every consumer is connected to the vastness of the Internet, and most people are constantly finding businesses by doing direct searches on the Web.
When they need things, they enter a few keywords in a search engine or on Facebook. From the search results, they can click directly to the business’s website, and then they can call the store, drive to it, or — on some businesses’ sites — buy online.
This is a new era of direct consumer access without intermediaries. Businesses don’t need to buy advertising to play.
But that doesn’t mean it’s easy for businesses — or free. Businesses can’t be found in this new environment unless they work at it.
Businesses are pretty much out of the game if they aren’t on Facebook, don’t have websites, have sites with poor search-engine optimization or sites not optimized for mobile. And even businesses that check all those boxes will lose out to their competitors if their websites or social media pages are poorly done.
So this era of direct contact creates a whole new set of imperatives for businesses. They need to do the right things — and spend some money on them — to make sure they get found by consumers and get chosen over their competitors.
And, because direct consumer access can go in both directions, they also can develop outbound strategies to communicate directly with possible customers through email, loyalty programs, contests and promotions of various kinds. Which cost money.
In all of that, there’s a huge amount of opportunity for local media companies if they’re willing to get into the game and play to win. But they have to venture well outside their old advertising-based business models.
In the media industry, most of these new, direct-access tactics are lumped together under the term “digital services” or “digital marketing services,” as distinct from advertising.
A June Borrell Associates report titled “Local Advertising Hits a Tipping Point” provided hard data to support this massive and growing trend. The chart below, based on a Borrell survey of SMBs, says it all.
(Sorry about the fuzzy copy; click on the graph to see it in a larger size.)
Each blue bar represents a digital marketing activity and shows the percent of businesses that said they intend to spend money on it in 2015. Each yellow bar represents a digital advertising activity and shows the percent that said they intend to spend money on it in 2015.
Note that the top five — website design and maintenance, website hosting and support, SEO, social media management and email management — are all tactics to drive direct consumer contacts. And so are most of the other blue bars.
You can see at a glance that SMBs are planning to buy a lot fewer advertising solutions than direct-contact solutions.
Read the description of each blue bar, and you’ll see many of the ways a business can spend money to attract or instigate more direct contact with consumers. Mostly, these tactics involve businesses developing their own media or content designed to be found directly by consumers. Advertising, on the other hand, is designed to be placed in someone else’s media channels.
To show how large the spending is on these digital services (i.e., direct-contact tactics) Borrell’s report also provided a case study on digital spending in Myrtle Beach, S.C. I won’t copy the Borrell charts, but suffice it to say that they found local businesses spending $188 million on local digital advertising — and $981 million on digital services.
The conclusion is painfully obvious: There’s a huge amount of local spending going into direct-access tactics. That’s where the puck is now, and where it will continue to go. The evidence is so strong — and the shift in spending so pronounced — that Borrell is well warranted in calling it a “tipping point.”
If local media companies want a share, they have to skate hard in that direction. That’s why many newspaper companies, including my employer, Morris Publishing Group, have set up their own digital marketing agencies.
We’ve found, as have many others, that it’s very hard to sell digital services from within the core business. What works best — as Gordon Borrell has been telling the industry for more than 10 years — is separate digital sellers and separate digital sales teams.
So, how are you doing?
As one indicator, try doing a web search on the key words “digital marketing services” plus the name of your town or city. Does your newspaper, radio station, TV station, magazine or directory business show up above the fold? On the first page?
If not, and other digital agencies do, they’re gobbling up this new business.
Time to change your game.
Sounds like a great session for a publishers’ conference, doesn’t it? It’s a big topic for local media businesses these days, as mobile web traffic surpasses desktop traffic for more and more newspapers, magazines and broadcast stations.
That’s why I spent an afternoon searching the Web recently. Read the rest of this entry
A recent email from Internet Retailer grabbed my attention.
Its purpose was to plug their new annual Top 500 Guide — a huge directory packed with stats on who’s big in e-commerce, who’s growing market share and who’s not.
But what caught my eye was their take on what’s new in the data.
For years, it said, previous guides had shown big-box stores getting drubbed in e-commerce sales by web-only e-tailers.
“But,” the email said, “…that began changing in 2013, when the chains closed the gap by growing their online sales by 16.7%, taking market share away from manufacturers and catalogers…. Read the rest of this entry
Lots of people understand that the traditional business model around news is breaking down. Far fewer realize it’s not just the business part — advertising — that’s broken. It’s also news itself.
Why is this so hard to understand?
A planet full of people is going from a daily diet of a newspaper and a couple of news broadcasts to constant access to almost everything there is to know. Inevitably, this is causing people today to want and expect different things from their time spent on content than people did 20 or 50 years ago.
But what we produce as news has hardly changed. Read the rest of this entry
For those of us in traditional media, it’s the source of our problems, and it’s also the uncharted space of our new opportunities.
With bandwidth rising toward infinity and costs falling to near zero, it’s enabling all sorts of new content models to eat our lunch. “Free” digital bandwidth has enabled all of our disrupters, from early ones like Craigslist and Facebook and to newer ones like BuzzFeed, Instagram and SnapChat. And more will keep coming. Read the rest of this entry
It’s the Year of the Millennials, according to Pew. In 2015, at ages 18 to 34, they will surpass Baby Boomers in the U.S. to become the largest living generation. And a major new report by the Media Insight Project, just released at the NAA mediaXchange, sheds a lot of new light on their consumption of news.
The report (pdf, html) emphasizes the bright side, stressing the finding that most Millennials do value news and consume it regularly. But the most worrisome finding for newspaper companies is that they rarely go to traditional news providers to get it. We are far back in the loop, when we’re in it at all. Read the rest of this entry
Media folks, can we all agree on this statement?
- We’re in the audience business.
If you disagree, we need to talk, and we’ll do that in a minute.
But first, here’s the nut graf:
As an audience business, we’re overdue for a drastic rethink of what we do. Too often, we’re still doing 20th-century audience thinking amid the starkly different realities of the 21st century. We’re getting pounded on the audience front, and we have to figure out what audience strategies will work in this new environment. Read the rest of this entry
In the local media business, whatever hurts retailers hurts us, too. They’re feeling a big hurt right now, and we need to help them fight back.
That big hurt is a steady and continuous decline in store traffic. This means loss of sales, and that leads nowhere good for them — or for local media.
- Figuring out how the business has to change.
- Changing behaviors in the organization to get the new things done.
As most people in the newspaper industry can testify, both of these are difficult and relentless. There’s no “one and done” in a disruption as massive as the digital revolution.
And, unfortunately, success at No. 1 is no guarantee of success at No. 2.
Over last three years, I’ve blogged frequently about No. 1. This time let’s look at No. 2. Read the rest of this entry