Some parting words about what our industry needs to do
Folks, this may well be my last post — and I mean to try to land one more punch on the way out.
In the five years since I created MediaReset.com, I’ve tried once a month to serve up to our industry what I had learned and was continuing to learn about how to diversify our declining business and return to growth.
As I look back through the posts I’ve written, I see a rich backlog of ideas, possibilities and perspectives that still apply today, Some of these I was able to bring to fruition in my day job. Some I wasn’t, but I still believe they have important potential.
And now, for a combination of personal reasons, it’s time for me to stop.
There are two triggering causes.
First, Morris Communications, where I’ve been director and then vice president of strategy for the last 8 years, has sold its newspapers. (More about why below.)
When the sale process began early this year, my work — trying to find and implement new business strategies and initiatives for Morris Publishing Group — stopped. So I’m no longer trying to explore the margins and frontiers of the business.
Second, I’ll turn 67 in December. Retirement beckons. In January of this year, I reduced my work schedule to four days a week. Now, with the sale of the newspapers, that’s more than the company needs. So I will be reducing my work at Morris still further, going to an on-call consulting basis.
How are we doing?
As I step away from the business that’s been my career, as well as my father’s and grandfather’s, I wish I were more hopeful about its future.
There’s much that a newspaper company can be doing to diversify — to serve readers, advertisers and communities with great new solutions that could produce a growing business. But I see hardly any newspaper companies doing it fast enough to offset the steady decline of the core business.
On the content side, I believe great pioneering work could be done to make us indispensable to large and growing local audiences. But too many of our newsrooms are stuck in the news definitions of the past. See last month’s post for a recap of five years of ideas on what we can and should do to become more relevant.
The problem on the advertising side is less under our control. Now that virtually everyone in our communities is reachable digitally, ads simply don’t need news as a distribution channel. Ads can go wherever their desired audiences are, targeting individual characteristics and behaviors. Our print products and websites are still viable options for advertisers, but there are better choices out there.
We need to be making the advertising and marketing moves today to be viable in the near future, when print advertising will no longer be any business’s preferred choice.
Can digital save us?
The best newspaper companies — and I count Morris Publishing Group among them — have driven themselves hard for 20 years to get their share of the rising local and national spending on digital advertising and marketing.
The trouble is, our digital properties — websites, emails, apps, etc. — are tiny players in the vast digital space. And the digital giants, Google and Facebook, are increasing their already huge dominance.
Several years ago, the leaders in our industry pushed beyond selling only their own digital properties to selling everyone else’s, too. In our markets, we need to be the absolute best of all contenders at putting a business in front of the right potential customer, through all the most effective channels.
We can’t just be “newspaper companies” any more; we need to be the best digital marketing solutions companies our customers can find.
What should we be doing?
I’ve tried to describe this vision in many ways, and the potential arsenal of solutions we should be offering. To wit:
We could build or grow an ancillary business in events and event marketing.
We can develop digital marketing agencies, as I described here.
We can do all of the following, which I described in the linked posts: e-commerce, content marketing, data marketing, predictive analytics, in-store promotions.
If a newspaper company did all of these, could it reverse the revenue losses and actually start growing? I think it’s a real possibility. Any company that did all of this would have a much broader and more diverse revenue base, including multiple rising trend lines.
The problem is, doing even one of these initiatives requires vision and strong leadership at the top — and a big investment in people, training and technology.
Doing one or two of them seems to be about as much as most of our struggling companies can manage. The best companies might tackle three or four — and it still wouldn’t be enough.
I know this by experience, in the companies where I’ve worked. We’ve tackled as many innovations as we could, and it hasn’t been enough to reverse the declines in the core. Which brings me to the crucial strategy for closing the gap: acquisitions.
Today, many newspaper companies are still generating healthy profits, even though the dollars are shrinking every year. Any owner who is serious about returning to growth simply must plow a big share of those profits into buying related — or unrelated — businesses that are growing.
The acquisitions piece
I described that approach here, with reference to Procter & Gamble — and to Jim Moroney and the Dallas Morning News organization. Jim has been the industry leader at diversification, at least in the United States.
So, with all these strategies, could newspaper owners get those plunging revenue lines to turn upward? I think so.
But will they? I’ve seen enough to believe that most won’t. It’s a very tall order, requiring not only vision, courage and investment, but also scale.
How big is scale?
We didn’t have enough scale at The Monroe News, the single, stand-alone daily paper that my family converted to 100-percent employee ownership. Despite our best efforts to diversify revenues over a decade, we didn’t have enough resources or scale to reverse the trend. So, in 2015, it fell to me as chairman to lead the board in selling the company to GateHouse Media.
And scale is what, ultimately, we didn’t have enough of at Morris Publishing Group. Even with 11 daily papers and a long record of innovation, we weren’t able to reverse the trend. The sale to GateHouse was announced in August and closed at the beginning of October.
If you are an owner or a senior leader in this industry, I have to ask you — are you getting it done? Are you doing enough to offset the decline of the core? Can you? Will you?
In the throes of battle
When you’re fighting the good fight and you’re in the thick of it, it’s easy to believe you’re doing all you can do — and to hope it will be enough.
But if you’re not offsetting your revenue losses, I urge you to think again. Whoever said, “Hope is not a strategy” could have been talking about the newspaper industry today.
If you’re staying in the business, it’s time to double down on diversification — through content innovation, advertising and marketing innovation, and acquisitions beyond the boundaries of our declining core business.
I’ve been preaching this way for 12 years now, and I feel that I’ve done what I could. It started with the Newspaper Next project from 2005 to 2009, in which I taught new innovation strategies to more than 5,000 people in the industry in the U.S. and around the world.
It continued at Morris Publishing Group from 2009 to this year, where I got to explore and help to launch a big handful of innovative programs, products and strategies.
And for the last five years, I’ve done my best to share my learnings through Mediareset.com. I hope you and others have found these posts helpful.
Now, it’s over to you.
I’ll leave my blog up for the indefinite future, so my work here will remain available. And I’m thinking I may write one more post in a month or two, speculating on what might happen a decade or more in the future, if newspaper companies as we’ve known them cease to exist.
Until then, farewell.
To contact me: steve.gray[at]mediareset[dot]com
Posted on November 28, 2017, in Advertising, Audience, Big Data, circulation, Content, content marketing, Digital media sales, Disruption, e-commerce, innovation, investment, Journalism, leadership, management, marketing agency, Media business model, media management, media ownership, News, Revenue, Sales, selling a media company. Bookmark the permalink. 4 Comments.
Thanks for your very helpful posts on this blog. The last one should be required reading in every newsroom and publisher’s office.
Thanks for all your work on the site over the past several years. It’s always given me good food for thought. Sad to see it coming to an end — but congratulations on a well-deserved retirement. I really appreciate your contributions to a sustainable path for community news.
Enjoy your transition! All my best, Ken
Interesting summary of the challenges facing newspapers, or whatever we want to call them these days. Best wishes for your retirement!