Throughout this year, WAN-IFRA will highlight a number of publishers that are on the right track toward transformation. We are seeking global feedback on the traits necessary for successful change, as well as identifying those publishers to profile. Please contact us (email@example.com) with your suggestions. Here is some of the feedback we have so far...
Among the key metrics in transformation I look to:
- Percentage of reader revenue share compared to ad revenue. Reader revenue – print, digital and All-Access – is now more inherently stable and projectable than advertising. Once newspapers reach a majority reader revenue state, the pursuit of transition to a mainly digital reader gets easier.
- Percentage of expenses devoted to newsroom/content production. The best companies – both in the products they produce and in their business transition – clock in around 20 percent of total expenses. In the U.S., though, the average is 13 percent. Most newspaper companies have steadily decreased the quality of their print and digital products, while raising prices. I liken that to first selling a 2-liter bottle of Coke for $1 and then upping the price to $2 and cutting the product to 1-liter. That's what most newspaper companies have, in effect, done.
- Percentage digital and print revenue. This is a trickier metric, with it being easy to gain digital share, given the rush of print loss. Yet, ultimately, the need to get beyond 30 percent of revenue being digital – the NYT number – is key to transition. Again, the 50 percent majority digital revenue marker is an important milestone to be reached by 2018-2019. If that number can be achieved without reducing content-producing capacity, then a company is moving in the right direction.
- Percentage of digital ad revenue coming from branded content, a key metric for 2016-2018.
- Percentage of readership that is Millennial, with the aim of at least not under-indexing for this group.
Right now, I'm looking at a few qualities/criteria because they are really the biggest challenges that I saw as an executive editor of four newspapers for Gannett.
- New revenue ideas that work not only at large scale but also for smaller, locally focused newspapers. Digital rewards massive scale, but for local newspapers, even those in a group, their locally controllable revenue doesn't operate on Google/Facebook-scales.
- Growing mobile audiences and revenue. As I said in my most recent piece for The Media Briefing, if we cannot win in mobile, then I honestly believe that this will decide whether many newspapers have a long-term future.
- Reaching younger audiences – this was one of the key goals of Gannett's Newsroom of the Future reorganisation (which I fear will not be realised due to a failure to deliver real production efficiencies on the cost base they want). It's essential for some publications that are seeing the age of their average consumer rise by years every year. Some publications are literally dying with their audiences. And companies are going to have to develop strategies to reach audiences via messaging apps rather than social networks such as Facebook.
There are a number of areas where I believe a traditional news organisation needs to focus today, but here are three primary indicators that should reveal a mature transition taking place:
- A noticeable change in the collective focus of the company where driving a diversified, digital and sustainable business becomes the top strategic imperative and publishing a newspaper is just a part of that business. That requires a significant shift in working culture, leadership, the mindset, as well as new workflows, technologies, and forms of journalism.
- The ability to develop and transform traditional desktop advertising revenue to mobile revenue.
- The ability to leverage the traditional online traffic, frequency and reach a publisher has accumulated, as well as that on distributed platforms (social), into other parts of your business and create new business opportunities from those activities. This could mean new verticals, marketplaces, ecommerce activities, or altogether developing or investing in new (perhaps separate) digital businesses.
None of the below is especially new, but it’s rare to find all these qualities in one organisation.
- Jam today. A strategy that reflects the relative revenue contribution of legacy and new revenue streams (real contribution – not your hopes, dreams and slight of hand with the reporting documents)
- What you say matching what you do. Clear objectives, communicated well and throughout the processes (long- and short-term target plans, budgets, structures)
- Sell them what they want. Tactics that truly reflect the multi-media nature of our clients and partners needs and not just what we want to sell them, dressed up as market-driven sales strategies
- Tackle difficult truths with purpose. A willingness to expose the naked nature of the emperor and an atmosphere where difficult questions are openly discussed for resolution, not philosophical debate
- Prosecute ruthlessly and over time. So many initiatives vital today seem to disappear tomorrow. A weak strategy is made worse by ineffective prosecution. A positive strategy is made negative by weak prosecution
- Know your team strengths and hire accordingly. If you're weak at detail find someone who is not – The Devil, and his associate Mr Failure, are in the details (many of which lurk in the planning and fulfilment promise).
- Times and teams are a changing. In the 21st century multi-media madhouse, it's not enough to look and sound the part whilst you wave your brand in the face of the market. You need strong, smart, educated, motivated teams – the creation of which needs money and smart management.
- A willingness to analyse and measure activity, not just results. Formal questioning of activities including but, not only, an audit process for content* and especially market-facing teams and departments, that identifies and exposes activity metric levels and results. *A simpler and better alternative to Google analytics.
- Strategy for reaching and engaging the device-obsessed youth. An effective millennials reach and engagement strategy
- Good content, no matter the source. A true multi-media content strategy that incorporates channels and content paid and otherwise with a healthy 21st century policy toward paid and sponsored content
First, our broad hypothesis:
For a variety of reasons, we believe newsbrands need to refocus on their core audience, and reinforce their differentiated brand positioning. Print and digital advertising trends are largely moving in unhelpful directions, with some exceptions. We are not saying there will be no largely ad-funded news organisations in the future: there certainly will be, but their scale will tend to be smaller than their print predecessors, and there will be relatively few of them.
We believe more publishers will start to shift the management operating model from content provider to service offering. In the long term, services will come to be defined as retailers would think about them. Services will be measured by the quality of various content and access solutions (consumer ‘touchpoints’) delivered to a wide range of clearly segmented and targeted audience groups. Touchpoints, across a variety of brand manifestations, will be seamlessly stitched together. Like retailers, publishers will become obsessed with tracking user behaviour, and practically and quickly adjusting their touchpoint experiences to optimise provision. Services will improve every day.
Publishers will develop membership models, and they will finally eschew unhelpful language such as ‘paywalls.’ Mature membership models will offer free access as well as paid access, and may offer bronze, silver and gold service levels. Services will include content packages, personalised alerts and feeds, print (weekly digests?), social and interactive elements, events, ecommerce. Video will become an integral part of how they communicate. Publishers will work out how to effectively brand offsite content consumption (on Facebook, Twitter, et al).
Some news brands will offer specialist vertical services (health, environment, energy, education, etc). Some may narrow their remit to only cover one or a few verticals.
Some publishers will survive by entering alliances and collaborations, or become service providers – of news, opinion, features content – for other types of organisation.
Advertising will be replaced by a suite of private, premium marketing services, which will of course include advertising but will also include a range of content-marketing initiatives. They may set up private exchanges in collaboration with publisher and/or other media partners. Some publishers, or alliances, could effectively become agencies.
Publishers will incentivise a culture of innovation, and set performance indicators for audience and market development.
They will also measure their influence or impact on their audience, and wider social goals: no point doing all this to be a boring brand that consumers and businesses use but don’t care about.
Second, performance indicators we look for include:
- Revenue (split into user/member and marketing)
- Average revenue per member (or at least user)
- Profit – evidence of sustainability
- Member volumes; consumer touchpoint volumes
- Average duration per touchpoint
- Innovation metric (defined by each innovation)
- Influence and impact