Newspapers have been under pressure to evolve and define a new economic model as they face unprecedented changes and at the fastest pace they’ve experienced. Borrell Associates projected local online ad growth to be at 450% from 2013 to 2018. This growth rate is arguably unsustainable, but it’s the fact that the traditional local media revenue has been hurting while online ad spending is rapidly increasing. There’s a huge shift of ad spending to online. Numerous pure-digital players, big and small, fight to enter the local market space with many innovative ways to win over the local audience. They offer the consumers a multitude of creative services in curating local news, building and engaging local audience with local interest, native advertising, franchising ad sales, etc. The competition is expected to increase fiercely over the next five years through partnerships and marketing programs. This market condition forces the newspaper to evolve or die. With this high pressure of marching on an unpaved path, newspapers need to be clear of their assets, competitive advantages and the core competency to serve the modern consumers. With a good understanding of external forces from the consumers and competition, newspapers can confidently make the necessary shifts and reposition themselves for growth.
The news industry is disrupted by the change of the consumer behavior in the way of how news is consumed. Consumers now have many ways of receiving news, on-the-go and at the desk, in near real-time and across multiple channels. The trend is to allow readersto receive the choice of content, delivered in the most effortless way with the most relevancies. These are the key factors to engage the audience and keep their interest. Keep in mind that technology cannot be the solution. It is a powerful underlying enabler to a solution, but it is not the solution itself. Jumping to a technology without clarity of the purpose often results in a short-lived initiative. The purpose needs to meet the new consumers’ needs for building and retaining the audience. This is the basic but often gets glossed over as the panic for change takes control.
With the consumer focus, pushing the content and ads to the consumers is quickly losing value. Letting the consumer choose the content and wrap the content with relevant ads in the most effortless way is the new rule. If publishers take a look at what they know as their core audience, both in news and advertisers, then map them to the changes of the new audience behaviors, they’ll arrive at a baseline of a new model. Let the audience drives your news consumption with what kind of news and how to receive news. Meeting the new consumer needs is the unshaken foundation and from there, the revenue model can layer and evolve confidently.
With that, I’ve identified the five key elements to change toward a new consumer focus organization.
1) Culture. “That’s how we do things….” This attitude must go. The new culture must embrace changes by asking the question of how we can better serve news to our readers, and how can we better serve our ads to the local buyers. Attach the “how” question with clear measurements and use the numbers as the feedback to all new programs. This exercise allows the team to discover that the new requirements of readers and advertisers are evolving in the marketplace. This practice forces the team to be in tune with the community and their changing demands. It starts at the top and requires a new “belief” system that takes the control away from internal operational focus into the consumer centric culture. Once this focal point is shifted, the purpose and need for flexible thinking and creativity naturally surface.
As local media outlets wake up to a steep learning curve across all functional areas, there’s a sense of panic. Decisions get made by following others rather than having a deep understanding of the program’s purpose. Rather than letting the situation be a panic, make a simple culture shift to embracing changes with a never ending learning approach. Every aspect of the business must share the same receptive and progressive attitude. In this fast pace modern world, don’t wait for a proven answer with all the facts because that’s the trailing culture and someone else is winning the competition. Just follow the audience, take actions with clear purposes and expected outcomes, and repeat it. The movement of continuous improvement from field feedback is the key element to a winning culture and finding the resolution.
2) Relationship and Connection. Local media outlets have two types of customers: the readers and the advertisers. These relationships are built over time, and are probably the biggest competitive advantage over any pure-play digital competitors. Both of these relationships are established and sustained by the core business of producing news and connecting advertisers to the community. The business model is to cultivating both of these relationships and be the center source of bringing them together in a community. This means taking on the community leadership role to complete the circle of community members. The leadership role has now been challenged. The spokes connecting these relationships together in the community have been robbed by the outside pure play digital companies. They have provided multiple platforms directly connect the advertisers to the consumers, devaluing the importance of the local media’s role. This appears to damage the relationships that have long been nurtured. In reality, the relationship is still there, it’s only the way of connecting the community together has been damaged. The broken spokes are the channels between the news and the readers, the advertisers and the buyers.
The connection has outlets must evolve with these relationships in mind, and not only meet their needs, but rise to a new level of business consultation in protecting the accounts from the temptations of others. Like every relationship, local media must listen to their community more than ever as the everyone is constantly being distracted and promoted by new players with newer value proposition every week. Loyalty becomes challenging to preserve. It can’t be taken for granted but competitively earned. The only position left is to rise above the noise with the highest quality of content and support for the local businesses. that’s the key value and trust that local media brings to the local businesses and their community.
3) Knowledge. Customer knowledge means DATA and DATA. Knowing about the readers and advertisers is the key to all the building blocks for a sustainable media business model. Media companies builds community and connect people together. Know the purpose and it’s the connection that drives revenue. Serving the community is only one part and if it doesn’t get carried through with connection, then it’s a non-profit business. To make the connection, relevance is everything to the impatient consumers these days. That means information delivered to the consumers needs to be relevant to their needs and desires in order to engage and earn an influential position. It’s beyond collecting the customer basic data, such as their email address and zip code. Here are a few data points that the pure digital players know about their customers; where they shop, what they read, what items they’re looking to buy, places they’re thinking for vacation and to eat out, etc. and not only at a moment in time but over a period of time to map out a decent picture of a customer.
4) Boundary. Think local, nearby, and beyond….The news might be local, but the audience is not, so let the work spread and reach into vertical interest groups, i.e., tourists, nearby businesses, nearby towns, etc. Buy Local has been a great marketing campaign, with the supported economic numbers showing benefits of 8x the amount of spending stays local before it leaves. This is a powerful reason to buy local. However, don’t inadvertently limit targeting others at the nearby towns to spend in town. The boundary is not your circulation, but rather where your audience is and can be. Local businesses want to reach beyond their town, even when they ask local people to support the local businesses. The Internet has removed the geographical boundary and changed it to an interest boundary for consumers. Follow the consumers and your revenue will follow.
5) Transparency. Management and team members need to communicate and share knowledge internally and externally. The pace of the external changes in the marketplace drives the need for tighter communication among leaders and team members. If the speed of changes is crucial to the success of evolving, communication becomes the grease for all moving parts to stay on the same page and pace.
Innovation comes from each other’s ideas, and gets built into something new and executable because they come from the team members, themselves. Break down all walls, especially the one between the newsroom and advertisement. Everyone serves one goal and that’s building value for the company.
Transparency is important not only for internal operation but it serves as a powerful way of leadership in the community. It brings the local voices into the programs and in turn, the community buys into the company’s direction. People like to feel they contribute to changes. The benefits also include the field feedback prior to launching a new program and minimize mistakes.
It’s crucial to communicate internally and externally about the company’s changes, the new programs and the impact to the people, government, school and organizations. It’s an opportunity to remind the community of your role in their day-to-day life, and go beyond what the do in the essence of who you are. No other business has a built-in marketing engine where it can talk about its own work as a contribution to the benefits of the people in their community. Local media outlets own a direct communication channel to their audience, and that makes it the most inexpensive and effective way to build a feedback loop of their changes. Let the audience understand the reason and impact of the coming changes and engage the audience to be a part of the new initiatives.