BEN SHAW

Newspapers & Technology Magazine - - Contents - ▶ By Ben Shaw colum­nist

All of us want to build a sus­tain­able dig­i­tal busi­ness model for qual­ity jour­nal­ism. And we need the right peo­ple that have been em­pow­ered with the right knowl­edge to make that hap­pen.

As I work with news pub­lish­ers, I hear that dig­i­tal rev­enue growth con­tin­ues to be un­even. And par­tic­u­larly in the Amer­i­can and Euro­pean mar­kets, the pace of growth has still not matched the de­cline of print.

Af­ter help­ing and learn­ing from hun­dreds of the best me­dia com­pa­nies around the world, my WAN-IFRA team has col­lected a con­sid­er­able num­ber of in­sights into the state of the art in dig­i­tal me­dia. And last year we asked our­selves which of these were truly trans­for­ma­tive for com­pa­nies.

What ideas are so vi­tal that dig­i­tal suc­cess can't be sus­tained with out them? We have iden­ti­fied six key pil­lars that pub­lish­ers have to get right to en­sure a suc­cess­ful dig­i­tal me­dia op­er­a­tion. These six pil­lars are: strate­gi­cally di­ver­si­fied dig­i­tal rev­enue sources, reader rev­enue, ac­tive par­tic­i­pa­tion in ad mar­ket­places, an en­er­getic ap­proach to dig­i­tal sales, a busi­ness fo­cused data strat­egy, and a cul­ture of in­no­va­tion.

Let’s take a look at why each one of these ar­eas is key to your op­er­a­tion.

Strate­gi­cally Di­ver­si­fied Rev­enue Sources

Dig­i­tal suc­cess is al­ways based on ex­e­cut­ing a sound dig­i­tal strat­egy

In the last 10 years the only pub­lish­ers who have been dig­i­tally suc­cess­ful have been the ones that de­vel­oped a dig­i­tal strat­egy and who have been com­mit­ted to ex­e­cute it. Why? Well, in dig­i­tal we have a com­plex product with at least two USPs: Con­tent and Tech­nol­ogy. These must be strate­gized and de­vel­oped to­gether. And we are in a highly com­pet­i­tive mar­ket where the rules of the game are speed and in­no­va­tion.

If you do not have a strat­egy align­ing all the in­ter­de­pen­dent ca­pa­bil­i­ties of your op­er­a­tion like tech­nol­ogy, cul­ture, skills, con­tent, product, etc. while each of those sin­gle ca­pa­bil­i­ties are de­vel­oped, they will never pay off into the com­pet­i­tive ad­van­tages that you have iden­ti­fied as ne­ces­si­ties for growth.

Reader Rev­enue

Only very few news­pa­pers that fo­cus on qual­ity jour­nal­ism will be able to sur­vive on ad­ver­tis­ing alone. Pub­lish­ers must de­velop a sub­stan­tial rev­enue stream from their read­ers in or­der to have a sus­tain­able busi­ness model.

The CEO of the New York Times, Mark Thomp­son said, “The plain truth is that ad­ver­tis­ing alone will not sup­port qual­ity jour­nal­ism.”

While na­tional and some big re­gional news­pa­pers are show­ing pos­i­tive trends and quite good num­bers it is clear that first movers tend to be mar­ket lead­ers and show good growth. How­ever, many re­gional brands are still fo­cused on trans­form­ing print sub­scribers to dig­i­tal.

For most lo­cal news­pa­pers, how­ever, the over­all paid con­tent per­for­mance is weak. There are many dif­fer­ent rea­sons for this: they of­ten started too late or have dif­fi­cul­ties defin­ing the con­tent that re­ally dif­fer­en­ti­ate them in the com­pe­ti­tion.

Lo­cal is a strength, but not a niche in it­self. The most im­por­tant ques­tion for any pub­li­ca­tions want­ing to go into or re­launch paid con­tent is to an­swer: what in your of­fer is re­ally driv­ing en­gage­ment in our lo­cal com­mu­nity?

We are liv­ing in times of grow­ing streams of news and views of ex­tremely var­ied qual­ity, where fake news is just one prob­lem. Com­bined with the growth of hate speech and slan­der, many turn to more tra­di­tional and trusted brands for news.

This trend shows that the core of our jour­nal­ism – good and trust­ful sto­ry­telling, analysis, expert com­ments, in­sight­ful opin­ions, and ex­clu­sive

in­ter­views – is a valu­able product and does con­vert read­ers to sub­scribers.

We should be con­fi­dent about what we pro­duce and be will­ing to put a price tag on it.

Ac­tive Par­tic­i­pa­tion in Ad Mar­ket­places

It’s hard to be­lieve but the first decade of on­line ad­ver­tis­ing was largely de­liv­ered man­u­ally. Pro­gram­matic ad­ver­tis­ing grew up out of the de­mands of pub­lish­ers in the 2000s, mar­ket­ing their rem­nant in­ven­tory and fac­ing chal­lenges to man­age net­works to op­ti­mize yield.

What I like to call ‘Phase 1’ of pro­gram­matic came from pub­lish­ers try­ing to make sense of all the net­works bid­ding on their in­ven­tory, even­tu­ally man­ag­ing this in real time.

Now it’s pos­si­ble to tar­get and charge more for those same im­pres­sions. And even bet­ter, it’s pos­si­ble to go from bid to close within 30ms, which is func­tion­ally real-time, in a process called Real Time Bid­ding or RTB. All this has driven a huge yield ben­e­fit.

But be­fore you can un­der­stand ex­actly how much more you can earn, and how this stacks up against your di­rect sold in­ven­tory, you need to un­der­stand the ecosys­tem.

An En­er­getic Ap­proach to Dig­i­tal Sales

A peren­nial ques­tion for pub­lish­ers is how to struc­ture your dig­i­tal sales op­er­a­tion. Should it be com­bined? Should it be stand­alone? There are many ex­cel­lent ar­gu­ments for each and al­though it would seem like the ar­gu­ment for stand­alone makes the most sense in the US, the real an­swer is both!

A say­ing I re­mem­ber hear­ing years ago still holds true for dig­i­tal sales to­day “When the mar­ket is per­form­ing cor­rectly, then you have found the right struc­ture” Re­gard­less of the cur­rent struc­ture, me­dia man­agers must have com­pelling pack­ages be­ing sold by en­er­gized ac­count ex­ec­u­tives who clearly un­der­stand the of­fer­ings and what is ex­pected of them. How a sales process is de­signed and will be vi­tal to the suc­cess and growth of a dig­i­tal op­er­a­tion.

A Busi­ness Fo­cused Data Strat­egy

Dig­i­tal it­self con­tin­ues to trans­form. Just think, in about a decade, Face­book has more than 1.5 bil­lion reg­u­lar users, smart­phones are a part of daily life, and pro­gram­matic ad­ver­tis­ing ac­counts for half of all dis­play ad­ver­tis­ing.

The trans­for­ma­tion and dis­rup­tion of the on­line land­scape should show us not only how quickly things are mov­ing in on­line ad­ver­tis­ing, but also how cen­tral data has been to push­ing our in­dus­try for­ward.

Af­ter all, it is data that has helped com­pa­nies like Face­book turn their huge au­di­ence into suc­cess­ful busi­nesses; data that has al­lowed mar­keters to reach the right peo­ple across mul­ti­ple de­vices; and data that has been the pow­er­ing force of au­to­mated on­line ad­ver­tis­ing.

If you’re not us­ing data in your ad­ver­tis­ing de­part­ment to stay ahead of both con­sumers and changes in the plat­form land­scape, then you’re go­ing to find that you will ul­ti­mately lose out.

It is no longer true that peo­ple who work di­rectly with the data are the only ones who need to un­der­stand how it works. Ev­ery op­er­a­tions per­son, ev­ery sales­per­son, ev­ery ed­i­tor and even ev­ery ex­ec­u­tive should have a ba­sic un­der­stand­ing of data and how it can be used to im­pact dig­i­tal ad­ver­tis­ing and rev­enue.

A Cul­ture of In­no­va­tion

In­no­va­tion is a process and de­sign is a liv­ing ac­tiv­ity, it's not an end re­sult.

It is on­go­ing, it's con­tin­u­ous, it’s al­ways look­ing at op­por­tu­ni­ties or prob­lems, it’s seek­ing to clar­ify, it’s ex­plor­ing so­lu­tions in new ways, it’s rapid pro­to­typ­ing so that we can find the core ques­tions and so­lu­tions. And then take that knowl­edge for­ward into the next ver­sion.

Not ev­ery com­pany can run out and fund a startup but there are other more af­ford­able ways to ini­ti­ate in­no­va­tion which of­ten hap­pens when dif­fer­ent peo­ple get to­gether to brain­storm and cre­ate.

These six pil­lars will no doubt be im­ple­mented in many ways based on com­pany and mar­ket dy­nam­ics, but one thing is sure, with­out each of these present, pub­lish­ers will not see the dig­i­tal growth that is needed to sus­tain our in­dus­try in 2017 and be­yond.

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