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.
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.