Print Media Doom Part 2: Lack of Vision and Strategy = Epic Fail
We’re on a road to nowhere
Come on inside
Takin’ that ride to nowhere
We’ll take that ride
Talking Heads, Road to Nowhere (1985)
Using the Ostrich Method: Keep your head in the sand baby – this will all be over soon!
Let’s face it, no matter what industry you are looking at – poor vision and limited strategic planning = playing in reactive mode all of the time. I was at a conference in Las Vegas once (yes, I attended the actual conference) and the CEO of Vonage (Jeffrey A. Citron at the time) said something to the effect of, “if your competitors can do everything you can do, and you can’t do what they can do – you have a problem.” The same can be said for the print news industry. The Technology Revolution has been rapidly changing the makeup of many things for years including the two critical components which make up the print news revenue stream:
1 – How people consume information
2- Where advertisers spend their money
The ‘digitization’ of these two areas has evolved so rapidly that those who had neither the foresight to recognize the sea change or invest ahead of the curve are now left holding the bag as others profit on their loss.
Lack of Vision and Strategy – What Search Engines Saw That Newspapers and Magazines Didn’t
If you don’t know what your vision is, how can you ever build a strategy and tactical plan to get there? In my experience – if you want to build any type of short, mid or long term strategy – you need to begin with a clear vision. A simple, yet concise statement or set of statements that help to set guides around the balance of your strategic planning. Building a vision allows you to start with a framework for your goals, objectives, strategies and tactical plans that will get you there. All of these things put together will set the stage for building a balanced scorecard to measure your success (or failure) vs. your stated vision and goals.
The Search Engine companies all had a similar strategy; people want to find stuff, so let’s advertise those same things while helping them find that stuff. As we can see in the graphic below, overall Internet Ad revenue has been increasing by a compound annual growth rate (CAGR) of nearly 20% over the last 10 years. The Top 10 leading companies accounted for 72% of total ad revenue last year – a figure that is reasonably consistent over the prior 10 years. Search revenue alone accounts for nearly half of the total meaning the Googles/Yahoos/Bings of the world dominate this marketplace. To put things in perspective, remember traditional print news media accounts for a minuscule $2.2B of the total or ~6%. And they are happy about getting even this much!
Source: IAB.com – US Internet Advertising Revenue Fy2012, PWC report
Now let’s look at how the top Internet Ad Revenue generating company has performed in a similar time frame on a worldwide basis:
It’s easy to correlate between the rise of the digital ad revolution with the advent of a company that knew how to innovate and mine for those precious ad dollars.
The next graphic (courtesy of Alan Mutter via Reflections of a Newsosaur) illustrates the correlation between Google’s success and the Newspaper industry’s decline perfectly:
Source: Reflections of a Newsosaur
With the continued rapid expansion of internet technologies, along with ease of use brought on by new devices, more bandwidth and network expansion/improvements – the effects of the digital age can be seen on ‘analog’ businesses like newspapers and radio.
Below, we can see that Advertisers are fleeing Newspapers as a primary medium and switching over to alternatives that are more effective, and cheaper from a CPM (Cost per Impression) perspective.
Newspapers have gone from being the top dog in 2005 to the dog house in 2012. Why? Lack of a defined Vision and Strategy. Nobody saw what was coming or they chose to ignore it and waited patiently for advertisers to return. Many blamed their departure on the macroeconomic issues plaguing the US in beginning in late 2008. In Ken Doctor‘s excellent article in the Nieman Journalism Lab – ‘The Newsonomics of the magic formula in 2012‘ – he cites several relevant examples of the decline and/or lagging digital ad revenue numbers for traditional print media outlets such as newspapers and magazines. Doctor writes, “…it’s not that the money isn’t there — they just haven’t transitioned their businesses enough to compete for it.”
Newspapers have represented more ‘traditional’ businesses with stodgy models lacking foresight and have been slow to move and adapt to cultural and technological changes. While companies like Amazon were figuring out how to get your books, toys and even groceries to you quicker/better/fresher/through the air – newspapers were trying to figure out how to save money by doing things like outsourcing their delivery arms so they could both save money and still ensure that someone could still toss a newspaper onto your doorstep by 6 am. The focus for newspapers has been to improve operational efficiency (which was/is still needed) but not on technology and innovation. You have to spend money to make money and you can’t survive by cutting alone. Many newspapers and magazines have failed to see this point of fact.
There’s a great deal of irony in the fact that while many newspapers contained segments reporting on the latest innovations in technology, products and the onset of the digital age itself – they weren’t reading their own content! Now so many newspapers are cash poor and they can’t afford to even play catch up in order to level the playing field.
No Vision + No Strategy = You Lose
“Only the dead have seen the end of war.”
George Santayana, Soliloquies in England and Later Soliloquies (1922)
Without having any semblance of a clear vision – many newspapers have been left in dust and have subsequently folded over the past few years. I think the simple formula below says it all
(No Vision + No Strategy) = Living in Reactive Mode vs. Competition = You Lose (always)
When you are forced to play catch up because you haven’t built a plan to compete – you cannot win. You’ll end up eating away at your cash reserves until they have dried up. Then you either have to sell (if you can find a buyer) at a fraction of your former value, or you have to light a match. The game that many newspapers are playing now is one of catch up to get to where others are today. What they aren’t taking into account is that by the time they get caught up to today – it might be 2017 and the cheese will have moved yet again. It’s akin to showing up at a party after everyone has already gone to the club and no one sent you a text you to say where they were headed.
So what should they do??
Here are some key plans, ideas and rules to live by that I’d recommend to any publisher (or any C-Level Executive for that matter)
- Build a 5 year vision, strategy and a fiscal plan that allows you to survive that long, remain profitable (even with lower revenue) and invest in new and bleeding edge technology.
- Build an integrated strategic plan that looks 1-3-5 years ahead – not just for today.
- What you do today needs to be tied to your overall vision and strategy. Always be asking – “What will our actions today do to help you get to what you envision tomorrow to be?”
- Get buy in and sponsorship from Executive leadership first. If they don’t talk the talk – they will never walk the walk and they will undermine you all along the way.Hire top talent from hotshot firms focused on social media and marketing.
- If you see this happening, make changes swiftly before the cancer spreads. The patient is already dying.
- Hire technologists that understand today’s technology concepts and have a handle on where the future is. Overpay them.
- Hire technology leaders (CIO’s) that can articulate the vision, build the strategy and manage teams that can execute the tactical plans.
- Follow the Carpenters golden rule – “Measure twice, cut once”. Don’t do anything without being able to quantify success and measure your progress towards it.
- Ensure that you are always looking at your plan vs. market factors, technology and what your customers are doing.Don’t be afraid to kill projects or ideas that aren’t working if the market or your customer base shifts. If there’s an innovation worth pursuing – examine it and do it if it fits your vision and strategy. There’s nothing worse than throwing good money after bad.
- Don’t be afraid to dodge/parry/attack along the way. Strategies are guideposts which should be checked often and adjusted as necessary.
Without a clear vision, strong set of strategies and a clear, measurable tactical approach – newspaper companies will continue to fail with their general business model. If they continue to try and cut here and sell off assets there they will die a slow, painful death vs. taking a quick bullet to the head.
Check out my next article in the series to learn more about how newspaper companies might actually innovate and create new products and revenue streams. Now there’s a novel concept!