Hope on the Horizon
To anyone who cares about newspapers and magazines — their publishers, their readers, their employees, the marketers who advertise in them, and those who recognize the value of journalism to a vibrant society — the situation seems dire and unsolvable.
But there is a way forward for print media companies that can help them adapt their business models to succeed in the new digital marketing environment. It is already visible in the efforts of some innovative players. A growing body of research — tracking media companies that are succeeding in the new marketing environment and leading marketers who have successfully pursued innovative new digital strategies — suggests that at least four strategies are available for the media company of the future.
The first strategy is to develop deeper relationships with readers around targeted interest areas. This builds on a strength that has always been at the heart of publishing: Strong print brands enjoy a trusted relationship with their audience; readers are loyal to print publications because they provide high-quality content about specific interest areas. Digital media afford opportunities to deepen and extend those relationships.
The second strategy is to tap into revenue streams beyond advertising and circulation. New publishing models will include marketing services such as custom content, consumer insights, and lead generation, and new offerings for customers such as premium content and data-based applications.
The third strategy is to reinvent the content delivery model (with a particular focus on lowering costs) and to emphasize a “profitable core” of unique and brand-defining material. Print media companies need to avoid the formula-driven approaches to cost cutting that have been prevalent so far, and instead adopt approaches that better align their cost of content with the revenues generated.
The fourth success strategy for the media company of the future is to innovate with new products and pricing models. As the pace of change continues to quicken in the digital world, as new devices for accessing printed content continue to emerge, and as new applications are developed to exploit online content, this will lead to as-yet-untapped opportunities for media companies.
We believe that companies that pursue these four strategies can have an attractive future if they make the most of these new opportunities while building on their traditional strengths. But to do this, says Aaron Shapiro, a partner in the digital advertising agency Huge, publishers will have to act as both startups and incumbents simultaneously. “It will take aggressively fresh thinking,” says Shapiro.
The print media companies of the future will need new capabilities, but none are beyond their reach. After all, publishers have often reinvented themselves. From tabloid journalism to photojournalism to slick magazines to the earliest online forums, magazines and newspapers have found successful ways to respond to new technologies and shifting audiences. Some will do so again. This time, however, nothing less than a fundamental transformation is needed in the way media companies see themselves and the capabilities they invest in for the future.
In the following sections, we examine the four success strategies in greater detail.
1. Build Deeper Relationships
Leading marketers recognize the power digital media has to start conversations with consumers. These marketers are pushing the boundaries of digital innovation, investing in their own Web sites, mobile applications, and interactive kiosks in stores to deliver more targeted content for consumers. (See “The Promise of Private-label Media,” by Matthew Egol, Leslie H. Moeller, and Christopher Vollmer, s+b, Summer 2009.) Procter & Gamble has built its own digital media assets in the home and beauty category, Nike targets runners and other athletes, and Diageo helps young adults find bars and nightlife. Companies with such private-label media offerings typically spend more money on them than on conventional digital advertising. In many cases, private-label media are designed to attract registered users, growing marketers’ own databases and enabling them to better target marketing messages and offers. These marketers recognize that — as important as advertising is to growing and sustaining a brand — the impact of that brand is based on much more than impressions delivered via advertising.