Strategic Imperatives for a Shifting Media Market

There is no doubt that the pace of change in the media business has accelerated. The digitization of content, low barriers to entry for content publishers and ubiquity of broadband networks is transforming the marketplace much faster than many would have predicted even five years ago. NAA’s Board Committee on Industry Development (BCID), since 1999, has been tracking media trends as part of its Horizon Watching Initiative, and offering strategy recommendations to help newspapers position themselves for the future. In January 2006, the BCID met to discuss a revised and expanded set of strategic imperatives for newspapers. Throughout this year and next, the committee will drill down on each imperative, flesh out strategy implications and identify media companies that currently execute each of the recommended approaches.

The ten imperatives recommended by the BCID include:

1. EMBRACE “LOCAL” AS OUR UNIQUE VALUE PROPOSITION AND THE BASIS TO BUILD “CONNECTEDNESS”

Maintain and grow strong, local-brand focus and build a stronger connection to, and community among, readers.
Provide information and services that help consumers make decisions about everyday needs.
Learn to build community in the “social capital” sense, by helping people connect constructively with one another.
Create the de facto online hub of local life, using both the newspaper and the community as vital contributors.
Expand advertising content to include more of the businesses where consumers actually shop, including local service providers.
Leverage digital platforms to compete with national players who are reaching deep into local markets.

2. MAKE CONSUMER IN SIGHT A COMPETITIVE ADVANTAGE

Become more customer-centric; expand and exploit local customer knowledge.
Aggressively invest in the systems and data to know customers intimately, and own the connection to local consumers.
Integrate all of the content, community and commerce offerings around peoples’ needs and interests, rather than our traditional publisher-centric viewpoint.
Identify new ways to segment your particular market, beyond just demographic and geographic definitions.

3. ADOPT A MULTIMEDIA MINDSET, VIEWING THE BUSINESS AS A PORTFOLIO OF PRODUCTS AND SERVICES WITH DIFFERENT BUSINESS MODELS, PRICING AND DISTRIBUTION STRATEGIES

Become the dominant, local “infomediary” by adopting a platform-agnostic approach to product, marketing and sales strategies, and deliver what various market segments want, when they want it, through a channel that best meets their needs.
Recognize and define your role in consumers’ entire news, information, entertainment and communications portfolio.
Develop multiple “core” products depending on what market segment you’re trying to reach.
Reevaluate pricing structures relative to how various products provide value and to your overall strategic goals.
Transform the relationship between print and digital products so that each reinforces the other and so each medium is used—to its best advantage—in a coordinated effort to fulfill the newspaper’s community and commercial missions.

4. TURN THE CLASSIFIED BUSINESSES UPSIDE-DOWN

Revise and expand the classified model by adopting a Webcentric strategy.
Position the Internet as the core platform to accept, store, manipulate and disseminate classified advertising.
Integrate classifieds into products that support specific communities.
Explore revenue strategies that include lead-generation and transactional fees.
Build or license world-class search capabilities.

5. INVEST IN THE IN FRASTRUCTURE AND TECHNOLOGY TO ENABLE NEWSPAPERS TO LOWER COSTS, IMPROVE SPEED TO MARKET AND MEET CUSTOMER SERVICE NEEDS

Adopt cost-effective processes to serve stronger, consolidated advertisers with changing needs.

Reengineer and streamline current ways of doing business to reflect new technologies and approaches.

Provide advertisers with self-service tools to place and manage advertising.

Provide consumers with tools that will make them partners in the sharing of information and perspectives.

Develop a new architecture to support massive amounts of content from massive amounts of sources on massive amounts of topics.

6. ALIGN THE ORGANIZATION WITH THE STRATEGIES, INCLUDING RO LES, PROCESSES, STRUCTURE AND TALENT

7. BUILD ROBUST NEW PRODUCT / BUSINESS DEVELOPMENT CAPABILITIES TO GROW NEW REVENUE STREAMS

8. BUILD WORLD CLASS SALES AND MARKETING CAPABILITIES

9. ADOPT MORE CONSISTENT PRODUCT AND OPERATIONAL STANDARDS TO SERVE MULTI-MARKET ADVERTISERS, PARTICULARLY IN PREPRINTS

10. COMMUNICATE NEWSPAPER STRENGTHS AND BUILD APPROPRIATE METRICS TO DEMONSTRATE AUDIENCE DELIVERY

For more information, visit www.naa. org/horizon or contact Randy Bennett at randy.bennett@naa.org.

Strategies in Action

Many pioneering newspapers have already adopted strategic imperatives outlined in this report. Following are a few examples of those strategies. The Horizon Watching Initiative will begin identifying other media companies who are executing on these strategies.

Embrace Local: Enterprise NewsMedia, the Quincy, Mass.-based publisher of The Patriot Ledger, The Enterprise, SouthofBoston.com and 23 community newspapers, is building a network of community-based sites under the brand “Wicked Local.” The sites will integrate calendar applications, staff-written articles from across their media properties, user-provided content and a comprehensive, local-search capability. The sites will be supported by self-service, paid-search listings and business directories.

Portfolio Strategies: The Arizona Republic, which has acquired or launched more than 30 new products in the past three years, is rethinking the notion of “core” product by providing multiple products that will be core to specific market segments. For example, their strategy assumes their Web site azcentral.com will be the core product for 18-39 year olds, the newspaper will be core for 40-59 year olds, La Voz—their Hispanic publication—will be core for the Hispanic community.

Customer Insight: The Sacramento Bee has built a consumer market database that includes market-wide address data, household-level characteristics from Equifax and data from the Bee’s own customer files, including print subscribers and online registrants, private-party advertisers, and recipients of their Hispanic and other niche products. The database provides insight into existing market reach and potential new opportunities and allows them to sell across their media properties based on advertisers’ desired market segment.

New Product Development: The Dallas Morning News developed a formal, new-product development process that resulted in the successful launch of Quick, their free, youth-oriented weekday product, in November 2003. The process involved brainstorming of new ideas at the front end, research to evaluate the top concepts, creation of a permanent product team to build prototypes and a business plan, research to validate their business case and the launch and tracking of consumer usage.

Re-Aligning the Organization: To improve circulation performance and better manage a broadening portfolio of products, The Spokesman-Review, in Spokane, has dismantled its circulation department and reorganized under three focus areas: distribution, administration/auditing/compliance and subscriber acquisition and retention. In addition, the newspaper moved their database marketing staff into a cross-departmental group called “the hive,” whose primary role is to manage consumer data across the organization.

Create and foster an organization that encourages innovation and newproduct development, rewards risk and has a sense of urgency to win in the evolving media marketplace.

Revamp performance-management processes and systems; reevaluate the metrics of success (i.e. market share, growth vs. profit margins).

Revisit resource allocation practices.

Develop better pipelines to key talent, and refine pay and benefit packages and rewards systems.

Adopt a formal, new-product development process that supports overall strategic goals.

Focus on the building blocks; develop strategies that monetize individual stories and customers.

Bring the newspaper, especially the newsroom, into an open, interactive conversation with the community, with journalists both leading and participating.

Develop products to reach niche markets, such as young consumers and Hispanic communities.

Rationalize our go-to-market strategies: face-to-face, telephone marketing, direct mail.

Enhance selling skills and professionalism.

Be easier to do business with.

Be able to demonstrate our effectiveness to drive traffic to all of our customers’ channels.

Tell our story in a compelling way and talk with customers and agencies regularly.

Reach out to new advertiser categories.

Innovate our offering across ROP, preprint and online.

Improve knowledge of how multimarket advertisers run their businesses and how they spend advertising dollars.

Reflect changes in the role of multimarket decision makers.

Continue the development of industrywide specifications and benchmarks, particularly in preprints.

Make strategic investments in tools and people to anticipate the demands of insert advertisers (i.e. zoning, ROI metrics, process reliability and improvements).

Improve the message being conveyed about the industry.

Upgrade the credibility and usefulness of advertising metrics to demonstrate the effectiveness of the medium.

Work with advertisers on how to use newspapers to increase the ROI of their entire spending mix. Newspapers have the leverage, brand equity and cash flow to transform their organizations, better serve existing customers and attract new ones. The challenges are the will to change and a sense of urgency to change quickly. Over the next 18 months, we will identify those media companies who have demonstrated that will and are innovating aggressively to better serve consumers and advertisers.

First Published:
April 1, 2006

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