The various musings of Michael Hiles

Newspapers and Traditional Media STILL Trying to Figure Out Digital

Traditional media is still trying to figure out this digital thing. A few days ago, a friend and business colleague posted a link to her Facebook account. It was a news article about how the Dallas Morning News was “going digital”, and essentially “starting over”.

After conducting an internal survey, the paper published a report that contained the following quote:

We won’t let the Rock of Truth crumble. Not on our watch.

The Dallas Morning News urgently needs sweeping change. Because we haven’t had sufficient evolution, we now need a revolution.

Our entire approach to telling, presenting and promoting our stories has to change to serve our increasingly digital audience. Every job in the newsroom must change. We must set different priorities.

If we cannot find a way to make digital a compelling experience that is compatible with the daily lives of our readers, then not only will our fortunes decline, so will our public service.

We must act.

The future is digital. In fact, the present is digital — and we’re missing out.

The conclusion the Dallas Morning News came to was they had to completely start over from scratch – literally just like any other blog or content-focused website.

This means things like asking people to re-apply for their existing jobs, giving early retirements, and simply letting people go. It’s a huge culture shift.

In fact, traditional media still struggles with the entire shift from single-channel, one-to-many publication vs. multi-channel, many-to-many engagement model.

Editor & Publisher Magazine Interview

Way back in 2000, I was interviewed by Editor & Publisher Magazine for a feature print article that went out to their paid subscriber base. The conversation was about the growth of internet users and what it meant for the news print publishing business.

I belonged to an email list-serv discussion group called Online-Ads, which dealt with the intricacies of online advertising at the time. This was 2000… things were a lot, ahem… different back then. They were also infinitely more complex from a technology perspective. We didn’t have Node.js, NoSQL, code frameworks, HTML 5 and CSS to pretty things up.

A the time, there were about 2,000 subscribers to the list – and the discussion topics were heavily influenced by traditional media. I had this mob of other tech people clamoring on about how the paper was dead, etc… And yes, they have indeed almost died. But this was in an era when people still “got online” by installing software they got from a CD attached to print magazine covers or in the mailbox. The true “death of the newspaper” was still a long way off into the future – despite some of those community folks who were claiming that email was going to kill them in a year or two.

Being the consummate troll that I can be, here I am the digital tech guy ACTUALLY DEFENDING THE NEWSPAPERS. And I had damn good reasons.

I was approached by Jennie Phipps, a writer for Editor & Publisher Magazine, who had been following along the flame war. She wanted to include me in a feature she was researching because she liked my take on the industry. So after a polite email exchange, we schedule a couple of hours to chat on the phone. (people actually did talk to each other back then)

In the interest of print space, what didn’t get published out of our interview were some other key points.

At the time, there was so much traditional ad spend, it was going to take many years for that money to move to digital.

Not months. Many years.

The sheer volume of ad budget simply didn’t have anywhere to go. In part, it was fueling some of the speculative growth of the .COM v.1 era. Forward-thinking marketing folks were staking their claims early with banner ads and early search marketing spend.

The Death of Display Ads

The other reason I contended the newspapers weren’t going anywhere was the fact there was already an established, regular editorial content production model. Newspapers (and all traditional mainstream media) rely upon generating eyeballs so they can sell advertisers on the visibility.

That model hasn’t really changed since the earliest of trade merchants were “content marketing” by printing handbills and hanging out signs. Get enough eyeballs on the message and someone will eventually buy something.

Modern Business Models for Legacy Media Channels

In the article about the Dallas Morning News, one of the unanswered questions was that of “what to do with the print”?

Yeah, about that cap cost… I’m not sure what to tell you. I know printing presses are expensive machines – even in the digital era. I’m sure most of these companies have amortized the equipment depreciation already.

Now that we’re in 2016, the eyeballs have shifted. Very few people actually read the newspaper anymore (and I suspect those who buy them are looking for coupons or older demographics who don’t use social or mobile).

The content production teams are still working away at the newspapers – but those who are responsible for leading the business haven’t quite figured out their new business models.

When you look at content producers that have done well in the digital space, the models vary.

Display Ads Hanging On

Display ad revenue based on impressions or clicks… well if that’s your business model, good luck. It can work for massive sites with milions of uniques daily (Koz, HuffPo, Business Insider), but the average local news organization isn’t going to generate enough volume of content consumption to really make that big of a dent. Especially when impressions are running at $2-4 per thousand on ad syndication networks.

Social media has kept the display ad drum beating – but back to the point of eyeballs, they’ve got them. Facebook has 1.5 billion global users targeted by demographic, psychographic, self-identified vertical niche interest, and so on. I can also pay them on a per-impression, click, or even CONVERSION.

Tell me any traditional media that can give me that metric. {snort}

Pay wall / Subscription Content

Pay walls and membership sites CAN be effective, but only so in very narrow niches. I’ve observed many sites that charge a premium for access to content to be successful – but generally only within the context of some niche community engagement model like discussion groups or other interactive community.

Cost Per Action Lead Generation

One of the areas where I think traditional media is mission out is adopting a Facebook-like cost per action or cost per conversion model. The problem with doing so on a localized level is the niches are far too broad at the publication level. It’s back to the number of eyeballs translating into conversions.

Affiliate Marketing Revenue Sharing

One of the strongest models for ecommerce has been that of commissioned affiliate revenue sharing. Amazon really pioneered the idea of giving other internet publishers a split commission on any sale resulting from an inbound link coded to identify the discreet traffic source.

This has been effective in a lot of industries, and represents a significant amount of income potential for traditional media.

The Big Asset – The List

One of the biggest assets in any direct marketing effort is the database list itself. Having large subscriber lists of niche interested people represents a lot of revenue opportunity.

This is why Facebook encourages brands to build a Facebook Page, from which all the advertising love will flow. They know the value of having a subscriber base, and you pay them for the opportunity to amplify your message to that targeted audience.

What do you do with that niche advertising and audience? Build an email subscriber list of course! But perish the thought of spamming anyone in 2016 – Reddit will eat your lunch.

What is it worth to Miller Brewing to have a geo-located list of 10,000 local beer enthusiasts on a direct marketing basis?

What kinds of creative deal structuring can be had if the traditional media channel has niche-specific funnels to grab subscribers to quality, interest-focused content?

Where Will We Be In Another Decade?

Some marketing academics believe that in the future, we will all have personal purchasing concierge accounts that contain all of our pertinent marketing information, payment data, credit scores, etc…

Digital vendor management wallets… or something… I dunno about all of that, especially in consideration of the large population base still GenX and Baby Boomer hanging around.

Even in the Millennial generation, behavioral adoption of something so ubiquitous will still take time. Maybe that’s why the mobile carriers are so interested in becoming the bank with things like Near Field Communications to authorize payment by passing your mobile device over a reader.

Who knows what the future holds – but I know one thing for sure: people will still buy from people more than people will buy from pixels on the screen. Maybe that’s why all those product review and unboxing videos are so popular on YouTube.

Parting Shots

It has been quite a ride since 2000. It has taken many, many years for people to realize the display ad model isn’t really effective anymore. Moving marketing tactics from one media channel to another doesn’t ensure success.

If you’re in traditional media, I don’t envy your task. Trying to innovate your way out of the dinosaur doesn’t seem as appealing as just being disruptive and starting something clean and fresh….

Just like what the Dallas Morning News is trying to do.


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