The New Growth Path and How to Get There

Earl J. WilkinsonExecutive Director and CEO INMA@earljwilkinson

The New Growth Path and How to Get There

Encyclopedia Britannica32 volumes

130 pounds

US$1,400

Middle class buying a dream

Print edition1768-2012

Encyclopedia Britannica1990 sales of US$650,000,000

Microsoft Encarta forces digital encyclopedia (US$1,400 to US$40)

Digital business: libraries, schools

Revenue falls 80% to US$130,000,000

2/3 of revenue from online sales

Higher margins, smaller business

Print edition1768-2012

Overriding issues facing publishersIdentifying growth

Being more relevant

Managing complexity

This presentationOrganising models

What we market: products to brands

Culture change and the growth path

What’s next?

Organising models

Organising modelAggregate

1 deadline per day

Hundreds of OK stories

Be better at 15+ subjects

Deep engagement/platform

Organising modelAtomize

1,440 deadlines (minutes)

5 great stories per day

Own 3 unique subjects

Multi-media flickers

Organising models

Atomize

1,440 deadlines (minutes)

5 great stories per day

Own 3 unique subjects

Multi-media flickers

Aggregate

1 deadline per day

Hundreds of OK stories

Be better at 15+ subjects

Deep engagement/platform

Organising model

Based on how people consume us

Affects content, distribution, marketing, advertising … everything

Can’t be both … make a choice

What we market: products to brands

Marketing a print newspaperHome delivery

Content packaging

Shut out the world

Status symbol

Marketing a Web siteEasy access

Infinite information

Get it quick

Sharing with friends

Marketing a mobile app/siteNews in pocket

Skimmable information

Get it anywhere

Fillers for your day

Marketing an iPad appBeautiful experience

Curated information

Second screen

Personal enjoyment

Marketing your products

iPad

Beautiful experience

Curated info

Second screen

Personal enjoyment

Mobile app/site

News in pocket

Skimmable info

Get it anywhere

Fillers for your day

Web site

Easy access

Infinite info

Get it quick

Share with friends

Newspaper

Home delivery

Print packaging

Shut out world

Status symbol

Multi-platform subscription bundlesOverview: how to bundle print, Web, mobile, tablet

Axel Springer: + iPad2 @ €49.99 per month

L.A. Times: + membership model

Helsingin Sanomat: 33% of subscribers in bundle

New York Times: driving print sales with digital!

The Times: packs for weekday, weekend

Marketing anews brandConvenience

Relevance

Consumption choice

Empowerment

Marketing newspapersNo longer destination purchase (producing and distributing important)

Now highly discretionary purchase (selling and marketing important)

Re-create demand for products

What companies sellP&G: shampoo shine to confident and sexy

Disney entertain to make dreams come true

Apple: make products that people will love

Not content but convenience and delight

Not the news, we help improve people’s lives

Transport hearts, minds to world of discovery

What newspapers sell

What we are not marketingJournalism

Trust

Role in democracy

Reflection of you

Not about how hard we work (not about us)Is your writing better?

Do you care more?

Have your people been doing this a long time?

Has your brand been around a long time?

Avoid muddled brandsLet’s not be old guy trying to act young

Nurture brands with clear characteristics

Grow old with today’s subscriber base

Reposition for youth

Marketing anews brandConvenience

Relevance

Consumption choice

Empowerment

Culture change and the growth path

Pew study on business modelsPowerless to change culture

Haven’t needed innovative people

Employees operationally focused

Battling inertia

Culture: contact sport, 1 collision at time

Google macro-culture

Speed over perfection

Low-cost innovation

Placing many small bets

Google micro-cultureHire people smarter than you, get out of way

Hire generalists to deal with “what’s next”

Don’t reward good planning, reward results

Attending meetings not getting things done

Passion: feedback, don’t take it personally

Save staff time: food, dry-cleaning, red tape

Eat your own dogfood

Culture change (us)1. Listen to the market

2. Focus relentlessly on differentiators

3. Prioritise expenditures to USPs, cut rest

4. Go where the growth is

5. Speed over perfection

6. Be willing to fail, but fail fast

7. Respect platform for its unique value

Culture change: only path to growth1. Operationally excellent

2. Raw content engine good enough

3. Structural advertising vs. order takers

4. Must change how we pursue revenue

5. Must change industry perceptions

Culture auditCurrent: culture of hierarchy/clan

Future: culture of innovation, entrepreneurship

Business development fund = 5% of revenue

Cross-departmental, analytics, market focus

Seamless multi-media publishing model

Change must begin with senior management

VÄSTERBOTTENS-KURIREN (VK) | SWEDEN

Be true to your USPsDESERET MEDIA | UNITED STATES

Family

Finance

Responsibility

Faith-based

Education

Care for the poor

Values in media

Digital firstJOURNAL-REGISTER COMPANY | UNITED STATES

New news ecology: prioritise platforms by velocity (fast to slow)

Sell digital first, print a differentiating second

Cut legacy costs: infrastructure, Ben Franklin

Business plan changes valuation metrics (25%-50% of EBITDA from digital)

News audiences as lead generators

SCHIBSTED | SWEDEN

Owns 16 assets nationally

2 newspapers

Traffic aggregation, e-commerce

Blocket classifieds, Hitta search

Digital company owns newspapers

Print vs. digital200 magazines, Web-centric company

Manage print for profit

Manage digital for growth

Pursue digital audiences: social, syndicated, crowdsourcing

Cut print products by half

IDG | UNITED STATES

Culture changeEditorial

Advertising sales

The people equation

Organizing marketing

Managing, leading audience development

Why “newspapers”

Advertising salesIntegrate at same pace as your advertising community

Keep print and digital separate, integrated teams when you need them

Integrate everything, have platform specialists


AudienceWhat we sell: bundled subscriptions across platforms (print, Web, tablet, smartphone)

Selling and engaging 2 separate functions

Have to be willing not to force print


MarketingShift from pushing products to brands

Out:Tactile benefits of print or shut out worldWow of home delivery or “newspaper in digital”

In:What associating with news brand means to youValue proposition of bundle (portability)


ResearchNeed one over-arching metric

Implement dashboard (FINN, LUN)

Goal: know more about audience than your smartest advertiser

Napkin data: advertisers, CEO, employees


Human resourcesCan’t treat today’s young generation like recently departed

Training, coaching, memberships, conferences (internal/external)

Innovation found mostly by exposing employees to those outside company, country, industry

What to reward: over-arching metric


EditorialNo print or digital journalism, just journalism

Platform managers looking across platforms

Platform specialists for platform engagement

Social media specialists: make content social

Newspaper anywhere modelSame/similar content experiences across platforms?Different content/experiences across platforms?


ManagementNeed brutally simple metric: rally all around

In-your-face ways of communicating success

Best practices to drive cross-platform growth

Reward numbers over “quality”

Make audience the rallying cry

Culture change foundation for

multi-media model

Growth pathUnderstanding consumer behaviour

Rapid digital adoption

Product development pipeline

Smart marketing

Data analytics

Scalable transaction business

What’s next?

What’s next?Opportunities in print

New product development strategy

Core competencies

Learning rulebook for digital advertising

Preparing for smartphone boom

The people equation

Future of printWill decline as mass-market vehicle

Gradual reduction in frequency

Gradual reduction in pages + format

How to preserve print for mass market?

How much to find new opportunities?

WHAT’S NEXT?



Core competencies



The people equation

New product developmentHow many in pipeline at once?

1 big initiative or many small ones?

Time frame for success (print vs. digital)?

Role of editorial?

Loud vs. soft launches?

WHAT’S NEXT?



Core competencies



The people equation

Core competenciesCompanies that invent new markets, shift consumer choice

Competencies engine for new business development

Competencies spawn unanticipated products

WHAT’S NEXT?

Competencies determine productsJournalism

Story generation

Storytelling

Communication

WHAT’S NEXT?



Core competencies



The people equation

Your crossover pointIf print advertising is declining, what must digital growth rate be to run a growing business?

Digital First Media: digital growth of 50%

WHAT’S NEXT?

The new solutionsSearch

Social

Mobile

Geo-targeting

Behavioural targeting

WHAT’S NEXT?

Digital First MediaSolutions

Geo-target audience

Target behaviours based on customer mix

Facebook “likes”

Improve search engine positioning

Products

Web site banners

Yahoo inventory

Facebook contextual ads

Directory package

WHAT’S NEXT?

1 + 1 = 3?What do these revenue solutions add up to?

How do we structure industry re-training?

Is this 100%/80%/60% print replacement?

Unsatisfied and nervous … and anxious to learn

WHAT’S NEXT?



Core competencies



The people equation

iPhone’s impact on mobile pageviews

v1 2010 v10 v19 v28 v37 v46 ve 3 ve 12 ve 21 ve 30 ve 39 ve 480

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

+1,700%

Putting mobile in perspective

Source: Otto Sjöberg

Phase 1: connecting people (86% penetration)

Phase 2: connecting people to Internet (33%)

Phase 3: connecting everything (5%)

Mobile: connecting “everything”Cars

Assisted living

Clinical remote monitoring


Security

Traffic management

Meter reading

Impact of mobile connectivity on youRelevant services in embedded environment

Content with different screens

Enabling readers to access content/services


Economics of smartphonesProcessing power improving

Access speed faster

Smaller and thinner

Cheaper device + time

Economics of newsprintDemand will weaken

Paper mills: consolidate

Suppliers: contract

Prices will rise

Targeted opportunities

When platform economics collide

Cheaper to give away $50 tablet than printing/deliveringTipping point? Price? Speed? Device volume?



Core competencies



The people equation

Attracting talentNot attracting best/brightest

Creative class can’t overcome image

Nobody wants to climb the mountain

Liberate people: give time for new ideas

Newsrooms, advertising, marketing

WHAT’S NEXT?

Level the mountain!Average age of newsroom: 58

Massively holding back change

Why not hire a young gun?

2 years of trying … nobody will take it

WHAT’S NEXT?

Employee oxygenInternal training

External training

Access to information

Access to peers

Encouragement by you

Education about news industry

WHAT’S NEXT?

Conclusions

Why own a newspaperProfitability

Political influence

Business/civic influence

Audience trafficker

Content pool for niches

We need to buy timeMaintain print long enough for digital advertising to scale

Lag between advertiser, consumer shifts to digital

Lag between time mobile and smartphone

Need to finance transition period

Under-valuing ourselvesHow to price newspaper

How to price Web content

How to price apps

Pegging our valueHotel chain breaks down pieces of hotel room

Asks guests to place financial value on pieces

Print newspaper worth $5

If newspaper helps find job, worth $2,000!

Pegging our valueUniqueness

Relevance

Authenticity

What does news brand do for me?

Be creative (even with an end point)Life cycle: born, live, die

Arrogance from idea of living forever

Live: discipline, confidence, creativity

Don’t strive for “quality”

Do strive for relevance

Earl J. WilkinsonExecutive Director and CEO INMA@earljwilkinson

The New Growth Path and How to Get There