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Fragmentation of the media is a reality. So deal with it, would be one way of rounding out that statement. While many in the publishing game have been either resistant or ignorant to the changes being wrought around them, or simply ill-equipped to respond, advertisers have become impatient.
Meanwhile citizen journalists, interest groups, and some progressive media types, have taken up the lead in utilising the technologies that will characterise the profession moving forward.
As Margaret Simons from the Centre for Advanced Journalism wrote a few years back, the role of the modern media organisation is to utilise public assets like roads, maps and the internet itself to enable us “to do stuff that would otherwise be difficult or impossible”.
This is not about just putting out content through new channels but an entire restructuring of media organisations to bring together assets under interest groups or markets and create a seamless relationship between editorial and commercial functions.
While some are taking longer to adapt than others, there are key themes coming out of the business environment for newspapers, consumer magazines, custom publications, B2B media and purely online plays. Aside from the need for internal restructuring, these themes include the value of relationships with readers and commercial partners, the better use of data and archival content and more sophisticated revenue models.
Consider this: there could be five billion users online by 2020; 90% of consumers trust peer reviews compared to 14% who trust advertisements; and by 2020, 55% of companies expect they will compete primarily on a service basis.
The implications for media operators are profound but one can’t fail to see the commercial opportunities therein. Will mass circulation publications survive, how will the relationship with media products and their advertisers change, what organisations are already exploiting the opportunities? Media Trends & Strategy spoke to numerous industry executives in a bid to answer these questions.
Has anything really died?
Reading the headlines over the past year you’d be mistaken for thinking the mainstream media in Australia was a thing of the past, that ‘print is dead’.
“Entertain, inform and educate” is the upbeat credo for the “new” News Corporation Australia, publishers of The Australian and a raft of metropolitan and regional newspapers and online assets. It’s streamlining is more “logical” and “fiercely Australian”, a similar approach being taken by Fairfax Media, publishers of more than 400 publications and 300 websites including The Sydney Morning Herald and domain.com.au
Radical restructuring and cost cutting at Fairfax in June saw new metropolitan newspaper editors taking responsibility for all print and digital platforms for the first time – including online, smartphone and iPad.
Fairfax recognised the challenges it faced were largely structural and several years ago began to bring its print and digital resources in content and in sales together.
“This represented a revolution in the way we worked,” Fairfax Media CEO Greg Hywood told investors in June.
He said the company is committed to delivering the transition from a “legacy print business to a media company that prospers in a competitive market”.
Its focus now is on being “lean” and consolidating its core assets – news, business media, lifestyle and community media. This signals an organisation structured around key markets and audiences rather than monolithic brands and modes of delivery.
While it has introduced paywalls for digital versions of The Age and The Sydney Morning Herald (SMH), Hywood assured investors that Fairfax has no intention of reducing frequency of the print publications of any of its major mastheads in the “forseeable future. Why? Because they are profitable”.
For how long and at what quality are the questions. As advertising revenue disappears, so do readers and vice versa. The SMH and The Age have lost close to a third of their circulation in the past three years.
Crikey Chairman Eric Beecher wrote recently, “Kim Williams [News Limited CEO] is right when he talks about the shiny new business models in digital media, but what he fails to explain is that these are shiny new yachts compared with the ocean liners that the world’s great newspapers once were”.
As Steve Allen, from Fusion Strategy says, advertisers don’t really care what the critical issues are for publishers but they do think, “all old media is dead”.
“What do you think the drop in circulation was about in newspapers over the last year? When I say to clients the circulation drop in magazines and newspaper over the last year was around 10% they’re surprised”.
He said advertisers have always been relatively flexible about where they spend their money but “when there wasn’t this explosion of opportunities and when the keys of the budget were held by more senior and experienced marketers, they were a little more reluctant” to spend online.
“Now we’re finding it harder to get them to continue to support print, that’s been over the last two to three years”.
John Sintras, Chairman at SMG Australia and Director at Global Experience Product said, “Traditional mediums are still effective and their digital spin offs are starting to claw back some of the market share decline.
“Traditional magazine and press revenues have declined far more rapidly than justifiable over the last three years due to publishers’ inability to provide real time measurement data to prove the efficacy of their print mastheads”.
What is interesting for advertisers is that Fairfax’s transformation includes investment in “better use of data” and promises more tailored, higher value advertising opportunities, as well as greater use of its content in third party environments, in other words content marketing.
A key element of competing for advertising dollars is demonstrating a deep understanding and engagement with your audience, according to Neil Monaghan, CEO of the Australian Regional Media Division of APN News & Media, publisher of 12 daily newspapers, more than 60 community newspapers and non-daily publications and over 30 regional news websites.
“There’s no secret that print circulation is declining, but regional newspapers are holding up much better than their metro counterparts.
“We have an emotionally connected and highly engaged local audience and invest in journalists, they produce 27,000 local stories a month. As long as we have that audience we’ll have advertising,” said Monaghan, adding that the group operates the most popular Facebook site for a daily newspaper – at 100,000 followers – with the Sunshine Coast Daily.
“That’s our edge, we have that local content,” he said, with the biggest challenge being collaboration – getting editorial and sales to work more closely than they ever did before.
In terms of the full suite of products, APN conducts panels to ascertain what readers think and according to Monaghan, are more in touch with their audience than ever before.
“In the past we probably haven’t done a great job in doing that, we are putting a lot more effort into understanding who reads our product or engages with our content.
“A lot of our journalists know who these groups are. It’s a matter of refocusing our editorial approach and it’s working…. it’s not print first or digital first, it’s about working with whatever make sense”.
Whether, in the case of the Sunshine Coast Daily working with surfer and skate communities or anyone else with as story to tell, Monaghan said the future is in more personalised and relevant content.
A client-driven approach
As the majors grapple with sustaining their businesses at a time when every aspect of the model is changing – content creation, distribution and monetisation – there are successful streams opening up online.
Some of these are built on new markets and models but others are just a re-working or extensions of publishing mainstays, such as delivering specialist content to specific audiences in the ways they want to receive it.
Having launched a custom publishing business in 2002, Craig Hodges, believes he has evolved the traditional publishing model to provide a better experience for brands and consumers.
While custom publishing is a great way for brands to produce content on behalf of themselves, “I felt the need to challenge the costs of print that were born out of the print and mail element, it was too expensive.
The constraints of that publishing model are providing opportunities for content-only agencies such as Hodge’s King Content to provide “a cost effective way to communicate and get a return”.
Nick Smith, Group Publisher of Health and Lifestyle at NewsLife Media said the biggest driver in re-assessing business models is, and will always be, the consumer.
“The consumer really dictates what platforms we operate across at both a category level and individual brand level.”
As an example, Australian’s frenzy for online shopping has meant that Vogue and GQ have upped the ante with their digital and social footprint. Traditionally these brands have helped consumers discover trends and fashion inspiration, yet now they see their role as integral at all stages from consideration to purchase.
“We allow our advertisers to participate as we do that,” said Smith. “The Vogue and GQ online shopping nights are examples of how we’ve created an environment where our consumers can connect directly with our advertisers through a collection of exclusive offers, products and promotions.”
This creates for NewsLife Media a new, and almost, transactional revenue model.
“We’ve also created local editions of Vogue and GQ in Mandarin to cater to a growing local and affluent Asian community and a means for our advertisers to engage with them,” said Smith.
Almost every proposal to NewsLife Media advertisers is both a unique and cross-platform concept that spans not just print and digital, but real word events, “social amplification and content development that helps our clients not only engage better with our audience but their own too”.
Managed by a brand solutions division within the advertising function of the business, NewsLife Media’s relationships with its commercial partners is based on an understanding of their business and consumer.
“How we add value to their knowledge of their consumer becomes important too,” said Smith, citing market research conducted on Australian health consumers that is set to be rolled out to clients.
NewsLife Media also carries out brand effectiveness studies using its audience panel, Thinkspot, an online reader feedback platform that offers rewards and insights into the content of the magazines.
Bauer Media is achieving impressive results for brands and advertisers and has increased revenues by 120% on some titles over the last few years.
“By leveraging our multiple content channels we can offer advertisers a range of opportunities,” said Publishing Strategist, Lisa Paton.
QMedia is an example, delivering an audience of 2.3 million passengers per month across multiple media touch points. These include Qantas The Australian Way Magazine; ambient media in the Qantas Clue Lounges; InFlight TV; the iPad edition of the magazine (273,043 unique issue downloads and counting); plus the Qantas Travel Insider website, which now attracts 1.4 million email subscribers.
“As brands create their own content and as all forms of content become increasingly interactive – from text to audio to video – the gap between content and commerce is fast disappearing,” said Paton. “Multi-channel marketing solutions are therefore a key mandate for us.”
One of the surprises in recent years has been the resilience of the B2B media with its ability to deliver niche markets and depth of content. However, unlike larger companies proprietors they are often constrained by tight operating margins and access to the metrics that can prove their claims.
Managing director of Yaffa Publishing Group, Tracy Yaffa, said, “The pace and scope of change has accelerated in the last 18 months which has meant a more dedicated focus on the structure of the business and our offering”.
Yaffa was a publishing house with around 30 specialty titles in both the consumer and the B2B sector. It now has fewer brands (not magazines) and offers the full suite of services from print, digital, enewsletter campaigns, conferences, round tables, awards and events.
“For an independent small company it’s a massive change in how we operate,” she said.
“I think we are doing what most publishers are doing – trying everything to see what sticks and what may develop into a reasonable business model. One that could be transportable to other brands in the company,” said Yaffa.
Building an integrated offering has been a challenge in terms Yaffa’s skills set and planning processes.
“Given our limited resources we now choose only one or two social media platforms to drive for most of our brands. Previously we were chasing too many rainbows and it was exhausting for the editors and marketers,” said Yaffa.
Steve Allen says those purely online plays that have a well defined and known target audience and provide top quality content can demand a premium online and are not subject to the environment of discount internet presence.
“Some of these niches really don’t sell banners, they offer a far more integrated offering, events, seminars, sponsorships. Clients buy exclusivity and they’ll pay for it, at a fair price.”
While he believes some B2B and B2C publishers have been more flexible in terms of what their audience need, as they operate without the risk of forfeiting cover price revenue if they fully embrace digital, they are still failing to respond to the brief.
“I’d get an email every other day that says a niche publication has X readership and I send back a polite little email, what survey was that based on, reader survey done in 2011?
“It’s a half and half market, the half that aren’t professional do terrible damage to the half that are.”
Empowered by technology
Real time, digital touch points, integrated platforms – not the kinds of phrases you would have heard in a strategy meeting at a newspaper or magazine even ten years ago.
Never before have publishers had such power over packaging, timing and delivery and so far they are yet to harness its full potential. Similarly, the expansion and availability of new technologies has turned the average consumer and business person into a media mogul who can choose how and when they use content.
It seems relying on the view of the media as a utility or its commercial value being in the art of journalism, is not working. As Margaret Simons writes, “what we need to make journalism sustainable is, to put it bluntly, better applications and appliances”.
Sintras said overall more clients are choosing dynamic, real time, measurable media environments.
“The biggest challenge is to prove that magazines and newspapers still drive short-term sales results, and to provide real time readership research that allows advertisers to track the efficacy of their spends in these mediums using increasingly sophisticated attribution models,” he said.
Nick Smith said social media is perhaps the most important way NewsLife Media’s health and lifestyle brands communicate with their audiences.
“Our brands have very large social footprints. We use the medium to activate our audience to purchase, to attend events such as Vogue Fashion’s Night Out, participate in audience research or create traffic to our websites.”
He said the beauty of analytics across digital, social and even foot traffic to events means NewsLife Media can set firm KPIs across the business for all departments. “Editorial, which has traditionally only had print sales to measure satisfaction, can now measure the success of their content via impressions, time spent or likes. So for them they can adjust effort and time into a project based on the anticipated reaction of the audience to improve ROI,” said Smith.
The custom publishing field has also been on a learning curve in recent years. Where once they had the branded content market to themselves, technology, coupled with the fact that ‘tell not sell’ branded content strategy has now become such an integral component of all commerce, has created a much broader market.
“Clearly the key driver has been the evolution of content delivery… creative messaging must now be delivered in increasingly clever and integrated ways,” said Paton.
Mobile content is especially important, as the use of smartphones and tablets reaches critical mass and increasingly influences the way people shop. Research suggests the amount of time people spend on a mobile device is growing at fourteen times the rate of desktop usage.
“Importantly, we take the view that social media platforms come and go without our control. So rather than focusing on the platform itself, we look very carefully at the audiences who use them and how those audiences use different channels,” said Paton, adding that this then informs how and when they engage people.
“Social media has helped us spread our profile within the niches we operate,” said Yaffa.
“I would love to hear from other media managers if there is in fact a magic algorithm that measures social media against unique visitors, time on site, page views, app downloads, but then takes it through to advertising bookings, paid subscriptions, sponsor commitments, copy sales, conference tickets, etc.”
According to Hodges the game changer for publishers has been Google.
“Google wants great quality content at the top of the index and when people search they get a good experience through Google.
“Brands are no longer just competing with competitors, they are competing for minds space with family and friends, not just competing against the company that does the same things you do.”
Having access to real time data on the response to branded content is the competitive edge, says Hodges.
“Success comes down to content strategy and execution. If you’re producing a content strategy and something is not working you need to use the data.
“I’ve never seen three years of change like it, the change on a daily basis is so exciting,” said Hodges.
Monaghan acknowledges there’s no doubt the way in which people consider content has changed. But when it comes to journalism and its value in the community “at the end of the day, I’m a believer”.
“We certainly haven’t done a great job at blowing our own trumpet, we need to do more of it.
“As an industry we need to be more positive,” he said.
This story appeared in Media Trends & Strategy magazine (annual) released in October 2013.
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