Trinity Mirror, the owner of the flagship daily and the largest regional newspaper group, sent tremors through an ad-dependent industry when it revealed a 12.6% fall in ad revenues over the past two months. Other regional publishers - Newsquest, publisher of the Herald and the Northern Echo, and Daily Mail and General Trust plc (DMGT) - also reported double-digit declines for May. Fears over Johnston Press's future have been particularly marked with a 45% decline in its share price in just one week. In the US, the LA Times added to the gloom when it announced a 15% reduction in pages and 250 job losses, including 150 journalists, largely as a result of declining revenues.
The stock market, which is meant to look for signs of future earnings success, reacted badly. Trinity's warning that profits would be 10% lower led to more than a quarter of its stock market value being wiped out in one day.
Shares in other listed media companies also fell sharply, pushing shares in ITV, the largest commercial broadcaster, to fall to a record low.
In the advertising world, multiple shifts are piling on top of each other and it is often hard to keep track of them, much less understand their implications. Let’s look at just some that are re-shaping the advertising world:
1). Shifts from advertising placed in digital content to ads placed in social networks and applications
2). Shifts from digital advertisements delivered through conventional PC’s to a growing array of mobile devices, with an increasing ability to target messages based on the physical location of the person
3). Shifts in the behavior of digital users in their responsiveness to advertisements online
4). Shifts in the way that companies connect with and build relationships with stakeholders (e.g., blurring boundaries between customers, partners and suppliers)
5). Shifts in the revenue models for businesses, as online businesses in particular become more and more dependent on advertising as a key revenue source (e.g., is there any Web 2.0 start-up that doesn’t blithely answer “advertising” when asked about their revenue model?).
Hagels message to advertisers is that they should be able to genuinely engage people around their products and services. And to do so in such a compelling way that people seek them out – and keep coming back because they have received so much value. What we describe as Engagement Marketing.
For centuries, newspapers as a medium enjoyed a virtual information monopoly – roughly from the birth of the printing press to the rise of radio. We never had a reason to second-guess what we were doing. Second, even after the advent of television, a slow but steady decline in readership was masked by population growth that kept circulations reasonably intact. Third, even after absolute circulations started to decline in the 1990s, profitability did not.
But those days are gone.
Yet apparently Trinity Mirror's chief executive, Sly Bailey, believes that the present state of the advertising market is "inextricably linked" with the health of the economy. As does Johnston Press CEO Tim Bowdler.
Although he admits that there are structural changes to the industry. Indeed - technological change occurs by clusters of radical innovations forming successive and distinct revolutions that modernize the whole productive structure.
And there is no doubt that the economic downturn is serious. But I argue that its the structural changes that are in fact key here. I think traditional media is less trusted, Nick Davies in his excellent book on the media Flat Earth News outlines a media world that trades daily in Falsehoods, Distortions and Propaganda, he writes
I commissioned research from specialists at Cardiff University, who surveyed more than 2,000 UK news stories from the four quality dailies (Times, Telegraph, Guardian, Independent) and the Daily Mail. They found two striking things. First, when they tried to trace the origins of their "facts", they discovered that only 12% of the stories were wholly composed of material researched by reporters. With 8% of the stories, they just couldn't be sure. The remaining 80%, they found, were wholly, mainly or partially constructed from second-hand material, provided by news agencies and by the public relations industry. Second, when they looked for evidence that these "facts" had been thoroughly checked, they found this was happening in only 12% of the stories.
The implication of those two findings is truly alarming. Where once journalists were active gatherers of news, now they have generally become mere passive processors of unchecked, second-hand material, much of it contrived by PR to serve some political or commercial interest. Not journalists, but churnalists. An industry whose primary task is to filter out falsehood has become so vulnerable to manipulation that it is now involved in the mass production of falsehood, distortion and propaganda.
The transition is almost too painful to watch - but the reason is dead simple - The management of these companies just can't grasp the fundamentals of living in a digitally networked society. The profound implications of living in a pull not a push economy pass them by like faint shadows.
They fail to grasp the fact that the media is now embedded in society as social media, that we live in a participatory culture, and they have failed to grasp the possibilities of how data, its collection and refinement could in fact be a key aspect to its survival.
In a paper I am preparing for Nokia on data analytics I write
What companies will be creating, using and selling in the near future is what is described as Social Marketing Intelligence . The more unique the “intelligence” extracted from the raw material of multiple data flows, the more valuable that “intelligence” becomes. Unique and valuable intelligence = $$$.
Or it could be that the process of evolution is so traumatic it just can't be achieved - leaving the door open to new competitors - without the baggage to get on with the job. Lets face it - if you had been a scribe all your life, cosetted, fed. clothed etc., - why change that for the nonsense they call the printing press?
Then the selling of advertising interruptive inventory in a PULL marketplace seems just as absurd. In fact I would go as far as to say its negligent. In my post Regional Press Owners Need to Get with the Beat: Intelligence I argued that how one created value for readers and advertisers is different. Display advertising as John Grant wrote is the junk mail of the 21st Century.
Yet the understanding, the mindset, the technologies used and the type of advertising inventory sold has just not moved with the times. This is because those who now own and run these print media have been more focused on the business of profit and not on the business of journalism - the extreme example of that is Metro - a cut and paste job in the news factory of churnalism.
You reap what you sow.
So the challenge is how does one become attractive to ones customers? The answer is to provide services that although driven by a commercial agenda can be…
2). Life Simplifying
3). Navigational (help be navigate through al the noise to the stuff that can really help me)
Intelligent Classifieds 1st in the Q
For example, a local newspaper instead of creating a simplistic inventory of display advertising, and then trying to replicate that in a digital context. Could create Intelligent Classifieds, that can be created around people’s needs which are; time specific and therefore carry a different form of value. I am looking for a new car, a flat to rent etc., If I sign up to First in the Queue I can be delivered information that is timely, relevant and contextual.
These are what could be described as Contextual, interactive, permission-based advertiser packages.
Life is local - Right?
Local newspapers should have dominated from the beginning. They should have been a trusted and through their print editions the promotional muscle to make their web sites into unassailable and attractive community hubs. But they didn't, and now they're reduced to playing catch-up. Because what has community got to do with the business of making money?
Are we in the business of print or the business of information gathering and dissemination?
The classic cliche is that the US railways in the end failed cause they saw themselves as in the railway business, not the transport business, the press has the same problem they see themselves as in print not information.