Key Takeaway: Let’s face it, the good ol’ days of print media are long behind us. Cuts in advertising budgets, lower subscription numbers, and this thing called the Internet have all severely damaged profitability for newspapers and magazines. All is not lost, however, as these publications have a large opportunity to tap into the digital space. Unfortunately, most have not figured out how to do this successfully (or at least profitably). This change in strategy must be accompanied by new tactics that get to the core of good strategic marketing:
1) Develop intimate relationships with your readers. Find a segment, target them, and give them exactly what they want.
2) Generate revenue beyond advertising and circulation. Your online content should leave the reader willing to pay more for customized material.
3) Reinvent the content delivery model. Focus on your core strengths, put your efforts into those segments or sections, and get rid of all the fluff that doesn’t drive revenue.
4) Innovate with new products and pricing models. Deliver content to readers in new and exciting ways that will enhance their experience.
It seems simple, but it sure is tough to explain to those newspapers that the digital world isn’t so black and white…
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Excerpted from Strategy + Business “Reinventing Print Media: Four new strategies offer a path to future profits for today’s troubled newspaper and magazine companies” by Matthew Egol, Harry Hawkes, and Greg Springs, August 27, 2009
Severe cutbacks in conventional advertising — even when subscriptions or newsstand sales are robust — are slicing deeply into publishers’ revenues and shredding profitability. And it has affected print more than any other medium: Although overall advertising revenues fell by mid-single digits in 2008, newspapers, consumer magazines, and business-to-business trade publications saw print advertising declines of two to three times that. Performance has worsened so far in 2009.
Marketers have accelerated shifts in spending away from paid advertising to other priorities — including their own Web sites, in-store marketing, loyalty programs, and word-of-mouth campaigns — and they aren’t likely to switch back. Spending on this type of “below the line” marketing (the industry term for categories other than paid media advertising) already represents three-quarters of most marketing budgets, having grown faster than paid media since well before the current recession.
The second long-term trend devastating print profitability is the rise of digital media. Print has been hardest hit by this shift, since print ad pages are priced at a significant premium over other kinds of advertising, and marketers have been slower to cut broadcast and cable TV ad spending because of the value they place on sight, sound, and motion for brand campaigns.
Only a few print publications, such as the Wall Street Journal, the Financial Times, and the Economist, are successfully charging for their content online. They are all specialized and oriented toward business professionals.
A second approach — moving entirely online without charging for content (shedding the costs of paper and distribution and counting on online advertising to make up for the loss of print revenues) — has also had little success.
A growing body of research — tracking media companies that are succeeding in the new marketing environment and leading marketers who have successfully pursued innovative new digital strategies — suggests that at least four strategies are available for the media company of the future.
The first strategy is to develop deeper relationships with readers around targeted interest areas. Premium online environments, built on rich, exclusive content and applications, can enable print players to develop a still more intimate relationship with their readers.
The second strategy is to tap into revenue streams beyond advertising and circulation. Among print media companies, two players that have innovated new models very successfully are Meredith and IDG. Meredith has built a marketing solutions business that is estimated at more than US$200 million in revenues, fueled in part by multiple acquisitions of targeted digital agencies for custom content creation, database marketing, and word-of-mouth campaigns.
The third strategy is to reinvent the content delivery model (with a particular focus on lowering costs) and to emphasize a “profitable core” of unique and brand-defining material. Identifying the profitable core requires thinking freshly about the zones or editions of a newspaper or magazine and eliminating sections that do not drive significant readership or advertising revenue.
The fourth success strategy for the media company of the future is to innovate with new products and pricing models. Among these areas of innovation, digital video is increasingly important – in large part because of advertiser preference for video as part of brand-building investments.
Edit by JMZ
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Full Article
http://www.strategy-business.com/article/09308?gko=2c407&cid=enews20090929
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