It’s no secret that the newspaper and magazine publishing industry has been “trading dollars for dimes” since the advent of the internet. For 20 years now, circulation and readership have been shifting towards digital, and a 2015 report found a 25 percent drop in print-newspaper consumption over the previous four years alone, with magazine readership falling by 19 percent over the same period.
Historically, newspapers earned nearly all their revenue from advertising. As recently as 2005, newspapers in the United States were bringing in more than $47 billion in print ad revenue; by 2014, that number had dropped to $16.4 billion. Now, one-fourth of advertising revenue comes from digital advertising, though that too remains in question: according to data from the Pew Research Center, digital advertising fell 2 percent in 2015, while print advertising fell 10 percent. As readership has shifted, ad revenues have dropped. Changing online behavior and improved analytics capabilities drive down the fees publishers can charge for marketing to their digital audiences, and publishers have turned to different types of subscription and revenue models.
Media companies are adjusting their growth strategies and making cuts across the newsroom and their organizations as a whole to minimize losses. With digital circulation offering obvious efficiencies, leading-edge companies have already moved towards new subscription-based revenue plans. There are a myriad of innovative solutions to the problem of declining revenue, such as different tiers for weekday-only or Sunday-only digital access, home delivery plus digital access, or “family shared” digital plans in which multiple family members can access on one account. Some national publishers are leveraging their network of local properties by building a membership model with customizable benefits. This enables readers to gain access to localized content such as the sports scores of one’s high school team despite living across the country.
Audiences are continuing to turn to digital sources for their news: four-in-ten U.S. adults (38 percent) report that they often get their news from digital sources, compared to two in ten turning to print newspapers for their news, according to a 2016 survey by the Pew Research Center.
Despite this shift, print circulation still offers potential value, and this decline needs to be managed. With sales and ad revenues down, there are three key areas where newspapers and magazine publishers are able to do more with less.
- People: Media organizations are restructuring their sales teams to be more efficient. Lower-value customers are being moved to a self-service model, freeing the highest-performing sales reps to serve the highest-value customers. Sustainable change, however, goes beyond installing a self-service model. Organizations need to ensure that the people who are selling have the right skills for what and how they are trying to sell now — the capabilities of a high-volume salesperson look very different than they did 20 years ago.
- Processes: Media companies are looking at the ad sales process in detail to not only focus reps’ time on high-value clients but also remove the account management activities and tasks that aren’t seen as valuable to the advertiser. Ongoing governance helps ensure that team members continue to sustain the changes.
- Technology: Publishers need a patchwork of technology from sales pipeline management to programmatic buying and more. Often, these media companies are tied to legacy systems they can’t replace without a costly transformational initiative. Rather than implement a new system, they need to identify different techniques that can be used to get the most value out of existing technology. Depending on the culture, internal structure and readership base of the organization, there is a unique mix of complementary technologies that need to be managed and melded to effectively support its activities.
Rather than attempting a complete transformation, these media companies are starting with small pilots, often within a single team at a time, to drive fast, incremental improvements that can be used to fund additional improvements that can yield in-year savings.
There is no one-size-fits-all approach, and practical innovation and agile execution have become more important than ever. Business models and revenue sources will continue to shift, leaving inflexible organizations back on their heels. To thrive, organizations must develop a culture that accepts the risks associated with trying new things.
Companies that are able to make small, ongoing changes to their people, processes, and technologies will elevate their strategies – and revenues – beyond shifting trends to deliver sustainable success through continuous improvement, innovation, and growth. Doing so will allow them to position themselves to take advantage of evolving media revenue streams and position themselves for the future by leveraging increased analytics capabilities to target content and digital ads to consumers.
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