Newspapers must use consumer data to produce targeted ads for the people who visit their sites, if they are to survive the ever-changing media landscape.
The advice comes from Karrian Hepburn, chief customer relationship officer at the Unit Trust Corporation (UTC), who was addressing members of the local media during UTC's media workshop, Rethinking Media Business Models: Navigating the New Abnormal.
"Modern technology has changed the rules and revolutionised how news is covered, consumed and disseminated. Not only is the formula changing but the model for survival is no longer a cookie-cutter approach. What will happen pivots in part on whether the news industry can move into the more lucrative areas of digital advertising, particularly using consumer data to target ads, persuading major legacy advertisers to also advertise online and moving into new revenue streams."
Hepburn drove home the importance of digital revenue by referencing a study of advertising in US news by the Pew Research Center’s Project for Excellence in Journalism.
"Currently, even the top news websites in the US have had little success getting advertisers from traditional platforms to move online. The digital advertising they do get appears to be standard ads that are available across many websites. And with only a handful of exceptions, the ads on news sites tend not to be targeted based on the interests of users, the strategy that many experts consider key to the future of digital revenue."
Hepburn noted that overall, Pew's analysis found that while news organisations have tried to persuade their advertisers to buy space across multiple platforms, there was little evidence they had succeeded.
"Like it or not," she emphasised, "digital and social media transformed the way journalists work. There is no denying the speed, immediacy, consumption and audience reach which digital and social media are driving. But the idea that traditional newspapers or the traditional mission of newspapers is becoming archaic is incorrect."
Hepburn acknowledged that mainstream media must adapt and change while maintaining their credibility, managing costs and growing revenue and profits.
"Never before in human history has so much information been available to so many people, so quickly. People crave information, it is human nature and our democracy thrives on it. But it’s fair to ask what kind of information. What role will media play in its dissemination? Can legacy media adapt so that legacy doesn’t come to mean extinct?" Hepburn asked.
She then handed over to editor-in-chief of Weber Shandwick Vivian Schiller, who presented data on, among other things, reader revenue streams and how newspapers can use this to help ensure their continued existence as reliable sources of verified information.
Using slides of the most recent US data, which she presented to attendees during the November 17 workshop at Jaffa at the Oval, Port of Spain, Schiller pointed out that during her 2006 - 2008 tenure at the New York Times (NYT), “print display revenue probably represented 75 per cent or 80 per cent of revenue.” Compare that to The Guardian in London, where print display revenue is now fourth in terms of total revenue.
Digital display advertising is another evolving area. Schiller said what was once “a huge growth engine for news organisations has now either flattened or is declining, as advertising moves to mobile and as Facebook and Google gobble up all of that revenue.” Specifically, 80 per cent to 90 per cent of ad revenue growth is attributable to a Facebook or Google platform, not to individual publishers.
Reader revenue, however, is one area of growth. Formerly referred to as subscriptions, reader revenue is experiencing a resurgence in the US.
“The NYT has had great success with their model where you can read a certain number of articles for free before you have to pay. Others, you have to pay from the very first click – the Wall Street Journal has that. I would say that within two years, every legacy print newspaper organisation in the US will have some form of reader revenue in the form of digital subscriptions.”
In order to maximise on this, Schiller said newspapers need a specific person in charge of tracking and analysing sources of reader revenue and identifying ways to enhance such.
“The kind of complexity, pricing, customer service management, (involved in this) requires that every news organisation has, at the executive level, somebody I’ll call an audience development executive. Someone who works hand-in-hand with the editorial leadership to understand where the audience is, to understand the metrics and the data around how people are consuming your content, how long they’re staying, what content they like, where are they spending the most time, where do they click from. All of that is essential in order to make any of this work.”
“Of course, it’s important to the business but it’s critical for newsrooms to understand how people are finding their stories and how people are engaging,” Schiller declared.