Top 10 Lies Newspaper Execs are Telling Themselves

My favourite word at the Scripps National Spelling Bee this year was “Omphaloskepesis”: the act of looking at one’s navel.  It’s a great word for what’s going on in the newspaper industry right now. 

The choices are so frightening, the solutions so radical, no one wants to face up to the reality of what needs to be done.  So they retreat away from reality.  They are lying to themselves and it will only serve to speed their demise.

Here are the Top 10 lies as I see them.  I’ve saved the biggest, fattest one for last. 

Lie #1: We can manage this disruption from within an integrated organization.

No you can’t. 

Economic pressures over the past few years have led many newspaper execs to convince themselves that the integrated organization is the best option. 

This will not work because the disrupted cannot manage their own disruption.  Most newspaper employees are not qualified to do the strategic thinking required to manage disruption let alone create it in the form of new products that may challenge the core because they still see themselves as print newspaper employees.  Just stating that you are a “news” company instead of a “newspaper” company doesn’t make it true.

I couldn’t agree more with Howard Owens analysis.  The only way newspapers can ensure the survival of their brands and the journalistic principles they hold so dearly is to separate the web organization completely from the newspaper. 

Clay Christensen talks about the “sucking sound of the core”.  That’s exactly what is happening at news organizations around the world.  The print product will always win because it still makes the most money, has the most people and cost associated with it and is where everyone feels comfortable. 

It would be very difficult to sit at a boardroom table and convince the room that the focus should be on the thing that makes little money, has unlimited competitors and a very unclear future or path to profitability.  Michael Nielsen gives a nice explanation of this here.  The sensible manager will focus on managing the core even if it is in decline and that’s why the two operations cannot co-exist.

Lie #2: Print advertising reps can sell online ads too

Actually, most often the phrasing is “print reps should be able to sell online ads”.

Maybe they should.  But they can’t.

Asking print reps to sell online advertising simply doesn’t work.  I’ve had my own personal experience with this and have had numerous conversations with others who have tried to make it work.

Don’t take my word for it, over the past few years Borrell and Associates have used stronger and stronger language around about the need to keep print and digital sales forces separate.

In a 2008 report for the American Press Institute’s Newspaper Next project, they stated “The logical next step – and really the only next step – is to separate the sales operations”. 

They state this because they have proven numerically that combining the sales forces almost always dampens sales results.

Why? Because most print reps at most newspapers have not been sales people at all.  They have been order takers.  I remember several years ago hearing of the executive who quipped that his reps “aggressively answer the phone”.

Further, most print reps have been selling lines and columns for decades.  Online sales are far more complex and more time consuming than print sales.  The rep may have to explain how online advertising works to the client, something they themselves are probably still not comfortable with.  Then there’s the monitoring and optimizing and reporting.  It’s a lot of work for a fraction of the revenue.

Then there’s the question of compensation.  Just paying commission won’t work on such small numbers.  A VP of Advertising once asked me how he could justify paying 25% of his bonus budget on 4% of his revenue budget.  He definitely had a point.

My experience has been that an online-only sales team is always better.  They tend to be like their agency counter-parts, young, dynamic, aggressive and ambitious.

But newspaper execs hate, hate, hate to deal with this fact.  After all, “print reps should be able to sell online too”.  A senior exec at a very large newspaper company (not the Star) tried to convince me that his integrated sales force was working because while his total revenue was down this year, he had gained share. 

Nope, you’re lying to yourself.  In an economic downturn, the largest newspaper always gains share.

Repeat after me: Separate sales forces are the only way to ensure that the full value of the website is being monetized.

Lie #3:  Aggregators are killing my business

No they’re not.

This one drives me nuts.  Don’t blame Arianna, Tina, Larry and Sergey or all those Tweeple out there.  If anyone killed the newspaper business as we knew it, it was Craig Newmark.

People making this argument always forget that newspapers can be aggregators too.  As I asked earlier this week, why is there no HuffPo equivalent in the UK?

You don’t even need humans to do the aggregation.  Daylife, Evri, Inform et al will do it for you and in the case of Daylife in particular, brilliantly.

I won’t repeat my points from my post on the talk of changing copyright laws and fair use doctrine.  You can read them here.

Lie #4: We can re-create scarcity by putting up pay walls

No you can’t until you actually figure out what’s scarce and what’s abundant.

Most newspaper information just isn’t that scarce.  Nor is it of particularly high quality.  Why do we need to publish the entire printed product online?  The web is increasingly becoming verticalized.  Figure out what is truly scarce information to your readers.  Then, maybe you can charge for it.

I like Nic Brisbourne’s post on this topic.  See my post on the new economics of media for more on scarcity and abundance.

I believe that a large percentage of online readers are content to read someone else’s analysis of the news rather than the news itself.  A pay wall encourages users to find commentary on the news rather than the story itself.  Thus conversations about a particular news story will occur all over the web, but not on the originating site.

The first of the “95 Theses” in the Cluetrain Manifesto is that “Markets are Conversations”.  Allowing others to own your conversations is allowing others to own your market too.

Lie #5: Our readers paid for news in the past, they will again

Did they?  And will they?

I don’t know if we can make the definitive case that most newspaper purchasers were actually paying for news.  They were paying for a bundle of utility that included news, but where was the real perceived value in the minds of readers (i.e. which parts of the bundle did they feel they needed to pay for) and how much did monopoly or near monopoly play into the equation?

Newspapers used to play a role in the most important moments in our lives.  Our first job, car, rental apartment and purchased home were likely found in the classifieds section.  We used the paper to help us shop every week (coupons and flyers, travel, living and food sections) and decide what movie to see at what time and where.

Now the utility bundle is broken.  How much of the value of the newspaper was derived from news and how much was derived from all these other things?  After all, news has always been free on TV and radio.

Lie #6: There will never be enough online revenue to support our newsroom

Actually, this one is kind of true.  There may never be enough online revenue to support your newsroom as it is right now.  Where they are lying to themselves is in the assumption that the newsroom must continue to do all the things it does now.

Due to scale, competition and measurability, online advertising will likely never reach the dollar values of print advertising.  The businesses will be smaller.  Newsrooms must become smaller too. Use the Jeff Jarvis principle: Do what you do best and link to the rest.

Smaller newsrooms are not simply an economic requirement.  Readers demand more focused content as well.  They already know how to find the generic, commoditized stuff.  They want you to provide real value. 

Figure out what your online revenue potential is and build a newsroom of appropriate size.

Lie #7: No one will ever cover crime/health/city hall the way we do

Sure they will.

Most prolific crime blogger in Chicago is a 16-year-old kid with a police scanner.

Here’s a horrible little Catch 22 given Lie #6:  As more journalists are laid-off, the more potential expert bloggers there are and the greater the potential for small, focused local news sites to flourish using former newspaper journalists as freelancers and editors.  The more cuts made, the more newspapers are guaranteeing their own demise.

Lie #8: Our readers can’t be trusted/they are idiots/they are assholes

No they’re not.

When you get out of the way and let a real community develop, when you encourage and nurture that community, your readers will self-govern that community.

You are no longer the sole voice in the relationship.  You cannot continue to hold them at arms length. 

You can read about the great stuff Businessweek.com is doing to encourage community here.

Lie #9 Democracy will collapse without us

No, it probably won’t. 

People will find the information they need.  The vacuum will be filled.

If you haven’t read Shirky or Johnson on this topic, do so now.

And now, the biggest, fattest lie of them all!

Lie #10: I can compete with the best digital leaders/thinkers/creators in the world without becoming an active member of the online community.  

No you can’t. 

Until you have a blog, a Twitter feed and a Facebook account and until you are reading most of your news online and commenting on what you read, until you are all over Digg, Reddit, StumbleUpon, iGoogle, Netvibes and the like, until you can actually explain to me how online CPM-based advertising works, until you can explain how SEO and SEM work, until you know what “pwnd” means, until you know the significance of the 3 Wolf Moon or 3 Cat Keyboard t-shirt, you don’t know what you don’t know.

You are competing with the very people who created the Internet.  Increasingly, you are competing with the generation who grew up online.   How can you possibly be so arrogant that you think you can compete in that world without becoming a part of it?

Stop that navel gazing and look around.  You are outmatched. 

Comments

[Nick]

Great post, and a must-read for newspaper execs, except of course they won't, because they don't realise that they should. Catch 22.
The only one I'd really disagree with is #7, ''No one will ever cover crime/health/city hall the way we do''.
Your example speaks for itself: the strength of blogging is its immediacy and community, but if you think an autistic kid retweeting the police scanner can replace what seasoned, well-connected crime writers can do, may I suggest you haven't read any good crime journalism.
Getting to the heart of crime and corruption in a city can be a great force for the improvement of society (as well as uncovering some sensational stories), but it takes a lot more than geolocating muggings.

[alan jones]

Hey Nick, I disagree: most newsrooms are staffed by beat writers with little more experience and connections than the 16yo kid with the scanner. Newspapers have been racing 24hr TV news to the bottom of the quality/production cost equation for decades now. The most efficient way for experienced crime writers to work is to freelance themselves, since their most valuable work just isn't available daily much less several times a day — crime just doesn't move that fast. Likewise with most specialist beats, I'd contend.

I think Judy nailed it. I've heard every one of these lies told at every publisher I've worked. I love your point about first figuring out what your online revenue can be and building a newsroom you can afford on that budget. It's not rocket-science but newspapers really hate cutting staff. Media's of the few industry sectors where the market beats you up for trimming staff and reducing costs. It still seems like a portent of doom when a newsroom gets cut.

[Robert Quigley]

This paints a pretty broad brush. I think newsrooms should get more credit - some of these "lies" are really the extreme cases of publishers who don't get it. A lot do get it.

I'll take on some of these points:

Lie #1: I like Howard Owen's radical idea, if only because it is pretty radical. I don't think it's practical, though. A newspaper spinning off a web operation into a competing entity (yes, competing), isn't really a newspaper with an online entity. It's just cutting off part of it's business and spinning it off. Not sure how that advances things, frankly. The spun-off web operation could easily get slaughtered in tough markets. Batavia is a bit different than New York or Austin. Newspaper dot coms are actually the big dogs in most markets in online news. If they didn't have the newspaper backing, I'm not sure they would be.

Lie #3: I like aggregation, too, but I think you *do* need humans to do the aggregation. At least in most cases. Smart aggregation is always > random. See: Twitterfeed news accts vs. hand-managed.

Lie #6: I'm not sure who is saying they don't need smaller newsrooms. The economic times are tough and things are changing rapidly - all newsrooms I've heard of are shrinking. They don't need to be the size of what online will support, though. Significant revenue does still come through print, right?

Lie #7: Interesting that you say "The more cuts made, the more newspapers are guaranteeing their own demise" right after a point where you argue that newsrooms need to be much smaller. In either case, I agree with Nick here - good police journalism can and is done by newspapers. A good news organization covers the scanner material, but a great one does much more.

Lie #8: What newspaper execs are saying that? Who isn't trying to engage their communities? Some examples would be good. I highly doubt this is the thinking of even a significant percentage of newspaper execs.

Lie #9: Democracy itself might not collapse, but accountability surely would go down without good investigative reporting. How exactly do you think the investigative vacuum will be filled?

Lie #10: Newspapers and other members of the traditional media should get more credit for adopting, for using those tools and for engaging their communities. Some were slow to get moving (though not all), but if you think traditional media is still standing on the sidelines, you're not paying attention that closely. There are great things happening at the NYT, Chicago Tribune, LA Times, Houston Chronicle, SFGate - and at my employer, the Austin American-Statesman.

[tm]

This is brilliant. I'd quibble with #3: aggregators have to be smarter to be interesting. Daylife may appear to do what it does well, but it's wagering that I and everyone else takes the same gooberish delight in some master narrative of the USian spectacle - sports, celebs, highlights of this and that. Yes it can be fine tuned; it's still forced to select from the same bland product array that's passed for news for a few decades too long.

And #7 - local news might be within capture range of some driven souls, if one means scanner events, meetings, and such. Analysis, historical context and memory, seasoned awareness of sources and their limitations require a different sort of news sense. Not arguing that only old fart printsters can do it. Do mean folks with sharp analytical skills, social range, writing ability. Who can devote the time and free up the work situation to make it viable long term.

Still #7: Beyond the local, it's far more challenging. The future art of journalism needs to rethink how it can draw upon resources globally to cover complex, multi-lingual, multi-cultural events that are trying to remain hidden, and then figure out how to afford to do whatever it imagines it needs to do.

[Phil Buckley]

Here's the problem I see in defending the status quo at the newspapers: they're past their prime. The same way people would one say, "Nobody can copy books like the monks in Germany, those guys can re-write the bible in just 6 months."

It's not that newspaper employees are bad or untalented, it's that the way they've been doing it, isn't going to be here much longer.

[Nomiki Konst]

If there is one industry that is coping with the economy, it’s technology. There is no doubt that the future of the economy lies in the hands of our generation. Our corporations are going bankrupt, the newspapers are falling apart, and the capitalist model is withering away. The Internet, my friends, is here to stay. And, what is most fascinating about the Internet? It’s primarily free and being run by our generation.

In the next few months I predict an empire falling. I’m not talking about the American or the Democratic Empire. I’m talking about the Baby Boomer Empire. Baby Boomers have been grasping onto old economic ideas and have been resistant to the exponential growth of the Internet and social media until now, far too late in the game. Because they can’t speak the language of technology fluently, they are ill prepared for the future.

I wrote a blog about #10- Would love to know what you smarties thing. See it below at TheYippie

http://www.theyippie.com/TheYippie.com_/The_Yippie/Entries/2009/8/22_Lost_In_(Technology)_Translation.html

[nueh]

"Omphaloskepsis"
http://en.wikipedia.org/wiki/Omphaloskepsis
Sorry, couldn't resist...

[Simon Townley]

Nomiki: who the blazes is "our generation?" Do you mean people in their twenties? Thirties? Late teens? How do you know the age of other readers and commenters? Or are you one of those people for whom anyone outside their own age group somehow becomes invisible?

I don't think I'm part of "your" generation. But that doesn't necessarily make me a complete retard.

[Thomas]

Actually Lies #3 & #4 are actually true. Recreating scarcity on quality news will drive paid for news. The digerati hate this idea for some odd reason, but it will work.

[Karl]

Sadly, the people who get this post, get this post. Those who don't (hello key newspaper execs), don't. And despite the apocalyptic situation newspapers are in, that probably won't change. They will fiddle while Rome burns.

[Jason Kristufek]

Thanks for posting this, Judy. You are right on. I especially agree with Lie #1. We aren't running our online operations like start-ups or encouraging our online products to be run like online businesses.

[Tom Altman]

Thank you - this is a great post. Hopefully an eye-opener for a bunch of people.

I really like #2 (Sales people are struggling to sell print, they'll never catch up with online) and #3 (as far as aggregators go - they stink...but the best we have, until someone actually posts about it.)

Again, thank you!
tom

[John Reetz]

This post is so on target.
As the rebound (and rebound can be defined in many, many ways, not all of them good) takes place, one of my fears is that newspapers will not take advantage of the ability to think freely and redo the org structure in a leaner, but still strong manner. I touched on some of this in a post at http://jrmsg.com/media-buzzblog. It's the story of a true Rip Van Winkle publisher, returning to the business four years after retirement.

[Chris Edwards]

From an outsider's perspective brought in to the industry to improve sales, I'll take issue with #2, but perhaps not for reasons you might think.

Bad print reps won't be able to sell online advertising for the same reason they can't sell print: They haven't changed their message and how they interact with the advertiser. Good print reps can and are selling online advertising. One of the key problems is that most newspaper execs couldn't tell the difference between the two because there are/were lots of bad print reps making their budget simply because they are the only game in town or they had a long standing relationship with key business owners. Quality sales people are emerging and we are finding them as we change our hiring requirements, standards of performance and the way in which we interact with our advertisers. It's that simple. To state that a print rep "can't" sell online is short sighted. This is a sales problem related to the industry, not the sales people. Selling ads online is not exactly rocket science. You have to train them to sell the right way and then continue to adjust to changing times. That's the primary reason broadcast and digital media have eroded newspaper revenues, not the economy.

We have work to do as an online industry in making our packages meaningful to advertisers which will also translate to increased sales. The assertion that a CPM model is a bad fit is probably correct. The way this will work is by moving to a results oriented model and truly delivering that audience the advertiser is looking for. The way you deliver that audience is by allowing the online product team to truly do whatever it needs to do in order to gain that audience (independent of the legacy paper). The responsibility and accountability then can truly lie with those delivering content to keep (and grow) that audience so the product is meaningful enough in the marketplace to sell effectively.

[Freddie]

The exec in charge of our news company's online operation showed up in our newsroom one day to introduce himself. He wore a rock t-shirt and an iPod and delivered the message "I'm one of you" to the youngsters in the newsroom. He's 50-something.

He's very proud of his suggestion that we publish in print a list of "3 stories you'll find today on our web site" ... that's pretty much all he's come up with for innovation. That and an excruciatingly slooow a web site readers just get lost in.

We're supposed to be a major metro market media organization.

We are so dead.

[Bill]

Hopefully this will be read by newspaper execs everywhere. But you're way off on No. 7. Not a chance you'll get the depth of crime reporting from a scanner and an inexperienced kid. Yes crime logs are well read -- there's no doubt about that. But important crime stories come from sourcing, records and a deep understanding of how the system works. A "gang incident" was reported at 10 a.m. Saturday at Main and Center streets just doesn't tell you anything without good reporting to back it up.

[[email protected]]

And for those swedish readers out there, with kind permission from Judy here is a translated version:
http://mindpark.se/sjalvbedragelsernas-tio-i-topp/

[Dave M]

Chris Edwards, I really like the point that you make (and I really enjoyed this post, Judy).

To take it a bit further, I believe far too often if a salesperson reaches his or her target - whether it be print or online - they are considered to be doing a good job. The problem is that that actual line in the sand isn't accurately drawn because the people they are reporting to don't understand.

It sets a dangerous precedent if it is too widespread as the market gets an unhealthy - and misdirected - guide to what online advertising should be worth.

I am also seeing a fair bit of the focus being on selling more at much less which I think also hurts. Not only because the act of selling more itself has a negative effect on customers, but also because the salespeople are moving away from providing good, workable and profitable solutions for clients. One of the big differences between print and online is that online is obviously dynamic - the message is no longer communicated with a single frame, and the salespeople need to be in tune with that.

[Charlotte]

Yes, an industry driven into the ground by well past sale date babyboomers. Let's all pile on with the obvious digs, insults and quips. So clever. Yawn.

[Lisa S]

Print reps can't sell the web?? What do you think, web advertising requires a higher level of brain power. It doesn't. A good sales person can sell anything if they take the time to understand the clients needs and match that with your product or service. The problem is when the web guys at your newspaper sell most of their inventory to a 3rd party at single digit/m rates when your print reps have to use the rate card at double digit/m rates. This takes the print reps, you know the ones with all the client contacts, out of the sales mix. So if you think newspapers are down and out and want to keep drinking the "purple koolaid" of how the web it IT and nothing else matters lets see what the web only sales model looks like when you don't have PRINT reporters, PRINT salespeople - I suspect the emperor will still have no clothes.

Give credit to your staff - they can handle anything if it is a viable marketing solution to your customers.

[Pekka]

A Brilliant post, very eloquently and strongly put. I agree with all points but for #10. I am twenty-nine and, among other things, develop web applications for a living. While Twitter, Facebook, Digg, Netvibes and the likes, if purposefully used, can be great tools to connect and communicate, I believe from my heart they are not *requirements* for participating in today's world. The things that really matter, actual, real content, can still be created with a paper and a pencil. Great truths are spread through the new channels of communication, faster than ever before, but to be truths, they do not need the Internet, nor any other gadget, widget or device.

[DEMARS Yann]

To be checked ;-)))

[finance news]

yea too much

[fil]

Hey Judy,

courageous speech, clever analysis, numerous great references throughout #1 till #9.

The "big fat #10" was it that -though it bears truth at its core- made me stumble: What you deem being part of the Net, puts you on par with those taunted execs: "[...] blog, a Twitter feed and a Facebook account [...] Digg, Reddit, StumbleUpon, iGoogle, Netvibes [...]" - Hi there in Disneyland.

You're missing the foundation: Usenet, irc, mailinglists and the like were all around since the 80s. Thats what the "very people who create the Internet" keep on using. Since the early beginning the "conversation" raises. The place you might today call "blogosphere" was less publicly noted but already canty in those times when it was coined "cyberspace".
By the way: Most of what we're discussing today was put together as early as 1992 by J.P. Barlow:
http://homes.eff.org/~barlow/EconomyOfIdeas.html

So add Lie #11: The Net came from above in 2004.

*avoid to sneer* No it didn't.

The Internet, while rapidly evolving, is a stable cultural area with its own Tradition, History, Heritage. It is not an uninhabited continent yet to exploit. As with traveling abroad, foreigners should consider some respectful study unless they consciously come as invader. Expect serious trouble in the latter case.

[twitter.com/msbpodcast]

All ad supported media are in the process of dying.

Go look at/listen to PBS/NPR/PRI and Pacifica because they're all that will be left standing in a couple of years.

The advertisers are all going to the web because they don't have to scream louder the the next guy who's also trying to hock his schlock but can instead engage in conversations with current and potential customers, show their wares in an unhurried and undisturbed way, can take orders, track orders, track shipments, track customers, track complaints.

No the web is not perfect, but its better and that's enough.

The internet enables N:M communications which entirely subsumes the 1:N communications capable in mass media.

How long do you think people who are sitting on the boards of corporations are going to put up with their corporations (the old customers of the mass media,) wasting their money on renting an extremely expensive megaphone for "Global Village Idiots" when far less money would be much better spent on SEO.