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

[Christine Young]

Right on. Web ads and print ads are completely different animals, and the Web has capabilities print never dreamed of. Let's get some ad reps with imagination and creativity.

[Ross Williams]

I think lie #11 is that newspapers sell news. Their reporters sell an audience to newsmakers just as their ad reps sell an audience to advertisers. The real story may be that advertising is a dying business. It used to be that there were limited sources of information about new products and companies would pay to be in those venues. In the future companies can directly inform interested consumers about new products and there will be numerous venues for that message to spread via the "new word of mouth" - social media.

Online advertising is mostly effective as a glorified paid link. It works for online businesses, but I think it would be tough to build a brand for an offline product using paid ads on the internet.

[Dave]

The important point about #8 is that newspaper companies have the cheek to try to sell their audience's attention to advertisers despite having little more than contempt for the audiences themselves.

[www.timojappinen.com]

Judy,

You hit right on the spot with your article.

Lie #10 was something which I have been guilty as well, before surrendering myself to the wonderful world of online.

Keep on writing.

All the best,

Timo Jäppinen

[Erik Gable]

The main point I'd argue here is #7.

Yes, the most prolific crime blogger in Chicago is a 16-year-old with a police scanner. But is "sure, this beat will get covered, as long as an autistic teenager takes an interest in it" really a viable plan?

And although there are more and more news sources available, we also have to remember that most people don't have time to spend their days plugged into a whole bunch of different news streams, nor do they want to sift through and evaluate the reliability of reports from a few dozen different sources just to get an idea of what's going on.

However, I can't argue with this: "The more cuts made, the more newspapers are guaranteeing their own demise." Completely true.