On my last Street Fight column, reader A.J. Baer left a sincere question in the comments: “There are a number of articles on the need for a strategic makeover for old media,” Mr. Baer wrote. “The problem with all these articles,” he continued, “is that while they identify that the world is changing, they never offer any tactical solutions to the problem. If the key is finding the place beyond the wall, what is that place? I am looking forward to that article from one of the Street Fight writers.”
A.J., thank you for this comment. My purpose today is to hopefully address your issue, and believe me, it’s one I’ve heard often in my career as a professional observer of the professional observers. The stuff I’m going to say might seem wild, pretentious — and even insane. But I assure you that any local media company following this path would arrive at prosperity, regardless of what the future has in store.
Before I get to today’s tactical discussion, let me say a word about why you’ve not seen this anywhere. The answer is what gives the digital pureplays their greatest strength: they are willing to invest capital in the creation of new value, whereas local media companies aren’t. This might be because the local company needs every penny just to stay alive, or that shareholders demand they be paid instead of putting money back into the operation. Where you see the rare exceptions in the traditional or non-traditional media world, you’ll find R&D money in the background. Technology is just technology, but it does cost real dollars to make it do what you want or need it to do. That’s the caveat to everything I’m about to say, but it’s enormous. And this money MUST be spent on new value creation, not on shoring up the existing legacy brand.
Remember that the pureplays — the real enemy in your town — are very happy to see everybody continue as is. They want and need the TV stations in town, for example, to continue competing only with each other, instead of looking to create new value using the playing field they view as theirs alone. Local media has what every Silicon Valley company only wishes they had — sales “feet on the street” — and given the way things are going with partnerships, it won’t be long before competing with the other TV stations in town includes working on behalf of Silicon Valley companies through partnerships. Wait, what? You say that’s already happening?
On to the tactics:
First rule: operate your company on two simultaneous paths. Path One represents your brand and everything it stands for. When these salespeople hit the street, they sell what the brand provides through its core and edge competencies. Given history, this is most likely audience. Never forget that media isn’t in the content business; it’s in the advertising business. Its audience is what it sells. Whether targeted, contextual, niche or mass, audience is the “product” of media.
Path Two is assigned the task of creating new value for the company. By definition, the company’s brand is secondary, serving only a promotional role and, for a season, a mechanism to offset expenses in new value creation. It may or may not exploit edge competencies of the mothership, but it is not mass audience-based and, therefore, has the freedom to compete against the mothership, even if the result is the big brand’s death.
So, Terry, who sells advertising on the company’s website? Since it falls under path one, I believe the answer is the sales staff that sells everything related to the brand. But what about that Borrell data that shows what a separate staff can do? Gordon Borrell has been pleading with newspapers and TV stations for years to diversify their offerings, too. Those companies with separate sales staffs for digital AND that sell a diversified set of products do indeed outperform their contemporaries. But I’m talking about creating new value and selling it, not bolting another product onto the brand and selling it as something other than what it is.
Most of what I have to share here is Path Two stuff, but that doesn’t mean there aren’t things to be done on Path One. Path One with media is content; I’ll save that one for another commentary downstream, for journalism itself is evolving. It doesn’t change the fact, however, that new value creation IS the purpose of media companies today, whether small or big. I genuinely feel sorry for those who believe there is a future in practicing content creation alone.
Last week, I called for a strategic makeover. We need a new strategic plan that positions us as more than “just” a media company and behind which our employees can throw their energy. So here are ten things that I view as tactically supporting such a strategy.
- Build Local Databases: This is the Holy Grail of new value creation, and it’s what the pureplays have understood since the beginning. In the information age, the ability to pull information from databases is what separates smart businesses from those who’ve traditionally made their money by pushing people into pre-existing organizational systems. But, Terry, what do we put in these databases? Anything you can find. It all has value downstream, and the work is all upfront and maintenance.
- Create Local Ad Networks: The only thing that matters is who serves the ads, not where they are. Why? Think of the data for your database.
- Create Local Search: Can I compete with Google? Hell, yes, and again, you’re building your databases as you go along.
- Content Marketing Curation: While the ad industry races to the content marketing high ground, there’s a market developing for aggregating and curating all this new content. Let that be you, and again, the big “why” is the further development of the local databases.
- Streaming For Profit: Everybody’s a media company today, and they want their “events” streamed just like anybody else. There’s money here, and another boost to the database.
- Storage For Profit: Local people want and need a place to store their media. Why not trust a proven local entity to that task?
- Teaching For Profit: If everybody’s a media company, then there’s a market for teaching people how to do it. This has the ancillary benefit of creating a recruiting base for your legacy products by finding local people capable of telling all kinds of stories.
- “Listening” Both in the Aggregate and Specific Individuals: The tools exist to “listen” to the market and track the interests of those locals who are online. This has multiple uses, especially in a news environment, but it can also be a business unto itself doing research work on behalf of local clients.
- Web First and Unbundled: Any content we create should/could be done for the Web first and then for legacy purposes. The numbers here will make sense only after we get serious about this. We need to embed revenue-generation within these unbundled packages, because in the end, we don’t care WHERE they play, just as long as they play and we are able to record those plays. Which is better, embedding a piece in Facebook (like YouTube) or passing a link along through Facebook?
- Attack the Pureplays Via the Rotary Club, the Chamber, etc: Finally, and this is something everybody should already be doing, we need to take a serious business message to those who govern business in our communities, and that is that pureplay web companies are siphoning enormous sums of money from our communities through advertising. If you’re a Borrell or a BIA/Kelsey client, ask them to show you the numbers for your market. It’ll blow your mind. The pureplays employ no one locally, pay no taxes and do not support the Community Chest. We dare not do this, however, without something better to offer those local businesses wishing to do local commerce (see #s 1-9 above).
So, A.J., this is nothing short of a total reinvention of the local media business, and while I don’t expect people to be knocking on my door for details, you asked for what it might look like beyond the wall. I’ve given 10 tactics, but there are so many, many more. Meanwhile, all the industry can talk about is making better content or distributing it differently, and, unfortunately, that’s just not going to cut it downstream.
Terry Heaton is President of Reinvent21, a consulting company specializing in business reinvention for the 21st Century. He’s an internationally-recognized creative expert on all things web-related, especially as they relate to local media.