True Innovation in Local News Organizations Still Lacking

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It’s exciting to see many local news organizations transforming into “digital first” operations. After many years of slow progress, traditional media entities are finally taking the necessary steps to join the modern world of socially driven, 24/7 digital news. But while these are certainly steps in the right direction, it’s unclear that they are helping drive revenue, build working business models, or spur true product innovation.

Part of the problem is that news innovators often spend so much time in internal struggles to push a “digital first” mantra, that anything outside of the necessary steps to evolve can seem like an uphill battle. As a result, most news organizations continually celebrate what I’ll call “little wins” in innovation — specific departments see small, incremental changes filter in while major structural problems remain intact.

I should start by admitting that I have participated fully in this problem. When I was working in a newsroom, I thought we could solve all our problems just by thinking about digital products first. My thinking finally changed when an executive pulled me out of the newsroom and asked me how much profit the cool new things I was working on were going to generate for the company. I originally argued that these new tools and ways of covering stories would draw in more users and keep them coming back, which in turn would result in more revenue. “That’s great,” she said, “show me that in a P&L.” Long story short: the P&L was never profitable.

The project I was working on was a ten-to-fifteen-minute webcast that would be produced in the newsroom at noon every day. The idea was that people would watch it during their lunch break at work. It wasn’t a bad idea and it was what they hired me to do. The problem was that the idea didn’t come from talking with users about what type of news they wanted (and how they wanted to consume it). Rather, the project came about because the newspaper had a prior relationship with a television station, and now we needed products for our video staff to produce. That’s not innovation.

I want to be clear I think that it’s important to innovate with news coverage and engaging users in the stories that newsrooms are covering about their community. I just think that we, as an industry, need to be smarter about how we go about innovating.

The advertising side of newspaper publishing suffers from the exact same problem of incrementalism (and perhaps they have it even worse because they actually think they are being profitable and innovative). In these departments, there is a big push for non-traditional revenue sources — from e-commerce opportunities, event marketing, or even the good ol’ special sections and guide sponsorship. And while these can be profitable for news organizations, they are typically done as one-offs — so instead of generating more revenue they are more likely to just move money from one budget to another.

Meanwhile, a lot of these advertising-side special programs require promotion on the newspaper’s website to be successful. And while there isn’t a direct cost to promoting a new product, there is certainly an opportunity cost. Imagine if all a news organization did were these advertising products and each one was making a profit, would the profit from all of them cover your news website expenses? Probably not. And the site meanwhile would look like a race car, with logos everywhere.

Don’t get me wrong — innovation in editorial and advertising is vital to the future of news. But, in my experience, there typically isn’t enough of a strategy guiding these innovations. Or, if there is the strategy on the newsroom side is usually to “get more users and/or reduce costs”; on the sales side is to “generate more revenue.” Those aren’t strategies — they are goals. And they won’t lead to true innovation and long-term success.

This would be like Disney having a strategy of “get more people into the park.” At the end of the day that is what they are about, but to get there, the company spends a lot of their time focusing on what brings people into the park and on creating new revenue opportunities around their flagship products that enhance their customers’ experience.

And that’s just what newspapers need to do: innovate around their core competencies by spending time understanding their customers (advertisers and consumers) and what problems they can solve for them. The solutions should be a good fit for the organization and should be something that they are uniquely positioned in the marketplace to provide. Then, package those solutions into a product and of course figure out how to make the product profitable. The issue is: most news organizations don’t have many people focused on this.

I mentioned the executive who more than encouraged me to try to make the products I was building profitable. After I failed at that, she changed my title, and in doing so somehow changed my view of the problem newspapers are facing. I became a “product manager.” Suddenly my job wasn’t to take the latest tool and figure out how to apply it in the newsroom — instead, it was to discover what the needs of our users were, and build a tool to meet those needs.

I think news organizations need to rely more on product management and product marketing. Innovation in these organizations should start with the user or customer, and with what problem we are solving for them. Currently most of the product management and marketing takes place at the corporate level, if at all. And so much of that is focused on trying to build the features on our existing products instead of creating new ones. It also doesn’t help when the product manager is so far removed from the customer base.

Most of the great new product stories I hear are about how the manager visited with a customer and realized a major problem that a new product or feature could solve. If the product manager for Chevrolet’s minivans can spend time driving around with soccer moms, then why aren’t newspaper product managers observing folks reading the morning paper (print and digital), or at least attempting to better understand how people use our products. This doesn’t mean staring at metrics on a screen.

The reality is that news organizations can either focus on winning news awards, cutting costs, increasing pageviews, and coming up with new things to sell to existing clients — or news organizations can try to understand who their customers are and develop innovative products to meet their needs. The latter is more difficult but will yield better results in the long run.

Matt Sokoloff is a 2012-2013 Reynolds Journalism Institute Fellow working on a project to help local independent websites and bloggers gain additional revenue opportunities. Matt’s background is in building digital products for media organizations. Read more about Matt’s current work here and talk back at [email protected] and @MattSokoloff on Twitter.