Local News Pioneer Mike Orren on Industry’s Future: A Steep but Climbable Hill
Mike Orren knows digital community news from his days as a start-from-scratch entrepreneur publisher who grew his Pegasus News cluster in Dallas/Fort Worth to 150 neighborhood sites in the mid-years of the aught decade. When Apple launched its iPhone in the summer of 2008, Orren and his team were ready with a mobile-first strategy, which they hawked to iPhone customers lined up at local Apple stores.
In 2012, with the Dallas-based media and marketing firm A. H. Belo, Orren launched and headed Speakeasy, a content marketing, social media, and promotion outfit that quickly grew to 70 clients.
Since early 2017, he has been president of Belo Business Intelligence, which is involved in everything from marketing to mergers and acquistions.
In this Q&A, Orren uses his decade-plus experience in digital community news to take a present-and-future look at an industry that is still trying to find its legs.
Before we get started on the challenge of local news today and where it’s headed, please bring our readers up to date on the big changes in marketing services at Belo.
Back in 2012, the company embarked on a strategy of building and buying marketing services companies that served our mid-market clientele and that would benefit from the relationships of the media company’s feet-on-the-street salesforce. Speakeasy, the content marketing and social media agency that I helped launch, was the beta test of that strategy. Once we found our footing, A.H. Belo bought another trio of marketing services businesses and launched a programmatic group.
Last year, we saw that customers using multiples of our services got better results. We also heard from those customers that they wanted “one hand to high-five and one throat to choke.” So we consolidated those five businesses into a single agency, Belo + Company (B+C). Our media company sales team, Belo Media Group (BMG), remains the biggest channel seller of B+C.
What’s your role in this reorganization?
We found that while BMG and B+C were very different operations, they had a core set of common needs. My team, known internally as Belo Business Intelligence (BBI), provides product development and packaging; pricing; marketing; analytics and BI; presales support; and sales infrastructure (like CRM system management) for both groups.
Getting analytics-driven decision-making at the core of everything we do, from agency services to the newsroom to distribution, is one of A. H. Belo’s top five strategic initiatives this year, so that’s where we’re focusing a lot of our attention.
We hear a lot about the dearly departed “golden age of local news.” But you think some of the tears may be misplaced. Would you explain?
I was responding to an article on Nieman Lab. The gist is that the newspaper industry that anyone pre-internet grew up with was a historical anomaly of a brief, forty-year period in which the business was wildly profitable—think near-Apple levels. There was less competition from new media, forced bundling of reader-subsidized content, and most local newspapers enjoyed a monopoly or at least a duopoly. From Gutenberg until the post-WWI era, newspapering was a tough business, like it is today. Cutthroat competition meant that survival required partisan posturing and the print equivalent of clickbait.
The key problem is that the senior leadership in our industry grew up in that postwar golden age and wants to deliver that product in a retro future where people won’t necessarily pay for our particular bundle of content just because we’re the local paper and this is what we want to deliver.
You’ve been closely involved in local news, first entrepreneurially and then corporately, for 25 years. Is there one big insight that you’ve gained from all your experience that is your constant North Star?
Two things intertwined: One is that nothing will work over the long haul that doesn’t uniquely serve and delight your customer. The other is that because of the brand equity our industry built during that “Golden Age” period, we have an advantage that can still bring instant scale to things that startups lack. So, I guess my mantra is to provide great value, and do it under a brand that buys you enough runway to be able to innovate.
Today, there are a lot of doomsayers about the future of local news. Their major argument is that the big platforms—Facebook and Google—have locked up about 85% of local revenue, and they aren’t going away. You’re not a pessimist about local, are you?
I’m not a pessimist, but I’ve got a healthy respect for how steep the hill has gotten. The platforms are starting to realize that they need us too and becoming more collaborative—see Google’s News Initiative and Facebook’s Subscriptions Accelerator. I also believe that our industry is going to have to band together to reap the value of our first-party data in a way that is competitive with the platforms.
Do local news providers need to do anything new regarding the platforms —especially Facebook—either as deeper partners or independently?
I think those relationships will need constant reexamination and calibration. Call me an optimist, but I think that if we pooled our first-party data, we would have some audience targeting that the platforms would pay for. We did an experiment at Belo’s Dallas Morning News identifying our Dallas Cowboys fan audience using a platform called MarketChorus, and using the Facebook pixel, ported that audience into the Facebook ad platform. Once we de-duped those whom Facebook already thought were Cowboys fans, we had an overlap of only 5%. Imagine that kind of audience intelligence across thousands of topics and news organizations.
Local publishers are having a hard time making their production of news cost-effective. Many of them, especially daily newspapers, have made deep cuts in editorial staffing. Is that the immutable reality in today’s market—or are publishers doing something wrong in how they produce news?
I think it’s more of a both-and than an either-or.
We are dually blessed in Dallas at the Morning News, in that we have leadership that has kept the size of the newsroom, albeit reduced, far larger than most of our peers and … has really taken to understanding the levers that make people subscribe and modifying their strategy to focus on that.
A great example of that: In Texas, football is life. And you can imagine that University of Texas football drives a lot of page views. But because there are myriad other sources for that content, it doesn’t really convert subscriptions. So, the DMN newsroom moved resources from UT to Southern Methodist University, which drives far fewer page views but converts subscriptions.
We have an analytics person from BBI embedded in the newsroom who is continually providing data that helps them make those kind of decisions about how to allocate resources.
Programmatic advertising is taking a lot of hits on viewability and fraud. Can local sites make programmatic still work?
I’m not saying that viewability and fraud aren’t a thing, but I don’t think they’re the key thing. If we’re selling on a results-based KPI, viewability is just noise, and fraud isn’t a problem. The bigger issue for the wider industry (not just publishers) is transparency. A lot of those fat programmatic margins are going to fall this year. But overall, programmatic works. It’s one of our first tactics when we want to drive immediate action. It’s not going away, but it has to get better.
What about digital subscriptions—are they the new salvation for local news providers, especially newspapers still lugging around their weakly performing print products?
I might question the conventional wisdom of “weakly performing print products.” That largely depends on your definition of weak. Sure, they are in decline, but we still did a third of our revenue last year in print subscriptions.
I’m at the Local Media Consortium conference in Chicago right now, and one of the major recurrent themes is that there are no silver bullets. No one thing is going to make all the difference. Digital subscriptions are an important piece and represent our top strategic focus this year. But this has always been a complex industry, and advertising, marketing services, managing the print demand—all are going to continue to be a part of the equation.
Some local providers are putting a lot of energy into events as a new revenue stream. Is there a long-term yield here?
There can be, but events are hard work with a lot of moving parts. We’ve found that the best events are the ones that not only draw a crowd but also leverage and reinforce the value of our brand and content, while contributing to sponsor packages that cross over multiple products.
If daily newspapers and other providers do what’s doable, what do you think the news situation might look like five years hence?
Fifteen years ago, when I was first peddling a deck for a new-model local news service, my first slide was a picture of a chasm with Wile E. Coyote falling as the Road Runner flew across. The idea is that our industry would eventually need to decide which character to emulate. Over time, cutting costs and innovating in digital slowed the approach to the chasm, but now we are all very close to that edge.
Prognostication is a risky business. But I do believe that daily newspapers will have to start moving primary focus from print to digital and [finding] ways to make a truly digital-first news business sustainable on digital revenues that are growing, but a fraction of print. And that business will need to give its community more in terms of content, product, and functionality. I hope it doesn’t take a dark phase for local news causing societal problems for our readers to remember (or learn) our important role and for us to put some swagger back into our marketing strategies.
We’ll also, for better and worse, see more consolidation. Audio and video will grow in importance, and hopefully in monetization. And, I hope we’ll start playing some offense, to get momentum as we cross that chasm.