With leading streamers, news media companies such as News Corp takes credit for convincing consumers that they should pay for something they previously felt was theirs for free, global head of transformation Damian Eales says.
In a web presentation to INMA members, he related how the paid content model had “triumphed over the advertising model” at news media companies, although successful ad-funded businesses such as News’ New York Post remained.
Eales, who is INMA’s volunteer president, says the trend to paid has accelerated among members through COVID, something he attributes to the importance of content during crisis and change, because printed newspapers were “not as available” through lockdown, and because the concept of subscriptions and streaming has become normalised.
News closed more than 100 print editions during the pandemic, most of which have not reopened in any form.
He says it’s remarkable how resilient, adaptable and innovative the news industry has been through the past two years, something he says is also true of customers. Remote operating environments have become normal, and he says customers “will never go back in terms of their patterns of consumption or expectations for seamless digital experiences.
“It is like we evolved a decade in only one year,” Eales says.
Successful leaders will embrace remote working as “an ongoing part of life” and recognise they can no longer rely on attendance as a proxy for the output of their teams, “not that that was an effective way to lead in the first place”.
And he says while data is “incredibly important” to media companies, it isn’t everything, although knowing basic customer information and adding to it gives media companies the opportunity to serve them much better.
“For all of the negatives of a cookieless world, there are positives too,” he says. “It forces our hand to ‘know thy customer’ to generate registration and to create enough engagement and value to generate that registration.
“To that extent, it also addresses a genuine concern of consumers regarding their privacy and the use of their data in a much more transparent one-to-one way between the customer and the news media brand – and not a host of intermediaries.”
But he says publishers should not forget that they are editorial-driven businesses, “led by people not algorithms, connected to their communities.
“We should leverage data, but we should not do so at the expense of intuition or creativity.”
Eales says the requirement to “think differently” about advertising calls for a one-to-one relationship with customers, based on first-party data as well as discerning data partnerships.
Among other advertising-related changes he anticipates is the reinvention of sales teams as the dollars associated with ad sales in many news media organisations decline, accompanied by the cost of sale, putting a lot of pressure on sales teams to reinvent.
He hypothesises the possibility of sales teams as generalists – customer-centric, product-agnostic, and solution-focussed – or product-centric and specific, or a hybrid of one supported by the other.
“Should we rely more on media agencies and delegate sales representation or focus more on direct-to-customer opportunities,” he asks.
He asks whether the cost-of-sale can be reduced by increasing sales automation, or whether technology can be used to convert legacy digital and print products into recurring revenue. “Think lower yield but higher lifetime value,” he says.
He asks what focus is being put into product development, and whether publishers are “trapped selling legacy print and digital the same way we always sold” or new product constructs “more relevant to the consumer and more valuable to the advertiser” can be developed.
Eales says he has no doubt that printed newspapers will remain for many years to come: “The value customers see in our newspapers is different than the value they see in our digital formats: the tactile experience and simple navigation; the gravitas of a front page or priority position; the brevity of the briefs; the discovery of something not searched for; the “edition of the day,” fixed in time and not in constant flux.
“It is no coincidence that those willing to pay increasing cover prices for our newspapers are also those who are most engaged with our content, and we should argue confidently that those ‘all-in’ readers are increasingly valuable for advertisers.”
He also points to opportunities and organisational challenges through the rise of content related to commerce, “in a world where it is targeted to the right customer, it is more likely to be pulled by the reader rather than pushed upon them.
“The ability of content to generate leads through trusted content is unquestioned. What remains to be seen is if it can be done at scale. I am sure this will be a bigger and bigger part of the advertising mix”, he says, although questioning where e-commerce and lead generation models should sit.
On emerging relationships with Big Tech, he says the industry has started to establish “some of the foundation principles” of a sustainable relationship in the same way that similar principles were formed between local television stations and cable companies many decades ago.
He quoted Australian regulator Rod Sims that the negotiating code had delivered “all we ever hoped it would”, estimating the annual value of deals for Australian media at “north of” US$145 million (A$201.7 million). “This is not ‘trivial money’,” he said.
There was no question that digital platforms are publishers: “They choose to publish some information, and they choose to censor other information. In that respect, they not only make editorial decisions, they publish content,” Eales says.
“They should be held to account in the same way news publishers are.”
Core ingredients for news media include a focus on readers-first, a new relationship with digital platforms, better and more engaging products, “being smart” about data and using it to add real value for customers, retaining a focus on advertising – which remains “a big part of our revenue streams” – and reinvesting in the newsroom of the future.
Upcoming live activities for INMA include a study tour in Austin, Texas, and there are hopes of a Copenhagen conference in September. “And if all of those flickers stay lit, it is INMA’s goal to fully reboot physical conferences in 2023 – with a focus on experiences and connections and people”.