Tuesday, May 27, 2008

The News Media and Marketers

I have friends and colleagues who are bemused by the fact that a lot of people get most or all of their news from the Internet. I’m not because I’m one of those people. I read more “hard news” from traditional sources because they are fed to me by email and RSS. I supplement that with trusted Internet sources--some run by traditional media, many by trusted Internet publishers. I’m always tempted to add “even though I’m not part of the demographic,” but that assumes that only the young turn to the net for news. My conversations with Boomers suggest that many of them see the Internet as a major news source also. A Pew post from last week gives several more interesting references that support the argument.

Over the long weekend I stumbled onto an interesting report on the broader subject of changing journalism. The report by The Media Center of the American Press Institute is full of food for thought. It begins by saying , “In this report we describe a landscape in which citizens are increasingly informed – and inform each other – through means and relationships that disrupt journalism as it has been traditionally practiced.” There is an agenda; the report calls for a new journalism think tank/research center, but they make a cogent argument for a change that is dramatically affecting marketers. Unfortunately, the full report is 61 pages long; the shorter summary doesn’t deal with the issues most relevant to marketers. So here are some of my take-aways if the Walter Matthau imagery doesn’t completely convince you.

They call it We Media:

WE MEDIA: Audiences, not institutions, are shaping the future of news and information. The emerging ecosystem relies on a symbiotic relationship between traditional and new media. Civic, social and economic systems are set in motion. Standards of trust, influence and relevance are being redefined.(page 7)

It’s a complex ecosystem in which citizen journalists both compete with and provide sources to traditional media vehicles. See some great stores on pages 12 – 14. Did you remember that a blogger saw John Kerry’s plane take off, snapped the Kerry-Edwards sign with her cam phone, and posted it on her blog? She beat the Democratic committee announcement of the vice-presidential choice by 1 hour and traditional newspapers by 24 hours. I didn’t.

It has become a complex ecosystem with citizen journalists operating under different rules from traditional journalists and trust being a major issue for both (see the stories to refresh your memory). This graphic shows The Media Center’s view of the ecosystem (page 15). The image is pixilated in the original, but I can read Filtering of the News in the top quadrant and Conversation in the right. Maybe someone will fill the other two boxes in for us.

If you don’t have time to read anything else, I’d suggest the Convergence section on pages 21 – 28. It’s a thoughtful discussion of where the business models are/should be heading. They summarize by saying:

Unfortunately, the defensive strategies [reliance on the advertising-supported model] have yielded mostly narrow, and largely disappointing, results. Even the most successful online operations – those at The New York Times, Knight Ridder and Tribune companies – have generated revenues equivalent to less than 4 percent (and typically 2 percent or less) of total revenues at news companies. These meager revenues fail to replace losses of 15 percent or more in print classifieds and display advertising – advertising that has migrated to the Internet – in each of the past three years. Not only have online news operations failed to replace this lost business, they have failed to either create a growth strategy or to define news media in the visible future. Most of the $10.5 billion in online revenue generated in 2004 will go to the top 50 Internet sites such as Microsoft, Google, Yahoo! and eBays. Only a handful of news sites – CNN.com, USAToday.com, New York Times.com, and MSNBC.com – crack that list, sharing less than $100 million in revenue, or a relative sliver of Yahoo’s $50 billion market cap.(page 28)

The lengthy ending section on the industry (page 52 on) is also relevant to marketers. This brief summary captures a great deal of it (page 4).

I recently quoted the statistics that suggest that advertising expenditures are not keeping up with the changing media habits of the consumer. This study puts a flesh on the bones of that argument.

Marketers must shift their efforts to the content channels where their customers are. And they must not rest on the comfortable assumption that it is only the young who rely on the Internet for most of their information. Two reasons; first, it’s not true of demographics up to, and increasingly including, Boomers. Second, the younger demographics—Gens X through Z, if you will—are going to get older, and they’re going to continue to rely on non-traditional, interactive, user-generated media. There will be ongoing change in specific channels, but the trend is inexorable and it's ongoing. The disruptive change we have seen so far is not over. Marketers need to be riding the wave, not fighting it!

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