Sunday, May 4, 2014

Think Digital - Leaving the ER

How will newspapers get out of the economic emergency room where they have been hospitalized for the last few years? This is a one million dollar question that has no easy answer. Taking a closer look at what enterprises like Facebook are doing can offer some ideas for traditional – and even new – media companies that want to thrive in this dynamic and ever-changing online environment. 

Considering two recent articles together, we can come up with some interesting insights. The first article, The Plight of Newspapers in a Single Chart states that digital advertising revenue surged 17% in 2013, to $42.8 billion, surpassing broadcast television’s figure ($40.1 billion) for the first time However, print and digital ad sales at newspapers went down by 7.1%. The weakness of digital ad sales in this segment continues despite companies’ efforts to pivot their businesses to online news.

The second article, Facebook First-Quarter Earnings: What to Watch, says that more than half of Facebook’s advertising revenues now come from mobile devices. This is an important shift in the company’s revenue mix. Also, Facebook’s latest earnings report reads that the company is still successful in nurturing loyal and engaged communities. However, the article also points out that Facebook, like many media companies, keeps searching for new ways of making money without expanding its news feed inventory. Video ads, for example, are probably Facebook’s next big move.

What can newspapers learn from this latest report on Facebook?

Think Mobile - People are more and more on-the-go and want to consume news anytime, anywhere. Having an app with an easy-to-use and appealing interface will put your company ahead of many competitors.  

Develop Communities - Find ways of attracting and nurturing a community that loves what your company does. The more engaged your consumers, the more valuable they will become to advertisers. 

Embrace Novelty - Traditional advertising won’t be enough to meet media companies’ revenue demands. Less traditional – but also more controversial – revenue sources, such as branded content and sponsorship, are already grabbing advertisers’ attention and bringing significant amounts of money to media companies. Join the party before it’s too late – and too crowded.

It seems that, by now, mobile is the name of the game for content producers. Another part of Facebook’s winning formula is nurturing communities that can be easily reached by advertisers. Finding new sources of revenue that go beyond the traditional online advertising is also mandatory for media companies that want to thrive in this market. A combination of these three strategies can begin to resuscitate the newspaper segment.

Raquel Salgado is a business journalist who has worked with the biggest Brazilian media companies in the past ten years. She is a Master candidate in Media Strategy and Leadership at Northwestern University. Contact her on twitter at @quel_salgado.

No comments:

Post a Comment