As a newspaper executive, what do you do when advertising revenues are tied to declining circulations and undermined by the impact of the Internet and social media? Well, you could crawl up in the fetal position under your desk (not advised)—or you could look to innovate your way out of this dilemma.
Innovation is exactly what many major United States' newspaper organizations—organizations such as Hearst, Gannett, McClatchy, The Washington Post and others—are doing again. Yes, again. How many readers are aware that Cars.com, CareerBuilder.com and Apartments.com are all innovations driven by newspaper industry consortia?
The newspaper industry is about to undertake another paradigm shift in consumer advertising and promotion of products and services. This effort, being led by ShopCo CEO Ben Smith IV, is just getting under way. Smith and his team are still very much in the ideation phase; when we last spoke, they didn't yet have their Silicon Valley office.
There are many reasons why the newspaper industry needs to find new ways to engage with consumers:
- Newspapers are in the business of creating and supporting communities; newspapers are a part of the fabric of our society—each newspaper is a trusted brand.
- Major retailers have proven that there is a strong, mutually-beneficial relationship between members of a community and their local papers. Retailers have seen that a newspaper's ability to influence a consumer is second to none.
- Retailing is a weekly event; shoppers look forward to seeing what specials retailers are offering during the coming week.
- There are more deals being offered by retailers than consumers can possibly be exposed to due to space limitations in printed advertising.
- Consumers like to shop, they like to be exposed to new products and services and rely on advertising to help them gain a new understanding.
- Digital shopping experiences aren't about the media, they are about connecting to viable, thriving marketplaces.
Social media is a key driver in today's consumer marketplace, and retailers need a way to connect to consumers in a manner more consistent with social media.
Why don't consumers merely rely on Internet search engines? The simple answer is there is no relationship. The newspapers, retailers, and consumers collectively benefit from a nationwide, coherent solution exposing them to products, services, promotions and deals they need to know about. The vast majority of the time, consumers know what they are looking for, they simply need a place to look to determine what is being promoted.
The media companies behind the ShopCo came together because they need a national, not a regional, solution. It also needed new eyeballs and minds looking at how to solve the challenges of a digital age—the innovation needed likely would not be developed inside the walls of the newspaper organizations themselves.
While it's unclear yet just what the ShopCo solution will look like, Smith has clear ideas about where he wants to offer media organizations.
"Our goal is to ultimately provide our advertiser partners 50 million unique visitors who are engaged in an exciting shopping experience. We will be looking at a wide variety of new features and options on our roadmap, but we will continue to focus on enhancing the user experience and traffic growth as well as launching new web, mobile, social and tablet enhancements."
As ShopCo is a holding company financed by the newspapers, Smith maintains considerable autonomy about the nature of the solution he and his team create. Smith's toughest challenges are building the right team, maintaining a tight focus on consumers and advertisers, and dealing with the explosion of new opportunities.
While it would easy to believe that the newspaper business is stodgy, old and not very engaged in the 21st century technology and social media trends, nothing could be further from the truth. Stay tuned.
Dave Gardner is a management consultant, speaker and blogger who resides in Silicon Valley. His firm helps clients eliminate business execution issues that threaten profitable and/or sustainable growth. He can be reached through his website gardnerandassoc.com or Twitter @Gardner_Dave. Sign up for his weekly "Thank God It's Monday" or is Business Execution Insights newsletters here.
I appreciate the following people allowing me to speak to them for background for this article: Ben Smith IV, ShopCo CEO, Steve Hills, President and General Manager of Washington Post Media, Lincoln Millstein, Senior Vice President at Hearst Newspapers, and Jack Williams, President at Gannett Digital.
[Image: Flickr user Hector Garcia]