Last week Australia’s Fairfax Media announced the company will cut another 120 editorial jobs at the Sydney Morning Herald and the Melbourne Age. What strategies beyond cuts can save old media companies as traditional advertising revenues dry up?
For decades, the print and broadcast media was incredibly profitable as they provided an advertising platform for businesses and individuals. While television revenues have held up, the rest of the media industry has seen their income collapse.
In the early days of the web the hope was display advertising would provide revenues for online publishers, however it turns out readers are blind to the ads and, should the messages become too intrusive or resource heavy, people will install ad-blockers.
One revenue channel for publishers is ‘content marketing’ or ‘branded content’ where advertisers sponsor specific stories. At the Sydney Ad:Tech conference earlier this week Asia-Pacific Regional Advertising Director for the New York Times, Julia Whiting, described what the iconic masthead finds works in this medium.
Whiting says there are five key factors in making branded content work for advertisers.
- Give something of value. Be entertaining, informative, educative or provide some utility.
- Tell an authentic story. Make the link between the brand and story as subtle as possible.
- Produce high quality content. Consider how a newsroom cover the story and what would hook the reader.
- Choose the right environment. Advertisers have to align with publishers that have the right brand values and audience.
- Targeted campaigns. Use data to define and find target audiences then use that information to deliver relevant content.
The question with the branded content is how explicit the advertiser’s message or sponsorship can be before readers start losing trust.
Another aspect is creepiness. One of the campaigns Whiting showcased was The Creekmores, the story of a young family who travelled the world as the mother was dying of breast cancer that was sponsored by Holiday Inn.
On a personal level, this writer is uncomfortable with such a personal story being associated with a multinational brand and wonders if the family would have been happy for their tale to be part of a branded content campaign for a hotel chain.
For branded content to really work, that ‘alignment’ between the publisher, audience and advertiser is essential and in turn ultimately relies upon the credibility of the outlet.
In the case of the New York Times, that credibility rests upon good writing and strong editorial values, although the paper hasn’t been immune from scandal itself.
Good, well edited writing may turn out to be the greatest asset for today’s media outlets as smaller publications such as The Economist, Punch and The Spectator see readership and revenues increase.
The Guardian, ironically an outlet that itself is cutting 250 staff, reports these publications are succeeding due to well written articles. “If you produce journalism that is not just better but significantly better than what’s free on the web, people will pay for it,” says Spectator editor Fraser Nelson.
Which brings us back to Australia’s Fairfax where a succession of clueless managements have eroded editorial standards. Three years ago former editor Eric Beecher wrote a scathing account of his time at the company where an incompetent and unqualified board flailed in the face of market changes it could barely comprehend.
One of the villains of that tale, board chairman Roger Corbett, was a successful Chief Executive of the Woolworths supermarket chain. That he was so obsessed with a failed business model and protecting margins by slashing costs indicates much about the nature of Australia’s insular corporate world.
A consequence of Fairfax’s cost cutting obsession has been foreign outlets have stepped into the market with The Guardian, Daily Mail, Buzz Feed and a range of other sites setting up in the country – something that further squeezes the incumbent’s market position.
In opening her Ad:Tech presentation, the NY Times’ Julia Whiting noted Australia was the outlet’s fifth largest global market, something undoubtedly driven by the decline in the SMH’s and Age’s output.
The travails of Fairfax and the successes of smaller outlets show what might be an encouraging trend in the media – that a quality product actually attracts an audience and advertisers.
If that’s true, the managements that mindlessly cut costs that hurt the quality of their core product may be accelerating the demise of their businesses.