Exploring the commercial failures of large publishers
The UK is the 4th largest advertising market in the world, according to Statista, coming in at just over £21 billion a year in 2018.
It will likely come as no shock to anyone reading this, that in 2017, £10.5 billion was spent on digital advertising, and that £1.7 billion was spent in the ever declining newspaper medium.
Part of the purpose of Media Forty Two is to try to shine some light on some of the less discussed issues in media. How have some of the largest publishers in the world, with huge resources at their disposal, failed in so many instances to effectively commercialise their digital propositions?
- Print Revenue Protectionism
Anyone who worked on a portfolio of print and digital between 2005 and 2015 will have noticed that it was extremely rare for a commercial director, to ever project a decrease on print revenues YoY. As such sales staff were presented with increasing targets to achieve commission, when any sensible PEST analysis would have told them to drop projections heavily.
To try to make up the shortfall sales staff ‘robbed Peter to pay Paul’ by offering the digital solutions free on the sales order even though these were the solutions the client actually wanted to buy. This then had the perceptual knock-on effect, of decreasing the perceived value of the digital advertising solutions to clients and made the boards of the publishers involved, heavily undervalue the digital solutions.
2. Editorial Obsession
This seems an unfair stick to bash a publisher with. The poor quality of online ‘news’ and the lack of editorial integrity is something that should concern us all. However far too many publishers have stuck to the ‘quality editorial sells ads’ model long after it was obvious to everyone that this is not the case. The ‘why’ this happened is again reasonably obvious when you look at the leadership of these organisations.
Traditionally a journalist worked their way through the ranks to become an editor and eventually a publisher and then likely an MD. For MDs across these organisations to move the focus away from the job they’d done their entire career was never going to happen. Now publishers seem to be looking more outside the box for their senior leadership – but for some, it is too little too late.
3. Emulation rather than Innovation
Anyone reading this who works in media, will have almost certainly attended an ‘Innovation Day’. The format usually involves a fairly smug MD, who likely has a background in finance, standing in front of his (it’s usually a man) staff and telling them how much he values them.
He will then say something really patronising like ‘you might just work as a PA, but if you’ve got a good idea we want to hear it’. Then everyone spends the day designing an app that has either been built already, or that does absolutely nothing a normal website can’t do.
At the end of this process the company pats itself on the back for being innovational and everyone goes back to their day jobs. Meanwhile a financial analyst somewhere has worked out a list of five smaller and genuinely innovational companies they want to buy. They buy these companies, the revenues nose dive when the original staff leave, and everyone wonders why.
4. Always be closing
Sales staff at traditional publishers have been told that if they make enough phone calls and push hard enough they’ll make a sell. And they are right to an extent.
The balance of averages means you’re going to sell a certain amount this way but it also means publishers don’t have time to make their commercial teams smarter. And it means these type of salespeople are viewed as pushy and annoying by many.
Every survey in existence shows marketers and media buyers (people too – marketers are people) like telephone the least as the channel to be contacted by. And yet most, rather than train their sales teams to be a mix of marketer/salesperson using multiple channels to convert and create leads, choose to run extensive telemarketing operations.
Some marketers can be bullied or annoyed into buying – but most can’t. Many publishers need to reconsider this model, as when you target a salesperson to spend a certain amount of time on the phone to achieve their KPIs you can guarantee they are wasting someone’s time somewhere.