Mar

29

DealMonster Eats CEO

Filed Under Blog, internet, mobile content, news media, online advertising, Publishing, social media, Uncategorized | Leave a Comment

We need to take a measure of the agony of the regional press in the UK at this point: it will never get worse. 2013 will be the Annus Horribilis – or Mirabilis. If it does succeed in crossing the Chasm into digital profit, then it will be much smaller, with better margins, lower debt and worse cashflow. And it will employ far less people. And if it fails, then it will just become media history, a fascinating story of the failure of the media to re-wrap content for changing audiences. The first British newspapers, the coffee house prints of the early eighteenth century (Lloyds List is the classic) are now B2B data services. And my litmus paper remains, as ever, Johnston Press. Trinity Mirror’s issues are confused by its national interests, LocalWorld (David Montgomery and Northcliffe) has too much to do across a vast range of very different titles to be in with a reasonable chance. But Johnston (Scotsman, Yorkshire Post and 200 or so other titles) was a well-run business with a reputation for squeezing every extra penny from advertising sales. Markets loved it: this was a a 350p share price in 2007 (as Media Guardian reminded us on 25 March), valuing the company at over £1 billion. The share price was down as far as 4p two years ago, but the current management team have recovered it with good decisions on debt and staffing to 16p, valuing the company at around £100m. Staff is cut by a third, the albatross is still the debt and the interest rates, and there appears no likelihood of a print advertising recovery (15% down last year, 16 % down in the first 10 weeks of 2013). This will never now return. The big plus is an industry-leading 17% margin and £57m in operating profits. Digital advertising is growing fast but is still only £20.6m in revenue. So what do we do in make or break year?

In charge at Johnston Press is Ashley Highfield, and as I have commented several times already he has some huge advantages: he has no experience of the regional press (a vital quality for a clear mind), he was the Big Idea man who gave the BBC the iPlayer, and, as an ex-Microsoft man, he understands software and consumers. And he has survived a most difficult and dangerous year with a degree of success that would have surprized investors in 2011 when he arrived. So far so good. But this year will be another steep climb. If advertising continues in print in this way then more titles must close and overall manning has to be reduced: it is hard to argue against the proposition that the headcount of 4350, reduced by 23% last year, must fall again by up to 1000. This is a tragedy, but one of the roads to survival which does not work well in a traditionally-organized, heavily unionized industry is the idea that the future is freelance and outsourced. Where titles close they have to leave behind digital space fillers to try to hold the constituency and the brand in place while new communities are built online. Johnston has plenty of websites but few real communities, so the current push in the group towards mobile apps is very valuable, and could help with the dying demographic, where readers are still expiring faster than they are being created.

So far the digital push has amounted to some 20 tablet and mobile apps and some 200 “mobile websites”. And DealMonster, a coupon-based bargains site that I have been playing with for the past week (www.dealmonster.co.uk). There digital display works very well. It needs video and could well develop a “magazine” feel around its regions, but if the idea is that digital display answers everything then I must declare myself agnostic. What I really miss so far in the Johnston response is the evidence of re-invention nationally inside new models and disciplines for hyperlocal-to-national device-based news. DealMonster is good, but if display eats all the energies that the struggling company can expend, then the drive to subscription-based news, the only high ground in this territory, will suffer. DealMonster is good, as long as it does not eat the CEO and his ability to think outside of the regional box.

Now, if you were going to build a subscription -based hyperlocal news environment, would you start with a regional newspaper? Its a moot point, but I could argue that if Johnston can keep their local brands visible on the device then they start at a good point for attracting user-generated content, and freelance attention. But notice how perversely un-local much of the local press in the UK has become. Great if you want what happened in the local courts, or local government, fine on local professional sport and all football, wholly inadequate on what happened after the car crashed into a lamp post at the corner of your street. Local news has a social media dimension wholly missing from the things that local newspapers do online. We are always told that local advertising has huge value in introducing buyers and sellers: years spent discussing online classifieds at Fish4 convinced me that buyers have their own local boundaries and only online can release the flexibility they need. If you live this side of the motorway you don’t go food shopping on the other side. You will travel 50 miles for cheap tyres but only 3 miles for cheap shoe repairs. The whole business of circulation territories defeats what digital does best for user convenience.

So can Johnston Press do all of this fast enough to successfully cross the chasm? Cost-cutting and the return to break-even buys time. But the Project is not transitional – it is simply about Re-invention. Time now is very short indeed. Next year it will be easier to re-invent without the constraints of owning all these failing assets.

Mar

13

Marketing Nightmares in NYC

Filed Under B2B, Blog, eLearning, Industry Analysis, internet, mobile content, online advertising, Publishing, Search, semantic web, social media, Uncategorized, Workflow | Leave a Comment

Was it the sandwich or the service that sparked the bad dream? And does it matter? After the sandwich episode I cannot recall indigestion, though it is certainly true that anger was one of the emotions in play. You see, having ordered in the coffee shop of a top of the range global hotel group (pastrami and salad on rye, if you must know), and having waited 20 minutes to get it, I was saddened and incensed when the wait staff (glorious American gender obfuscation), moved my untouched plate to one side, placed my bill where it had been, and asked me, politely but with a not-to-be-refused firmness, to pay immediately since the wait staff in question was going off shift and needed to close my open account through the till. When I weakly moaned that I was going to ask for a cup of black coffee, then it was pointed out that this could be most easily ordered from a wait staff coming on-shift. This made me cross, and in no mood to eat a sandwich with due care and deliberation. Nothing could have been more in contrast with the attitudes that the hotel was trying to encourage, yet it was the gap between that aspiration, and the routines imposed on staff for performing process, that led to the problem. A problem that was not diminished at all when I quietly said that I was a foreigner, and wait staff must understand and humour my own national customs, which included paying for my meal after I had consumed it.

After I left this shoot-out at the sandwich corral, I reflected on the passage of arms that we are currently engaged with online in terms of of our marketing manners. In a recommendation-based world we would expect as friction-free buying process. We could craft our name and reputation online without the wait staff getting in the way, as long as we can be in reasonable control of our reputation. This probably involves supplying high quality goods at fair prices with great speed and admirable customer service. In other words, there will still be problems, and we are as prone to being let down by third parties as anywhere. But, actually, if we can create an immaculate reputation and maintain it, then many users will view the odd lapse with sympathy. Amazon above all others has succeeded in doing this. Goods do come quickly, you do know what is going on all the time, and while I sympathize with real booksellers going out of business, when you ordered a book from many of them you could wait 3 weeks or 3 months and had not a clue what was happening at any point.

All of which drove me to Badgeville (www.badgeville.com), because it promises me that it will “boost loyalty and conversion across the customer journey”. As so often happens a good word (“gamification”) has fallen amongst thieves here, and instead of meaning the turning of processes (like learning) into game-based routines which can speed information and knowledge acquisition, it now seems to mean reward systems for ensuring that recommendations are positive and posted. So after the initial distrust of recommendations on travel sites – are hoteliers writing their own? – we now have well-regulated sites, but recommendations and feedback supported and encouraged by rewards, points, grades, stars dished out by the product or service vendor. So, after almost 50 years, we come back to Green Shield Stamps! And Badgeville is an excellent site of its type. It appears to be strong on anti-gaming logic – no one can fiddle with the rewards structure – and it is a PaaS (platform as a service) play which runs across all of the vendor’s web exposure points – resellers, Twitter, FaceBook, etc. But it worries me all the same – is human psychology so basic that just by moving a reviewer from one level to another or giving them more points for posting on Pinterest, you can, as Badgeville so delicately says “re-inforce valuable behaviours”. No room here then for quirky old folk who won’t pay for their sandwich until they have eaten it.

But if you believe in the power of recommendation, pop in and see GlassDoor  www.glassdoor.com). This new take on the jobs board allows existing and former employees to post their anonymous views of the pros and cons of a company as a place of work. I checked Forrester. Very enlightening. You would need a raft of points and levels – a Platinum Ego Stroke – to even create some valuable behaviours for some companies here. When people are fed up with the job, they are quite explicit. If they feel blocked or taken advantage of they also say so. In current global jobs markets this will not make much difference, but one day this interesting idea will have a market. Or maybe by that time we shall have fragmented work altogether in such a way that we will all be self-employed problem solvers. Last week I met a sensible man running a tech unit in a major company who told me that he used Mechanical Turk all the time to source expertise and solve problems outside of the reach of his current team. So I was not surprized to find myself looking at GigWalk (http://gigwalk.com), a way of using the smartphone to divide jobs into small pieces and spread them across different geographies, all the while avoiding full time employment or the tax and insurance implications of staff. How will we handle the marketing messages when we do not even know who did the research or developed the answers?

We have a lot of learning to do about the future of work, which probably means more three letter acronyms. Meanwhile I award points and prizes to the man last week who described his product development mantra as 3D (Discover, Design, and Delight), and his friend who described a V3 product plan (Velocity, Volume and Variety). Getting down to two letters is a behaviour that I would like to encourage!

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