“It’s only when the tide goes out that you learn who’s been swimming naked.” Warren Buffett, Letter to Berkshire Hathaway Shareholders, 1992
This year, irrespective of the rona virus, college students wishing to practice the art of throwing up while simultaneously catching chlamydia finished their early spring obligations and headed down as usual to Playa Del Carmen in Cancun. Once again the beach became a brawling mass of drunken gringo nincompoops gyrating in their underwear to hip-hop so wildly profane you should be glad the god-fearing locals don’t have a clue what the “lyrics” actually say.
This, my friends, is the market for which newspapers never built a successful news product. It’s hard to imagine that they ever could, the idea seems incongruous, even a digital product for a young audience like that seems beyond them and strangely irrelevant to their purpose — which says a lot about how we tend to regard newspapers, when you think about it. It was a failure that guaranteed extinction, for no young replacement subscribers ever came on board to replenish newspapers’ gray-headed readership.
There are several reasons why this market, let’s call it the Cancun market, went unserved.
First, traditional media editors — and even many in digital media — have never grasped the transformation in the media marketplace from mass market reach to targeted and measurable reach. The transformation began with the advent of database marketing in the 70s. The ability to identify individual consumers and track their behavior, including their purchases, led to direct mail, then to other forms of direct marketing. With the arrival of the internet, the trend picked up steam and began to radically transform the way business was conducted, in sectors as different as media and retailing. A slew of new companies emerged to ride the wave, like Google, Amazon and Facebook and others chasing vertical markets, each built on the accumulation, analysis and management of consumer data. Yet it seems never to have dawned on the editorial mavens that the earth had moved under their feet. When they think of their audience at all, they think of it as everyone between the ages of 18-54 who happens to live inside a particular area. They continue to think this even as the demand for their general bundle of content collapses all around them.
It has always been business as usual.
This is an epic failing. It demonstrates yet again that editors and journalists, like monks in a monastery, live in their own bubble, hermetically sealed from commercial and marketing reality.
These days in media you must identify a coherent group of customers to shape your stuff around.
Ironically, in the old days, before industry consolidation led to one-newspaper towns where reaching the biggest audience possible became the aim — which led in turn to the development of the big, multi-dimensional local newspaper that became the familiar staple of daily life —newspapers chased specific audiences. There were ethnic papers, labor papers, papers for the masses, papers for the upper classes too, and sporting papers and gossip rags, and broadsheets and tabloids for all kinds and for all markets.
For most of our existence, media in the U.S. was funded by barons and patrons looking to push their worldview. The idea of “objective” news publications funded by advertising and designed to cater to everyone in a local marketplace is really only true for a 50-year period of media history.
In the United Kingdom newspaper industry a rudimentary market segmentation based on class and political affiliation still exists, as this hilarious clip from the BBC-TV show “Yes Minister” illustrates:
On this side of the pond, the history of the New York Daily News provides another example of targeting a particular market. In the 1920s, the paper’s circulation was one of the highest in the country. But it struggled to attract advertisers, who saw it as a low-brow rag. Then the paper’s marketing chief, Leo McGivena, sent a young researcher into the Lower East Side — the heart of the News’ immigrant readership. McGivena synthesized what his researcher found into an archetypical reader called “Sweeney”, with a memorable ad slogan that proclaimed: “Tell it to Sweeney! (The Stuyvesants will understand.)”
Every day the entire paper was constructed with the mythical Irishman, Sweeney, in mind. Publisher Joseph Medill Patterson even wanted to re-name it “The Mirror” to reinforce the point that all his Sweeney readers could see their lives reflected in it. So successful was the positioning that advertisers came round to recognizing the value of the immigrant marketplace and the paper became the most profitable in New York.
Even Rupert Murdoch came to understand the importance of market segmentation. In 1976, when he bought the New York Post, bitter rival to the Daily News, he grew exasperated that Bloomingdales department store would not advertise in his paper. He decided to do something about it, so he invited Marvin Traub, then the chairman of Bloomingdales, to dinner. “Why don’t you advertise in my paper,” he asked. “Because,” said Traub, “your readers are my shoplifters.”
You may not care to define your market in those terms, but one thing is certain; trying to be all things for all people of all age groups, backgrounds and interests within the context of one news product is a recipe for disaster in today’s media business, particularly if subscription revenue is supposed to be the principal source of revenue. In an analog word, distribution is scarce and attention is plentiful. In a digital world, distribution is plentiful and attention is scarce. So unless your news product offers 1) original and engaging information that is 2) relevant to a particular audience and 3) differentiated from the competition, while 4) distributed through preferred channels, it will fail. Deliver commodity information to an undefined general market and you’re toast, especially if you think you can charge for it:
You cannot put a paywall on a pig.
Journalists are either willfully ignoring the shifting dynamics of the business in which they work, or they’re lost and bewildered by the complex challenge of building successful news products in the digital age. It’s not just a problem for newspapers, either. It is telling that many pure-play digital news companies are themselves built on replicas of print newsrooms, with titles and structures and all the processes of conferred status that reflect the same religious belief in the instinctive judgement of editors over market data and empirical measurement. No wonder so many of them have a problem gaining market traction.
That leads me to the second reason why editors and journalists have continued to ignore the Cancun audience. They don’t know how to approach it.
The news stories I happen to be interested in — and the channels on which I prefer to consume them — are very different from the stories and channels the nincompoops on the beach in Cancun prefer. I know this because I’ve asked them. And it’s amazing that so many in the news business have never bothered to do the same thing. Journalists occupy a strange and exalted place it seems, where somehow they are able to miraculously divine what the market wants without ever inquiring. But they can’t actually read minds of course, which is another reason why so many news products are struggling today.
In any other business sector jobs are lost for such poor performance, yet career journalists continue to exercise a stranglehold on the production of news nonetheless.
Last week a BoW reader emailed me a report from the Nieman Foundation at Harvard. The title read “The business case for listening to your audience is still murky (but early results are promising.” You couldn’t make it up. Here it is. I then came across a report from the Tow Center for Digital Journalism at Columbia. Called “The Audience in the Mind’s Eye: How Journalists Imagine Their Readers,” it reads like something a person wrote with a gun to his head after dropping a dozen Ambien. But it’s really worth taking a look at, for it chronicles why journalists are determined to continue to fly blind despite the availability of audience analytic tools and measurement data that have grown more insightful than ever before thanks to the nature of digital media. The report begins with a damning summary statement:
A central irony of the newsroom is that while many journalists’ decisions are made with readers in mind, the audiences for their work often remain unfocused, imagined abstractions, built on long-held assumptions, newsroom folklore, and imperfect inference.
According to Tow, journalists eschew analysis and data and research because they are afraid it will skew their news judgment. This means, I think, that they are afraid it will lead to clickbait and sensationalism, which tells me that journalists don’t trust, don’t respect and don’t understand who they’re writing for. Like I said, this is why journalism is in crisis.
It also explains why journalists are much happier talking about the tactics of acquiring and serving news audiences than they are discussing product and marketing strategy.
Discussion of reader subscription models and hard-versus-soft paywalls and different ways of measuring engagement and how best to craft a registration invite is safe and non-threatening for the group because it is intended to improve the performance of the current product without questioning its fundamental validity. Like this post, for example, from the Google News Initiative.
Because such discussion does not challenge the purpose, positioning and performance of the product, it does not threaten the self-serving culture and belief system of the newsroom and the editor-priests who preside over it. The problem of course is that focusing exclusively on incremental improvements in the performance of the current product leaves the larger, more important questions of market and audience ignored. The status quo lives, despite evident market failure.
It’s an easy step from here to the self-serving narrative of the insider commentariat, who universally blame private equity ghouls for the state of “the news” today, rather than the editors and journalists who have always controlled the product. One recently claimed that something called the “financialization” of the news is “dimming the lights of the local press,” It’s a lazy echo of the reference to the “corporatization” of the news in this article from 20 years ago: https://www.poynter.org/archive/2004/profit-pressures-over-time/
And it’s another easy step from there to the other great self-serving argument which goes that in this age of misinformation, the professional journalist fulfills an essential role in divining the truth. Everybody from Macedonian teenagers to Russian intelligence to determined partisans and politicians is held up as an existential threat, and it’s not hard to see why: the current media model is predicated on a limited number of gatekeepers acting as the primary source of information and they have an obvious incentive to maintain their position. I find this argument even shakier than the one that blames private equity for the death of newspapers.
The fact is that for half a century business, the political class and the press all operated within a broad, nationally-oriented consensus. But the internet blew up that cozy triumverate. The internet threatens media gatekeepers by giving anyone the power to publish. Mark Zuckerberg, by the way, calls this the Fifth Estate:
People having the power to express themselves at scale is a new kind of force in the world — a Fifth Estate alongside the other power structures of society. People no longer have to rely on traditional gatekeepers in politics or media to make their voices heard, and that has important consequences.
Presentation at Georgetown University, October 18, 2019
In his speech Zuckerberg is referring to language from the 18th century, when people began referring to journalists and the press as a “fourth estate” co-existing with three existing tiers in the British Parliament.
Sure, the implication of the internet making everyone a publisher is that there is far more misinformation on an absolute basis. But it also means there is far more valuable information available than there was previously. And I think young people, who live in the digital world, not alongside it, have little trouble differentiating between the two. The research seems to bear this out.
Fewer gatekeepers and more information means innovation and the spread of good ideas in at least equal measure to the flood of misinformation which people who grew up with the Internet are already learning to ignore.
It is hard to think of a better example than the last three months and the spread of COVID-19. From January on there has been extensive information about COVID-19 shared on Twitter in particular, including supporting blog posts, and links to medical papers, all published at astounding speed. In addition multiple experts including epidemiologists and public health officials have been offering up their opinions directly.
Nobody has chronicled the role of Twitter in all this better than Ben Thompson over at his blog, Stratechery. Click here to read his remarkable story of the Seattle Flu Study, and how Twitter was used to break the news that the virus had arrived in the United States.
So, the stranglehold of the Fourth Estate is breaking down because of the openness and pervasive reach of the internet and because the newsrooms of the Fourth Estate, by never learning the art and science of building digital news products for new audiences, left a vacuum for others to fill. Their product leadership proved deficient in the fundamentals of contemporary marketing, including market segmentation, database analysis, brand affinity and subscriber acquisition and retention. Their culture proved impervious to change despite the most powerful incentive of all; the very survival of the newspapers they profess to love. So now they are being superseded by a variety of digital media forms, several of which enable multiple voices to bubble up and find their own audiences, wherever they might be.
Newspapers are not dying because of rapacious owners. No. They did themselves in. Unable to come to terms with that truth, their editors will continue to blame the “financializers,” to look for handouts, and to whine about “news deserts” that are in truth not places where “news” is unavailable but rather just markets without a daily local newspaper.
So, the only audience remaining for them – in print or in digital form – is an elderly one, the last segment left with loyalty to print media, an audience busy getting its affairs in order and quite possibly under the influence of Dean Martin.
Hip-hop on the beach down in Cancun?
That’s what Easter bunnies do.
BlastofWinter 