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May 06 2010

14:30

The Newsonomics of simplicity

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

More and more, I’m thinking we’re making this new digital business too complicated. Sure, the technology behind the business is awe-inspiring — but then so was hydropower and electrification. Technology is often complex and developed by only a minority of us, while a majority of us are put to the task, and the fun, of using it.

The digital news business itself can be a blur, followed via Romenesko, Twitter, or the PowerPoint poison of your choosing. Lots there, always on. But business solutions — serving readers and advertisers better — aren’t complicated, and the more complex we make them, the less seems to get done.

Take this well-used quote from Larry Bossidy, once chairman of Honeywell, a prince of another technology era: “If you can’t describe your strategy in 20 minutes, simply and in plain language, you haven’t got a plan. ‘But,’ people may say, ‘I’ve got a complex strategy. It can’t be reduced to a page.’ That’s nonsense. That’s not a complex strategy. It’s a complex thought about the strategy.”

We can parse the differences between complex and complicated in the digital business, but won’t do it here. Probably the better exercise is to see how good a strategy you can express in a single tweet. And, of course, the collective consciousness has that figured out; small business blogger Lora Kolodny talked about the art — and four competitions based on it — recently in her New York Times blog.

Recently, as I look at the latest strategies being deployed, I’ve been using this emerging prism of simplicity. Here the newsonomics are simple: Make it easier to make new revenue; save expenses by adopting simpler solutions. I’ll share a few here, and hope you’ll add to them.

  • People love coupons: That’s at the top of the duh list, but the love is still eye-popping. Nielsen recently reported the explosion of digital coupons, with their redemption up 263 percent year-over-year. According to the report, newspapers are still the main source of coupon distribution, at 89 percent, and newspaper inserts account for the most coupons redeemed, at 53 percent. As Twitter studied commercial patterns, in the run-up to launching Promoted Tweets, what did they notice? Retailers like Whole Foods and Starbucks found their followers (and Facebook fans!) loved coupons. So now the challenge: taking that simple challenge and delivering location-aware, buying-interest-aware coupons, on the right platform, to the right customers, at the right time. Yes, that Wednesday food coupon is less old-fashioned than we think; now the simplicity required is finding the right technology to seamlessly offer digital coupons to news customers — before non-news companies do a better job of it.
  • Flyerboard: I recently talked to Victor Wong, one of the co-founders of Flyerboard, the oh-so-simple digital ad flier product that now finds itself on more than 100 newspaper sites, first adopted by Hearst and most recently by McClatchy. As a Yale undergraduate, he and a couple friends noticed that someone had begun digitizing the printed fliers commonly found on college neighborhood kiosks and walls. They then opened a company — PaperG — moved to commercialize the notion and have found great early uptake, based on an incredibly simple idea. They are now moving forward with PlaceLocal, a potentially far bigger idea: Harvest all the freely available digital information about local busineses, sweep it into templates, create spec ads on the fly and sell those to local retailers. Both ideas simply use already available information, repurporsed by smart technology and a company of a dozen or so people.
  • Outsourced regional editions: Okay, so you are The New York Times, and you want to double down on local engagement. You want to be a great national paper, but also a little regional, aware that such content might increase retention of all-important print subscribers. But you’re The New York Times, and the economics of the business don’t justify paying six-figure salaries to new regional staff. So you ask where can you get high-quality, low-cost journalism supply, and take advantage (in a symbiotic way) of the advent of the Chicago News Cooperative and Bay Citizen. You simply take advantage of the outflow of real talent out of top newsrooms — and stretch your six-figure payments to get lots more content than a single staffer would provide.
  • Content management in a cloud: Emerging from bankruptcy, Freedom Communications just announced an expansion of its relationship with technology provider DTI. It will move what had been its own hosted circulation and marketing management to DTI Cloud. Why hire, train and pay your own full-time tech staff — at each paper, I’d imagine — when a single company can give you a hosted, software-as-a-service solution in the cloud? Simple, in concept, at least: use someone else’s centralized technology to solve a problem that is replicated multiple times across multiple properties. Cloud computing, of course, isn’t new, but the newspaper industry has adopted it unevenly. MediaSpectrum (ads and content management) and Clickability (content management) are among the companies that have worked this cloud landscape in the news industry. Cloud “installations” carry their own support issues, of course; all solutions do. We’d have to believe, though, that the often-complex and costly solutions to production, printing, distribution, finance, and HR used in the news industry can benefit from some more heavenly solutions. Better to slim here and put resources into content creation and ad selling.

That’s just the top of a list. What else has the news industry done to introduce smart simplicity — or what else should it do?

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