Can Publishing Brands Sell Online and Deliver Customer Loyalty?

The question occupying all media folk is ‘will content sell online?’ To which there is not yet a satisfactory answer.

Why?

I suggest that the question itself is nonesense and hence the argument for or against the sale of ‘content’ is fallacious.

Okay, that’s a big claim, so where am I coming from?

I’d suggest that in the real world (or offline) no one ever buys ‘content’. They do, of course, buy newspapers, books, magazines, reports, directories etc… all of which are brands – or bought mainly because of the brand and only on occasions because of the content.

When I buy a newspaper, I am buying a package. Yes, I get ‘content’, but that content is wrapped within a brand.

Brands have trust and values and relationships with me and other consumers. But publishing brands have more – they have a voice – a set of coherent opinions which lead me (willingly) to see the world through the eyes of the editor or author.

I believe that in traditional form, we have always bought the brand first and content second, although I accept that we can be seduced by a headline or enticed to buy a evening paper to read the cricket score on the way home.

However, most content brand purchases are repeat purchases. I buy Animals and You for my younger daughter when I pass through the airport – I used to be interested in the free gift, but no more – as I know she likes it what ever content it contains.

So, the ‘content’ argument has only occured because the internet allows us to break up the brands into pieces of content. This was never possible before – you couldn’t buy a single article from The Times Newspaper, so the question never arose.

But here is the interesting thing. I love the new layout on Yahoo.com. It allows me to place all my favourite brands – and even my own brands – on the left hand column – so every morning I can review all the new headlines from my favourite brands before I decide which to read.

My use of google has fallen – and I probably spend 90% of my time on my favourite brand sites. I bet yours has too?

We are beginning to see the creation and defense of internet publishing brands.

So, I think we – as consumers – begin from the aggregate or brand.

Take a novel even. You may argue that you buy the novel because of its content? I would disagree. You can not sample the content of a novel until you have read it – at which point you either don’t need to buy it or just return it to the library. However, some people do buy their favourite books that they have already read (from the library).

Music is different – as you can sample or even listen to the whole track on the radio before you buy it. Hence, it makes sense to sell tracks on the internet – but books are not the same.

With books I am buying into the brand – the brand of the author, the review on the back cover, the brand of the bookshop, how it feels in my hand or how it is laid out before my eyes on a screen. I may also be seduced by the price offer or the title or the smell of the book. I may even sample the content – read a page or two – but this is just to confirm that the contents are as I expect them to be – that they are consistent with the branding messages.

The reason Huffington post (a free online newspaper) does well is because it is a very powerful brand. One of its brand values is free access and make a donation – that is written into its DNA. I wouldn’t like to run this publication as it is deeply political and close to fund raising and quite a long way from publishing – but that is what it is.

I don’t expect my favourite newspaper to behave like this – and my relationship with it can be different so I’ll pay for it even though the Huffington Post might be free.

When we think first about ‘what would make you buy this brand online’ then I think we can have a debate about how to make content sell.

If a FMCG company starts from ‘how to make money from my online brand’ then one of the first things it does is start publishing or pushing ‘content’ onto Youtube etc… This makes us think that they are publishing businesses – which I would disagree. They are brands that are using publishing and broadcasting to sell. They are treating it as a marketing channel.

The challenge then, for media companies, is to ensure that their brand remains relevant for its audience and I believe that the essence of this lies in the transparency of media, which is not what you expect if you play a video game provided by a product seller.

Now, the argument is turned on its head and we ask ‘will publishing brands sell online’ we can have Polish newspaper launches (from a German publisher) making money and we can have a free to air political online newspapers.

It all makes sense – each is sticking to its brand. Which is truely the only way to make money online.

Internet's 3rd Phase?

Is the development of the internet entering a new 3rd phase? I think so. And curiously, this phase is driven by credit and business needs not technical developments.

In the first phase – pre 2001 – the Internet was the modern equivalent to the goldrush. Lots of people were selling up and going for broke. Lots of these people broke down on the way, lost everything and made a real hash of it. But whilst this phase did burn a lot of money it still make some unknown people multi-millionaires. Some temporary, other permanently.

Equally, this first phase was the stage during which the infrastructure was laid down – domain rules were set, cables buried beneath streets, broadband was developed – but not yet distributed.

Phase 2 began after the 2001 tech bubble burst. During this second phase the internet went into a maturing phase and we saw proper development of internet marketing service companies. Pay per click became established and videos moved online too.

During this phase we saw You Tube sell for mega bucks and Google become a massive company with a worldwide brand. However, we also saw a lot of boutique and home businesses get established offering web design, writing and marketing/ SEO services.

We also heard the talk and early experience about web 2.0 – where the users create the content. This has morphed into Social Media – where the users ARE the content – the site is simply a bunch of tools hung together under a (trusted?) brand.

We also had the disappointment that most user generated content is rubbish and realisation once more, that there is no such thing as a free lunch. You can’t put up a webpage and expect millions of people to find it or even to contribute anything but self promotion and spam UNLESS you invest hours and hours of editorial management and development.

In this 2nd phase collaborative tools were developed online, but like broadband before, they were not widely distributed. And just as broadband became universally available and widely distributed in the 2nd phase, so social media and collaborative tools will do the same in phase 3 on the internet.

Phase 3 began with the global credit crunch in which business models collapsed and all businesses began searching for new and cheaper ways to find customers and do business. Hence, they are naturally turning to the internet.

This 3rd phase is killing local newspapers as we all search online or LinkedIn for our next job and no one pays for job advertising anymore.In this phase we are seeing the splintering of google’s control as we have ‘knowledge engines’ to go alongside search engines and a large number of niche based websites will be created and will achieve success – there are enough users online these days. Google will become the lumbering giant that Microsoft once was in phase 1 as new concepts of search and information/ ideas delivery bite into their marketshare.

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Too Much Traffic - Too much Spam?

Please stop spamming – just Network!

So say many of the forums that you’ll find on fast developing social media sites like LinkedIn. Initially, this looks sensible – but look under the lid for a minute and you’ll find a big can of worms.

What it usually means – when it comes from the owner or controller of the forum is that too many people are using the forum simply to promote themselves – with blatant ads and links to their own content.

What the owner of any forum would like, ideally, is for everyone to have a link to his website but to restrict the access to other people’s websites.

This is natural, because the purpose of running a forum online is that for all the free work that you do – you get some publicity and business in return. If all the business is taken by others, what’s in it for you?

Okay, the forum owner must allow SOME business to be done between the forum members – otherwise the forum will consist of newbies asking questions and anybody with an expertise or valuable opinion will be too busy earning money to waste time answer the same old question.

In this scenario, the forum becomes a wasteland of newbie questions and there is no valuable discussion.

So, social media is attempting to balance a seesaw. On the one side the discussion must be reasonably interested and people need to be willing to invest time making considered comments. On the other hand, these same people need to see a return for their investment. If they don’t, they’ll leave.

Too much of one thing or another and the seesaw will crash down on one side or the other and the participants will disappear.

Now, you may say that not all forums are about generating new business – and this is true – but even a Philosophers Forum – also on LinkedIn – has people who ‘have agendas’.

Now the Agendas on the philosophy forum might not be ‘buy my product’ but it will be something like ‘agree with me that capitalism is bust and I should become the despotic ruler of the world’.

Okay, I’m overdoing the point – but still, you get the point.

So, where does social collaboration work best? Well, this remains the software industry where Linux and WordPress etc… have developed free platforms.

Why do developers give their time for free? Two reasons, one is kudos and the second is that great developers are asked to do high value integration work of all the free stuff – ie get to sell their services.

The problem with so much social media is that it can easily swing the wrong way. The seesaw can come crashing down and you’ll be left with a load of unanswered questions or just a load of raw adverts.

So, how do you design forum rules that work? Perhaps the answer is that you don’t even try! This is the smart thing that LinkedIn does – it allows the forum to be owned by the manager – so that if everyone gets bored of a spamming forum, they can split up and form new groups themselves – all the while remaining on LinkedIn.

But, I still wonder, once we go back to a normal business world – will we still use the social media in the same way?

Job hunting – or perhaps Freeland Contract hunting – has moved online and LinkedIn is well placed to benefit from that shift in employment status.

However, traditional publishers looking to develop online presence are at huge risk when they say ‘let’s do a Face Book type thing’.

The reality is that we are all online to promote ourselves – and yes, this is no different from the traditional media world – only the self-promotion is more obvious on the web.

Perhaps then, we should stop saying ‘no spamming’ and just say ‘self promotion is cool – but prove you’ve got something worth promoting first…’

So, rather than outlawing spamming, we should accept that a thriving forum depends on spamming – but is killed by too much!

This would mean that our forum rules need to be structured to allow posters to include a link to their website in their signature – but not place live links in the subject or body of their posts.

The opportunity here for publishers is to charge for the right to include a signature – or allow it to be earned.

Perhaps when someone makes a post he earns a star? When someone ticks an ‘approve of this post’ he gets another two stars – and if someone ticks ‘disaprove of this post’ he gets just one star.

Note, the function of ‘report this post’ is different from saying you disagree or dislike the conclusion of the other post.
These stars can then be used to enhance someone’s reputation (Kudos) and would then allow them to include a signture (for free – as a result of their earned stars).

You can imagine a scenario where the number of clicks on a Top Star posters’ signature would be significantly greater then the clicks earned by a 1 star poster.

Thus, the forum starts to reward those who post well and intelligently – but does not penalise those who share a different point of view (because a mark of dislike is a sign that someone may be saying something valuable but uncomfortable – unless the post gets reported for abuse, which is different).

The method of ‘earning’ on a forum has not been yet been successfully developed. Until it does – and perhaps it will come out of a major social networking site – these sites will not gain stickiness.

In other words, these sites depend on the ability to bring expert opinion to bear on the forums. And, that once there, the experts stay there.

Without this – the Social Media businesses are dangerously wobbly and whilst they may use their size of network reach to hold people in their site, there will be plenty of opportunity for niche social media sites – if those sites get the balance of effort and reward right between both the poster, post readers and forum owners.

This is a challenge that has not yet been overcome and so it both a huge opportunity as well as the biggest threat for social media.

Obviously the answer to the question posed in the title is ‘Both’. In this blog I’m going to explore the nature of the threats and opportunities posed by online and new technology, expose a few myths, and provide an outline strategy for adding value to your print publishing business.

Where are we up to with online publishing?

Ever since the web started to hit the mainstream back in the late 1990s people have been predicting the end of publishing as we know it. Let’s look at some of the things that have been tried since then and where they’ve worked and where they haven’t. As a quick review this is clearly glossing over a lot of detail.

The first response from publishers was to put magazine content in so called walled gardens online – websites run by internet access companies like AOL or CompuServe – where content providers looked to earn subscription fees from people paying to get their content.

This didn’t work, and publishers looked beyond the walled gardens to set up their own websites, extending their brands into online and targeting subscriptions and advertising.

Again that didn’t work, and, worse than that, a new breed of online-only competitors entered the market.

Publishers then largely dropped the subscriptions to focus on advertising revenue (of the major newspapers the FT is now probably the only one to still have paid-for subscriptions, with even the Wall Street Journal finally throwing in the towel).

To get better advertising demographic data the publishers still required people to join and provide email addresses so that they could send emails and track user behaviour. Email marketing proved more powerful than web marketing.

The early 2000s brought the period of the ‘special report’ and the ebook. Longer-form reports and ebooks started to sell online, and magazine publishers that offered these specials were able to start making money both from sales direct to consumers but also from the advertising sponsorship.

With the vast expansion in small publishers offering ebooks, reports and blogs came the biggest challenge – how to be found? With customers drowning in spam, email became less likely to be delivered or read. With the rise of Google if you couldn’t be found on Google’s first page of results for your market you likely couldn’t be found anywhere.

In recent years publishers have even begun to drop the requirement to register for free for access to their content – partly in order to boost readership and so advertising revenue, and partly to boost their visibility in Google’s all-important rankings.

Long form special reports live on now only really if they can be advertising funded or sponsored rather than sold direct to consumers. There remains a market for paid-for content on the B2B side, but this is most sustainable where there is large amounts of proprietary data under control, or where there are extremely strong brands (e.g. The Economist).

So in general, what we’ve seen is a headlong dash to give away more and more content for free online in a market where it’s harder and harder to be seen and be found.

So where does that leave print publishing?

Print publishing is in a very interesting situation. Faced with the deluge of information on the web, often available for free, customers are having different problems.

One is that they can’t trust what they are reading on these millions of free websites. As a result there is more strength in having an established brand and readership that trusts the editorial content of your publication.

Another is that reading online, even with a laptop, is inconvenient, and printing is expensive (1ml of HP colour inkjet ink costs £1.70, compared to 23p for 1ml of 1985 Dom Perignon vintage champagne). A professionally printed copy of a magazine is read differently, and competes for a different share of the reader’s time – a share of their offline time.

A publisher with print titles has a unique offering, which, balanced with the right online elements, can bring great strategic advantage and long term value to the company.
So how should online and print media be used together?

The key to getting a real return on investment from print and online media together is to focus on the fundamentals – manage costs tightly and drive out every bit of revenue.

Revenue in publishing either comes from advertising or subscription. The most important question to ask before making any change to either online or offline publishing is ‘Will advertisers or subscribers pay enough more for this if I change it?’

What adds value for subscribers?

The answer to this question depends on having a good knowledge of your subscribers. If your subscribers are businesspeople, then look to see whether online services can help them grow their businesses.

If you have a large number of subscribers who run small businesses then they may not be able to profitably take advantage of online opportunities, but you could bring them together.

One concrete example could be where subscribers run highstreet businesses selling a physical product. Offering a simple online e-commerce site for your subscribers might give them another route to market, and the content on the site would boost your and their search engine rankings.
The answer for each type of publishing business will likely be different and will depend on their particular subscriber base and markets.

What adds value for advertisers?

Looking at the advertiser’s business can help here, but the main answer is likely to be to help them to sell more of their products.

Check that you’re not missing some of the simpler options first, like having an email newsletter. As a print publisher you have a stronger relationship with a customer than you do as an online only free content provider. This means that people are much more likely to read your emails – if you ensure that they have something interesting and useful in them.
This provides you with a simple extra marketing channel to place adverts in.

Again, the special reports option is worth exploring – this is likely to work better for a print and online publisher than it will for a pure online publisher because of the greater loyalty and closer relationship you have.
So what’s the bottom line?

The bottom line is that print publishers have a real strategic advantage over online-online publishers.

By carefully considering the added value for subscribers and advertisers of each element of your offline and online presence you can cut costs and add new revenue streams.

It’s not all doom and gloom in print publishing, and you can act now to protect and strengthen your business.
That’s all for now – I hope this post kicks off some thoughts. It can only scratch at the surface of this subject so let us know your thoughts and what works / doesn’t work in your business.

Is the Internet Killing Local News?

Take local newspapers. These businesses are closing down at a greater speed in this current recession for two reasons.

Firstly, their business models have been weak and the market oversupplied for some time. And the second is the internet.

Local newspapers come in two varieties, the free circulation ones and the paid for readership type.

The free circulation papers have relied entirely on advertising for their revenue. And this revenue comes from 4 key areas – selling property and related products, selling new cars, offering jobs and classified advertising (ie anything second hand).

It doesn’t take an expert to spot that the first three sectors are dead for different reasons. Property isn’t selling and developers aren’t building – so there is next to nothing to offer. Cars aren’t selling either, but the advertising budgets that remain are focused at a national level to stimulate national demand with attractive advertising – rather than offer local opportunities to purchase.

Why is this? Simply, in a recession people care about price and value more than convenience. The local showroom offers convenience it might not offer value, so customers head off onto the internet to source alternative offers.

Thirdly, there are very few jobs. Or at least, those jobs that are being offered are specialist jobs and not typical admin, telesales or retail – the bedrock of local newspaper job advert sales.

Again, jobs are also moving online but in a different form. For instance, more and more jobs are being offered (or advertised) directly amongst existing circles of networks – and this has been made possible by business social networking sites such as LinkedIn.

The barrier to receiving or offering a job on LinkedIn comes down to two aspects – geographical location and language.
Of these two, language is the most rigid, in that if the job requires fluent French and you only speak English, then you don’t get the job – no matter how clever or smart you are. However, for the right job, you’d move anywhere in the UK, right? And possibly abroad?

In a similar way, someone hunting for a second car in Bracknell might be willing to buy via ebay from a seller in Newcastle – but he won’t buy from a Calais seller, even though it is closer.

Again, let’s ask why? The answer is clearly language, but also in this case, the car will be equipped wrongly with left hand drive instead of right hand drive.

What this tells us is that language is the rigid barrier to products and services and many of those products are services are designed at a national level. Therefore more and more of the products that were sold locally are now sold nationally.

So, the trouble of local newspapers is that their attempts to go online have failed because they have attempted to keep their websites focus on ‘local’ whereas once a customer is online he wants the maximum feasible choose – and that makes the web national at least, and international in some cases.

For this reason, ebay.co.uk beats local newspapers for classifieds because it is national, not least because you pay once for national coverage and not repeatedly for each local newspaper edition.

So, the strength of a local newspaper – its local distribution network – is lost the moment it goes online because of the nature of its traditional business model.

You might argue that local newspapers still perform a service that customers want in covering the results of local football games (say). And it is true that this is a service that people want, but the point is that as soon as you put it online, you might as well cover all local football events across the English speaking geography. That means the UK and Ireland to start with, but could equally include any English speaking country.

Therefore, the internet destroys the local advantage in all these respects.

However, there is still one thing that happens at a local level that will never happen at a national level and therefore will seek localised advertising opportunities. These are events.

For instance, if I want to know which English country houses are opening their gardens for public visits this spring, I will look locally.

I may be willing to travel an hour from my home or even two – for something special – but most events will be advertised and consumed in a local area.

Therefore, local newspapers need to become What’s On guides to the local area and close down their ‘me-too’ attempts to sell second hand cars online. They will not defeat ebay.

Sadly, to date, the internet strategy of most local newspapers has weakened the one thing they have in their favour – the local franchise. But, there are alternative internet strategies that do leverage this advantage. In the next few years, those local newspapers that survive will be the ones that successfully develop What’s On guides and move them onto the web plus similar strategies.