On Becoming Digital, Pt. 2: The Business Model for Newspapers

In Part 1 of this series, we discussed the broader aspects of “becoming digital”. We posited that "becoming digital" is about deeply “understanding the consumer” and developing capabilities to “engage that consumer”. In Part 2 of this series, we discuss “becoming digital” from a newspaper or publisher perspective.

Newspapers, as a market segment, have not been able to replicate their print business model in the digital world. In the print world, there was no need for newspapers to “really know and understand the consumer”. The same approach will not work in the digital world where the consumer has multiple choices for any product or service. E-Papers (a replica of print with suitable technologies to view content) has not worked. The problem further becomes complex in the mobile world, where screen sizes come into play.

On a global basis, in digital formats, newspapers in digital format are embracing a programmatic approach to source advertisements for their normal and mobile websites. Unfortunately, almost all browsers today have ad-blockers and in-display such advertisements are blocked. Newspapers have adopted one of two approaches to handle this problem: 

  • Newspapers like The Australian in Australia or the Hindu in India have gone in for a full subscription model where online/digital readers must subscribe (this approach has been taken up by a few bold newspapers globally). News is available for free and global businesses like Google leverage this opportunity to prosper. Please refer to https://www.theguardian.com/technology/2019/jun/10/google-news-revenue-2018-new-study
  • Newspapers like The Age in Australia or The Indian Express in India use programmatic advertisements and when readers have browser-based ad-blockers, content is displayed without ads. Such newspapers “cannot guarantee” performance.

Newspapers have also created mobile apps. In this space, newspapers compete with new-age content publishers, who use a mobile-first approach, provide news in formats conducive to mobile users who are time-poor. The look and feel of newspapers in the mobile app format are completely different from traditional print.

Just having a website or a mobile app are just small steps in becoming digital.

Monetizing in the digital world is also very different from that of the print world. For marketing in general and digital marketing in particular, “Return on Marketing Investment (ROMI)” is slowly becoming a well-defined quantitative figure. Advertisers, brands and agencies now are focusing on “performance marketing”, seeking hard data on reach, interactions and engagements. This requires deep customer knowledge which was not necessary in the print world. Programmatic ads may or may not work given the constraints imposed by ad-blockers. Further programmatic ads are not necessarily the best options for advertisers, brands or agencies to “tell the brand story” as this needs engagement. 

Given all the above factors, “becoming digital” from a newspaper’s perspective boils down to three important core capabilities:

  • An ability to cost-effectively create and distribute content through websites and mobile applications and engage digital consumers and understand customers 
  • An ability to assist advertisers, brands and agencies to “tell the brand story” – improving monetization
  • An ability to attract digital consumers – growing reach

In practical terms, this will require a newspaper to implement four key capabilities, namely:

  • Content management;
  • Data collection and analysis;
  • Integrated monetization; and
  • Digital marketing.

Content Management
Any Content Management System (CMS) is required to support both browser-based websites and key mobile platforms (i.e. iOS and Android).

Figure 1: A typical CMS structure

By default, all content is assumed to be interactive rich media and delivered in real-time. Today many newspapers use multiple technologies to achieve this becoming expensive IT houses in the bargain.

Data collection and analysis
Capabilities to collect and analyse data are required to provide deep analytics for insights extraction.

Figure 2: A typical data analytics process

Ability to collect data in every step is vitally important today. Purely relying on postmortem data from solutions like Google analytics related to website interactions will not provide the deep insights necessary. Brands, advertisers and agencies need real-time engagement data (performance marketing).

Integrated Monetization
The “digital inventory” of the newspaper with consumer insights and ability to engage must be exposed intelligently to brands, advertisers and agencies in real-time.

Figure 3: A typical content monetisation structure

Such a real-time solution will offer advertisers, brands and agencies several advantages over current complex and inefficient programmatic processes.

Digital Marketing
Intelligently advertising the “digital content inventory” through mobile notifications is the simplest way to encourage mobile readers to click and visit the news article. Such notifications can be sent to consumers through newspaper apps or as notifications through any other app (as a news update) under a commercial arrangement.

A smart relevant ad will get a good response when placed next to the right content: https://www.marketingdive.com/news/neurological-evidence-shows-halo-effect-for-mobile-ads-from-surrounding-con/559108/.

This calls for innovative business models and a strategy to leverage relevant ads can be put in place to expand readership with no extra marketing costs.

Summary
In summary, we return to our magic quadrants as discussed in Part 1 of this series.

Figure 4: The Magic Quadrant

A screenshot of a cell phone

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As such a newspaper traditionally is in Quadrant 1. If efforts are spent in understanding customers and coming up with new-age solutions to engage them, the newspaper can migrate to other quadrants.

To capture back its erstwhile dominance of the print era, a newspaper must develop a strategy to become an ecosystem. Leveraging its inherent abilities to create engaging news content and options to attract and engage digital consumers, the newspaper must leverage the complementary capabilities of other businesses to become “the place to visit” for specific segments.  

A true business-ready digital ecosystem calls for:

  • Ability to create and distribute engaging “relevant” content through right channels at the right time;
  • Ability to track consumer engagements data and capabilities to extract insights from engagement data; and
  • Scalable technical platforms that can integrate with complementary businesses and support flexible business models.

In Part 3 of this blog, we will explore telecom carriers, ISP’s and Wi-Fi operators.

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Ananda Rao
Founder and Chief Executive, Infomo Global

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