My late father-in-law, Keith, was a wonderful man. Smart. Charming. Modest. He was an hotelier, well versed in the ideas of hospitality, loyalty, service and quality. I remember him pointing out to me a guy, who visited his bar every night for two beers. He said to me that this was his most important customer. In a hotel that ran conferences, exhibitions, events, this was his man. He calculated that one person coming in every night for two beers was more valuable than any event, banquet or party.
Loyalty and intensity must be the mantras for media companies in the next decade. Oh for Keith to be running the publishing business.
Intensity is the combination of frequency of consumption (issues per week, visits per week, pages per visit). The intensity multiplier equation is simple: Visitors times Frequency times Activity.
In print, reading times are falling. On the traditional Internet, visitors are rising, relative to print circulation, but pages visited are not. Meanwhile mobile devices, phones, tablets etc, are generating great intensity, but in relatively small numbers.
Loyalty is out of the window… Media consumers are increasingly, and rightly, turning to a wider range of media sources, something, they been doing so since the invention of radio. And – as I have reported many times - the more valuable the customer… the less loyal they are. To turn back to my analogy: does our value lie in irregular visitors, or our steady loyalists?
The London Times and New York Times have concluded that they can make more money from a few paying subscribing loyalists, than from relying on a thin mass-audience attracting advertising. Both are smart companies that invest cleverly in strategic analysis. But to me the maths simply doesn’t stack up, either in terms of the relative value of content payment or that of pay-per-click. They may be right. Oh, how I’d love to be wrong.
Multipliers are one of my favourite strategic tools. Small incremental, manageable, targetable actions, at each step in the value-chain that collectively, geometrically build into enormous growth performance (or in some case deletes negative performance by focussing on the causes of dilution).
Let’s take an example. A newspaper with a circulation of 100,000 copies.
* Typically people will be reading or buying it about three times a week (And don’t confuse six day subscription with six day readership - A major reason for cancelling subscription is the fact that people notice they are not reading every day). So how do we increase reading frequency?
* Next 100,000 sales translate into 220,000 web visitors a month. A ratio of 2.2. What do we do about that?
* But online users visit only around 8 times a month and view only 6 pages. What are we doing about these ratios?
Let’s say we can affect each of these multiplier steps by 1%. It results in an increase in online audience of 6%. A 10% lift increases audience levels by 70%.
But what are we doing about it? Zip all.
Given the dramatic news of the last month, I’ve unusually been watching a lot of television. Whether it is CNN, BBC World, Al Jazeera, Sky, or Fox, they all share one thing: Obsession with intensity. Between every programme is a look-ahead promotion demanding that we come back for more. As a non-TV viewer, I’ve been finding myself diarying viewing for nature programmes, comedies, and even (and don’t tell anyone I said this) Piers Morgan! Every presenter, anchor or reporter points viewers to their website.
I’ve been arguing for more decades than I admit, that newspapers must forward promote, to be told variously, “We mustn’t give our plans to our competitor”, “We don’t have the space”, “We’re being attacked by an alien species from planet Zog”. All of which translate to, “I’m lazy, insecure, and can’t be bothered with your marketing nonsense”. Tough doody!
Today it is critical that we take this on board. The Columbia Journalism School have recently produced an excellent report on the “business of journalism”, which presents the need for journalists to be more commercially minded.
It’s a great report, so I hesitate to say: “I told you so!” Our industry – in every department, at every level, must wake up to the reality of intensity, or lack of, and that it is an actionable and potentially profit-generating concept.
OK, so the New York Times can boast a ratio between monthly web users and print circulation of 188, The Guardian ratio is 125, El Mundo in Spain rates 69. The Sydney Morning Herald 22. But they all enjoy enormous international audiences. The reality is that US regional newspapers average 5.7, Spain 16.3. UK regionals 9.1, and Australian newspapers 6.4.
But my analysis from working with publishers, is that the “best of breed” publishers, focused on their local markets, can apply the multiplier concept to achieve page impacts per circulation levels of 13 times those of the average pack, by focussing on these few simple factors.
But I look at the average newspaper, or average newspaper website. Do I see a single look-ahead, or a single invitation or incentive to come back? No. Is there an adequate cross-over between print and web? No. Is a penny or cent spent on branding? No. Many of the major digital companies are now resorting to TV advertising to raise their brand profiles. Ironic isn’t it that these digital guys are turning to traditional media for branding, and we don’t get it.
We’re not losing friends because people don’t like us. We’re losing them because we’re simply not welcoming them back.
