It's that time of year.
The accountants are lurking, asking for initial thoughts regarding 2012.
From my experience there are two approaches to business planning.
The first is to simply say: "What are your figures for next year?" The battle soon joins: The commercial guys are overly ambitious on revenues. The accountants are overly demanding on costing cutting. The result: epic fail.
The second is that a business development process is created, through analysis and strategy formulation, after which the figures follow.
I have a confession to make. I have friends who are accountants. I hope that doesn't put you off reading my articles, or being my friend. Some accountants are quite nice people. But in the last decade our business, in most cases, has moved from being emotionally driven - and we are a creative industry are we not? - to being a numbers-driven industry.
Which is better? To have newspapers in the ownership of rich, over-opinionated megalomaniacs and egotists, or those that are owned by hard-nosed financial vultures? There's an alternative: a positive compromise where attention to the demands of the market, readers and advertisers leads to growth. That's a much better conclusion than the accelerating decline the industry is experiencing - a decline caused in part by the two extremes of current ownership.
Take a look
So if you are pondering the strategic issues for your plans for 2011, here are some ideas:
1. Revisit print - Don't believe everything you see in our own medium. Yes circulations, and consequential advertising revenues, are under pressure. But the reality is that globally, only around 8 percent of the industry's revenues are from digital. In the United States, that percentage is a bit higher, around 12 percent, but still nowhere near enough to sustain the business.
Media journalists and trade organizations are obsessed with the failure of print, congregating on the alter of digital. It is MediaNews' William Dean Singleton, one of our industry's great visionaries, who said that the best thing newspapers could do to increase share price and reduce costs was to sack their media reporter. Indeed, print is suffering far more from lack of love and attention than from the incursion of the Internet.
2. Remember branding - Because of our lack of love of print, we have forgotten our brand values. At a time when digital companies are increasingly using traditional media to promote their brands, newspapers have disappeared from the consumer landscape. Why does Coke spend 14 percent of its turnover on advertising, but we spend less than 1 percent?
3. Don't forget your customers - Newspapers aren't losing customers. They're losing loyalty traction. Yes, circulations are declining, but, in the United Kingdom at least, while average issue readership has declined by 17 percent in the last five years, "ever" readership has declined by only 3.7 percent. In terms of advertising, my analysis shows that while revenues have remained relatively stable over the last decade (OK, in some markets there have been economically-driven declines), advertiser count has halved. And my consultancy work with advertising directors and accountants indicates that there is little or no awareness or measurement of these trends. All of these factors are measurable and actionable. We're not talking Nobel Prize science here. This is simple implementation and a few simple templates can provide the tools to deliver performance improvement.
4. Understand the migration of advertising - Today, companies devote only a third of their marketing budgets to traditional advertising. Contrast that to 1991, when companies earmarked almost 70 percent of their promotional budgets to the same objective. Yet newspapers remain focused on traditional advertising. Instead, they should be examining alternative forms of marketing revenue.
5. Challenge cross-media ownership bans - The world of cross-media ownership is blurring. Regulators are continuing to live in a naive bunker, where each medium is considered in isolation. Yet the reality is that in the digital world, cross-media playing is logical and realistic. Publishers must become more assertive in, first, legally challenging the illogicality of this process, and, second, becoming more inventive about how they can develop alternative services in the new, digital, non-regulated age.
6. Cooperation is not bad - Outside the United States, newspaper companies are pathologically incapable of partnering. In part, it's ego. In part, it's an inability to envision the market landscape. But with an approximate 8 percent of the global communications industry, newspapers can hardly be described as predatory or monopolistic. There remains, however, a paranoia about newspapers working collectively to create a shared online newsstand service or to collectively sell their advertising value, other than generic marketing imagery.
7. Journalists are publishers - Journalists have always, and understandably, been reluctant commercialists. Those days have gone. My own experience is that as soon as journalists are offered a bonus, based on company performance, they soon come into line. Meanwhile, so called "paid-for-content" is becoming more acceptable. I've had two recent projects from so-called fast-moving consumer goods companies seeking to "place" content in newspapers, in print and online. This coexistence has existed in magazines for years, but is still a reluctant entrant in the newspaper world. In reality it not only can enhance advertising revenue, but also can attract readership.
8. Change working practices - Two experiences come to mind. The first is from a friend of mine who examined the work of his team at dozens of weekly newspapers. He concluded that the papers' staff members worked inefficiently two days a week and were overworked the other three days. The solution: a workshare strategy, where staff members "shared" the workweek. Some days they worked only part-time; other days they were at the office from 12 to 14 hours, in order to produce their papers. The result was that staff on average worked the same number of hours each week, but fewer at the office, thus cutting operating costs.
Second, job-sharing. In a previous life I was told that job-sharing was disruptive. Not so. I discovered that having two people working half time results in two 50 percent salaries, but with each person generating a productivity rate of about 70 percent. In creative roles - and we are after all a creative industry - I would argue that the creative output is 100 percent. Does a writer produce less good material in four hours than in eight?
9. Measurement systems - As an industry, we continue to under-measure our business. As I've written before, we do not track advertiser count, or the impact of purchase frequency, or the relationship between circulation and online audience. Yet all of these measures provide simple indicators of business improvement. Similarly we reject ideas of measuring editorial performance, because, somehow, it is heretical. But within these measures is an opportunity to increase our business performance.
10. Management cycle - Finally, there is the issue of the management cycle. Most companies work on the basis of quarterly reviews. The smartest newspaper company I worked for had three board meetings a year: A budget meeting. A review of performance. A further review and preview of next year. No messing around. It followed logic and the economic cycle, and minimized the relentless cycles of reporting.
After 35 years in this business, what is interesting to me is how simple it is to begin using these practices. A two-day workshop can instill into a management team a new set of principles that can be adopted, implemented and tracked on a week-by-week basis. Is this quantum mechanics? Or am I confused?
Jim Chisholm is a France-based media consultant. He can be reached at email@example.com.