John Juliano: The new normal

Jun 29, 2015 at 02:01 pm by Staff


It's sailing season here in Seattle. In six or seven weeks I plan to be sailing up the east coast of Vancouver Island.

Almost all of my navigation will be done using a tablet and a mobile phone.

I've been thinking a lot about mobile lately. I'm on the road again and have stopped taking my laptop.

After a recent short dalliance with a paper newspaper, my reading has all returned to digital: a laptop at my desk, a tablet when I have a choice and my mobile phone when I don't. The question I am asked, both personally, and in sales situations is whether magazines and newspapers should be read in their facsimile (PDF) form or in a strictly digital form.

While I enjoy looking at a nicely laid out pages, where generations of experience in producing an eye-pleasing layout shows, I find it a terrific nuisance to try read article on tablet without switching to the text-only form. Millennials don't even understand the question.

It's clear to me at least, that the mobile experience needs to be as eye-pleasingly attractive as the print experience. A quick survey of American newspaper websites and mobile apps would seem to indicate this is certainly not a priority in this part of the world.

An international vendor, in the last few weeks, redid their website and moved to a responsive web design. Though not stated, the mood inside the company had to have been one of, "Holy cow! This responsive design stuff we've been selling, really does make a difference," as they watched the wholesale shift in mobile users, rising 30 per cent in site visits, and more or less tripling mobile user engagement times. Requests for information rose fourfold.

The industry is shifting from the general digital-first to the now more specific mobile-first.

The more sophisticated plays are aimed at getting placement on very hot mobile apps. The BBC may be the leader in this getting their news feed into Whatsapp, with 800 million users worldwide, and similar high-volume apps to bring users back to the UK national broadcaster.

In the US, the digital numbers at the large players - and even some of the smaller ones which are taking this seriously - are becoming encouraging, and perhaps even viable. A large, publicly-traded newspaper chain has told me that digital accounts for 25 per cent of their revenue. The digital sales team there is large, well-funded, very high tech and seems to operate with the high energy enthusiasm of a good boiler room using pinpoint metrics.

In my direct dealing with newspaper chains, the very hierarchical chains continue to centralise everything they can, and in the case of digital sales this allows them to concentrate enough resources to hit some sort of critical mass that is pushing them past the 20 per cent of revenue. One Texas chain that ran the numbers realised that they are very close to being able to completely turn off print. This realisation brought them up hard and fast against the definition of their mission: turning off print would leave a significant percentage of their community without easy access to local news. Unspoken, but very real, it would also drop their workforce by more than half, significantly impacting community employment as well.

In fall 2013, I was engaged to do a study on newspaper spending in the coming three years (2014-16). Half of the respondents predicted they would increase spending in 2014 and 2015. The caveat was that the reason for acquiring a new system would be increased functionality. ''Increased functionality'' was given 2:1 over any other reason.

As any vendor in North America can tell you, 2014 was the worst year for software sales, perhaps, since the 1990s. 2015, in North America, has started off as a fantastic year in terms of RFPs received, demos performed and purchases promised. It is June; in terms of orders taken the year looks remarkably like 2014.

New functionality, the hands down reason for making a new system purchase echoes resoundingly.

There are certainly places for new functionality and they all revolve around digital and mobile. Systems with brand-new functionality for digital ad booking and programme buying should be run away best sellers. Editorial CMSs that truly support mobile-first should sell very well.

However, in the US, the buying cycle has changed. "We'll spend what we need to spend," is the most common answer to the question "what is your budget?" Making it difficult for a vendor to propose a system that matches the buyer's pocketbook. By having no budget, there is no rush to buy. The money has neither been given, nor will it be taken away if no purchases made by the end of the fiscal year.

By number, family-owned chains are the clear majority of companies engaged in a system search. Publicly-owned chains are far fewer, but each chain in terms of dollar volume dwarfs the total aggregate of the family chains. So far, most prospects have decided to stay with the entrenched vendor, or do nothing at all, which is normal. There have been few if any announcements of new system purchases in the trade journals.

In the same study from 2013, a decided majority of the respondents indicated that newspaper industry experience was considered a liability, and that the respondents would be looking for vendors from outside the industry. So far, the pure play vendors have not taken any major sale that would have gone to a traditional vendor. Instead companies like Cxense and Janrain augment the traditional vendors' offerings by allowing newspapers to increase the profitability of our readers to us, by allowing us to supply stories they want to read and advertisements for products they want to buy.

One might say the American industry is in the doldrums. Nothing seems to be happening. One might also say, we've entered a period of normalcy. Successful chains are buying poorly managed titles. Successful titles are growing their revenue.

Summer is coming to Seattle, where I live. The days are long, the skies are clear and the temperatures reach into the middle 20s. If you moved to Seattle last November and lived through six months of grey skies and rain, our coming summer would seem dramatic and unexpected. But it is normal.

In the States at least, newspapers are at work serving their customers and their advertisers using the tools and business models that work for them. They're buying new systems when it makes sense and when they have the money. From a vendor's point of view, newspapers don't move fast enough, the selection process seems opaque and driven by forces that are not always apparent. And this is also normal.

• Newspaper systems industry veteran John Juliano writes regularly for GXpress Magazine. He is North American vice president of business development at Miles 33. Contact him at john@jjcs.com

Sections: Columns & opinion

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