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FORCED MARCH 6: The Digital Disruption

By TONY FELICE/Senior Digital Strategist and WARREN EPSTEIN/Agency Voice

We know the story about newspapers. The “paper” portion is going away. Whether or not various newspaper brands will survive this “Forced March to Digital” remains unclear. But digital is clearly where the money is flowing.

ZenithOptimedia’s latest forecast suggests that Internet advertising spend will overtake the combined newspaper and magazine ad spend globally by 2015.

And it’s not just newspapers. We’re all flowing to a more digital landscape. It’s funny that a recent Forrester Research survey found that most people say their online usage is going down. But more digging discovered that when people in the survey checked their Facebook pages, made a move on Words with Friends, tweeted or read their RSS feeds, they didn’t necessarily think about that as being “online.”

The digital experience is becoming more a part of our everyday lives.

That digital emergence, so seamless in our daily lives, is wreaking havoc on the world economy, creating what’s been called “a disruption economy.” Newspapers are just one part of it. Just about every industry that creates content or provides a service has been touched and will continue to be disrupted.

Take a look at higher education. Coursera, with its free online courses, is making major inroads into the college market, and it has no need for bricks and mortar. Airbnb has created a similar disruption in the hotel industry. Its app allows owners of apartments, condos, houses and trailers to quickly reach short-term renters. It puts anybody with a spare room on near equal footing with a hotel. The taxi industry, meanwhile, is being disrupted by Uber, a car-scheduling service that attempts to work around the taxi monopolies.

One of the key components of their success is the explosion of social media. You may be uncomfortable about crashing in some stranger’s apartment, but if you know they’re connected to a Facebook friend, it makes all the difference.

The traditional institutions will try to fight back with regulations and new laws, but they’re destined to fail. The key to survival for newspapers, taxi services, hotels, the recording industry, broadcasting…is to stop fighting change and join the disruption.

In 1975, Theodore Levitt in the Harvard Business Review made a similar argument about the decline of railroads:

“The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because the need was filled by others (cars, trucks, airplanes, even telephones), but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business.”

Just going digital isn’t a solution, either. Just ask Rupert Murdoch, who recently shut down his one-year-old digital-only newspaper, The Daily, which, despite a 30% staff reduction couldn’t get close to sustainability.

The challenges faced by newspapers, as this series has explored in earlier installments, are daunting. For every dollar gained in digital, $7 is lost in print.

Many newspapers are struggling to join the disruption, keeping current websites with up-to-the-minute news, active blogs, engaged social media platforms. They’re crowdsourcing for their information.

But too often they apply print thinking to the digital spaces. It’s like the early Internet banner ads, simply print ads resized for a digital layout. So, we see tweets and Facebook posts that are simply print headlines repurposed, and online stories that are often longer than the stories in print, even though studies show readers want shorter stories.

Successful newspapers will be the ones stepping back from slipshod digital tactics to ask the larger questions.

What content do people want that we can be best positioned to deliver? One of the keys to understanding that question is to understand that it will have almost as many answers as there are people.

The mass market is dead. Even the niche markets are going away. I am a market of one. Brands don’t just want to reach people LIKE me anymore. They want to reach ME.

Look at the explosions of digital tracking and consumer behavioral research. Target stores may know your daughter is pregnant before you do.

Apply that same thinking to news, and what had been a newspaper can be something much more personal and exciting.

Imagine:

The Daily Bugle app has geo location, so it can tell me that I’m heading toward an accident backup on the interstate, and there’s a great old opera house to my left that is scheduled for demolition. “Say ‘YES’ to get more info on how you can do something about it.” Oh, and a jacket very similar to the one you were looking at on barneys.com is on sale at Kurtz’s, only two blocks away. There are two left in your size. Say “COUPON” and get a free tie with that.

When I log on to the new herald.com, the only news that comes up are things I’m fascinated about: digital innovations, the stock market, the Raiders and the latest sayings of Honey Boo Boo.

The key to these kinds of innovations isn’t about ones and zeros. It’s about creating solutions.

Maybe that solution is old-fashioned. It’s like Jeff Goldblum’s character said in “The Big Chill.” His stories for People magazine were designed to be read in the time it takes to take a dump. That’s a product serving a solution.

Unfortunately, if newspapers are to survive, publishers will have to do more than come up with solutions. In the new disruptive economy, the problems looking for solutions one week are different than those the next.

The challenge, then, is to live in that disruption. To live in the culture of transformation and innovation.

For an industry that has thrived on answers, newspapers must be ever vigilant about continually asking questions.


About the Series

The transformation of the newspaper industry not only affects readers and communities, it throws several wrenches into a tremendously successful advertising business model.

VJ has done extensive research and economic projections to examine where this is going. Our embedded philosophy – Truth Creates Opportunity™ – drove us to add some finer textures and clarity to issues that, for much of the industry, have remained vague, scary and undefined.

Exactly what does the evolving content infrastructure mean to agencies, their clients and consumers? We plan to spell that out in a series of white papers produced by our agency that will place these issues into meaningful and useful perspectives.

Read the whole series.


About Vladimir Jones

VJ is a full-service ad agency dedicated to one simple, powerful idea: Truth Creates Opportunity™. Good or bad, the truth of your brand is the truth of your customers and the culture in which they interact. To identify the truth takes insight, creativity, engagement, guts and metrics. Like all things worth finding, we pursue the truth with ravenous persistence. Once found, it is power. The power to connect. To influence. To inform. To humor. Incite. Engage. Convert. Like your mother always said, tell the truth and good things happen.

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