“No matter what you think, your publication is not your product.”
(An introduction to journalism that even the owners can understand – I hope.)
The previous blog postings attempted to explain why it’s bad journalism to insinuate, insert, or overlay anything having to do with advertising into or onto the editorial content. I’d like to think reporters readily understood my point.
I’m less optimistic when it comes to the business side of the industry. So I will attempt to write this so even the media owners – whether you are in newspapers or magazines – can understand.
Without a doubt, journalism is a very difficult business in many ways. It has always been. It is not a straight-line business. It is not an industry that makes things. From a business standpoint, it is an industry that acts as a conduit through which messages are sent. It provides a means, not an end. The classic revenue model, built on advertising sales, is a type of cobranded relationship, symbiotic in needs and interdependent for success.
But mostly, it is a business that incorporates a near-classic principal-agent relationship. That is what makes it, not just more difficult than a simple manufacturing company, but also more delicately complex. Because you don’t just join your brands, your messages are conjoined though the typical conflicts remain.
The industry’s most crucial misconception here is it seems to think its publication is its product, with its content, its stories, its photos. Because, I suppose, it’s what you sell to the public, so you think it is your product. Let me suggest this shows a fundamental lack of understanding.
Ultimately, your publication – your content – is not your product. It’s your asset. Intangible, yes (think goodwill on your balance sheet). Or more tangibly, like a house, or even better, a museum. (What is your product? We’ll get there in a minute.)
Your publication contains the valuable content that you pay to accrue, compile, collect. And like a museum, your content must be worth viewing. It must be interesting enough for people to take time out of their day and to take a look at what you’re offering (whether you charge for it or not). Yes, to your reader, it’s your product. But from your standpoint, it is not.
Now, for consumers to bother and to read you frequently enough that it becomes a habit, you must give people content they expect – even if they expect to find the unexpected. You must give them a reason to take a chance on your publication and to read it every day or every month as it’s issued. You can give them entertainment, gossip, sex, fashion, literature, satire, or plain old news. It does not matter. But whatever the content, it must be what they want.
That’s not easy to do. And unfortunately for you, your business then gets even harder. Because if the business stopped there, then it would be like selling chocolate chip cookies or a new pair of shoes – you would just package it up, sell it for a price, and walk away with a profit.
But that’s not how your industry works, because selling the content is not where the important revenue comes from. For that, you need advertisers. And to them, your content is never your product. To them, your product is distribution. I don’t mean kiosks and trucks or even the post office. Those are merely what you use as outsourced providers – like paperboys on bicycles when I was a kid.
No, you are paid for distribution, no matter how you do it, no matter what your publication.
Now this is really where it starts to get messy. Because as distributor, you act as the advertisers’ agent. You bring readers their message, the one for which the advertisers pay.
But as in all principal-agent relationships, the risks for either party always is great and the conflicts that arise will always be many. From a purely financial standpoint, your business exists for the benefit of your clients. You succeed by representing them and conducting a business that you can sell to the public. In this limited way, it is no different than any company.
In this case, however, your principals are not the owners, but the advertisers you work for. They do not pay you to generate dividends, but instead they pay you to create something that has reputation and brand value. Then you lend that to them so they might benefit from you and convince your fine readers to come shop at their stores.
So like any agent anywhere, you are paid to be in-between the principal and the customer. In that sense, you are not in business for yourself. You merely act as a messenger carrying their message inside of your message that you sell to the public.
Once again, as we see with any principal-agent, (though they have very different roles) to an outside observer their qualities combine. In other words, the reputation of one will affect the fortunes of the other.
You can see this almost anywhere. For example, at the papers I’ve worked with, we always had a challenge. Of course, we wanted to get the revenue from any advertisement. But we knew by accepting certain ads, we were suggesting we endorsed them, that they met our high standards.
What happens then when the pills that are sold in the ads on our pages didn’t do what they promised? The readers called us. They blamed us for this fact. They held us responsible for wasting their money. Because weren’t we, in some way, by agreeing to publish the ads, tacitly lending our reputation to the product – a reputation we had spent decades struggling to build, and a reputation our readers thankfully trusted?
Or consider an example that’s even more obvious. Should a family newspaper, one that publishes school menus and community church announcements, also publish ads in the back for escorts and massage parlors? You begin quickly to see how the public mixes the principals and agents into one.
And you don’t need to look far to see it right here. Why do some of the biggest publications here have such a hard time attracting ads? Because their content and their image do not match the message that many potential advertisers want to send.
Because as we all know, sometimes the messenger is the message. So you must be careful whom you send. If I don’t trust the messenger, I will never trust the message.
Now if you know anything about principal-agent relationships, then you also know there always will be conflicts. The two are too intertwined, they are interdependent, yet they each have their own goals that do not always coincide.
The principals always want to be in control. After all, they are paying the money. But they also know they are not equipped to run the business (otherwise, they would) so they must hire the agents and rely on their skills. Ironically, the principals are also paying to keep themselves in check because they know there’s much they don’t know and, even when they demand, they must not be allowed to ruin the business.
The agents, of course, know of the principals’ ignorance so they feel relatively free to do their business how they want – as long as, that is, the principals believe they’re getting what they want, i.e., their message effectively delivered.
Then again, the principals also know their own inferior position. So you see, the trust between the two partners is never very strong. It is a natural antagonism between editorial and advertisers.
All of this typically works and stays in some sort of balance of mutual dependence as long as the two sides recognize they must have each other. But then came the recession. (Or keep calling it “The Crisis” – it’ll help sell more papers.)
Yes, it used to be easier. Newspapers essentially had a monopoly on distribution, the kind that could guarantee daily delivery into the hands of the public. And the paper’s real estate inside its pages was limited, so in the best of times, ads had to compete to get in.
Then the internet came along and suddenly real estate became infinite. Distribution exploded. Your product was everywhere. Publications were no longer the only messenger out there. In fact, no matter where you looked, there was somebody else who would do it for free.
With the monopoly gone, the brand value of publications became that much more vital. The product (distribution) was everywhere. It now was only the asset that mattered. Only by strengthening its power and ensuring its quality could publications hope to compete, whether in print or online.
In Romania, of course, the timings were different. The rise of the internet and the creation of newspapers and other publications coincided more closely. The introduction of the internet was not the sudden disruptive force it was elsewhere.
No, for that you waited for the recession. Then what did you do? You cheapened your asset – the only thing you had left. It was the only way you thought to compete and you started selling it off, like burning your blankets hoping to stay warm. The fact is the only leverage you had left (while you tried to survive) was to prove you could either attract the most readers or the readers who were better for the products your advertisers sold.
Of course, the great irony was – and continues to be – that rather than ensure you were the best, and in that way succeed, you lost sight of yourself and began to pervert who you were or at least who you needed to be. And by the time you were done (though you continue to find new ways to do it) you ended up where you are, which is apparently not knowing what business you’re in.
So let’s go back to the analogy of your publication as a house or museum. The public liked going there. The collection you built tried to educate, entertain, and even sometimes surprise. Maybe you charged admission, maybe you didn’t. And advertisers paid you so the public would know they were associated with you.
Until suddenly, one day, you discover you need to make more money. Then you begin selling things off. You strip down the exhibits until nothing valuable is left. The few employees who remain – the ones you depend on (remember?) to build up your asset – you treat with contempt. And the quality of your asset quickly drops down to nothing.
Then you ignore what you are, and you beg advertisers to come, offering control of your displays, and they substitute your relics with whatever they want. You no longer look to curators to choose the best objects. You look to your advertisers (or their minions at the agencies) to tell you what to show.
The reality is, of course, when the public stops coming, your advertisers will, too. They don’t want to be part of a contaminated asset even if they were the reason it came to be contaminated.
Again, it was your job to say “no.” Remember, you are the agent: you’re paid to say “no” and to protect the principals from their misguided selves. No advertiser wants to listen to you explain how your publication collapsed because you did things for them – that you just followed their orders. Yes, they’ll reply, but we paid you to know better.
So if you think charging money merely to place the ideas of others in your publication (as if that was journalism) will save you, you are wrong. Cheapening your publication to try to make a bigger profit is not the path to success, or even survival.
Finally, just in case, let’s try one more analogy: Imagine your favorite restaurant wants to make a bit more money. So it starts buying lower-quality meats and substituting old vegetables. Just a bit here and there, not enough (it believes) for customers to notice. Well, it might work for a while, the profits might rise. But customers will taste it and eventually leave.
For the most part, customers don’t even know why they stopped when they abandon a product. I’ve been in too many focus groups trying to “fix” publications. Customers (i.e., the readers) didn’t know how to fix them. They couldn’t tell you what was wrong. They couldn’t see what was missing. Sure, if something was there, they could tell you what they liked (unless they were lying to sound smart). And they always wanted more of whatever that was.
But they didn’t really know, with any kind of specificity, why they stopped buying whatever publication it was. It all just came down to the fact they didn’t need it anymore. It was as simple as that. And then they discovered they didn’t miss it. They had tired of it completely.
So you can continue to cheapen your asset, thinking it’s your product, and hoping in the end that no one will notice. You might even convince yourself you’re still a quality publication. But the fact is you’re not. And though you might fool yourself, you won’t fool your readers while they keep walking away.
“A Line That Moves Is No Line At All”