Pubs: Papers Need Entrepreneurial Space
DENVER -- Newspaper publishers charting their long term future need to leave themselves more entrepreneurial breathing room, even for models that disrupt their own business lines.
That was the thinking from three of the industry's leading publishers at the Newspaper Association of America's mediaXchange conference here on Tuesday as they ventured a look ahead at their industry on the fronts of programmatic buying, ownership trends and their ongoing competition with digital pureplays.
Larry Kramer, president and publisher of USA Today, stressed the importance of creating a walled entrepreneurial group or projects within the company with the space and funding to experiment. He says the leadership at Gannett Co., which owns the paper, understands that it needs to take risks to avoid another grand-scale disruption on the order of Craigslist.
Robert Dickey, president of Gannett's U.S. Community Publishing Division, says Gannett has made funding commitments that won't waver based on quarterly reports. "Our employees now believe that we really are entrepreneurial," Dickey says.
Which isn't to say they aren't going about it responsibly, Kramer adds. "You still have to use the same value system" in pursuing projects, he says, accepting less profit in one area to fund experimentation.
"We have to be willing to take risks, testing in various markets," Dickey says, noting that Gannett has 80 from which to choose.
Michael Klingensmith, publisher and CEO of the Star Tribune in Minneapolis, says that in contrast, "just being a single operation" has helped his paper on the experimentation front.
Having a single paper has made the company more nimble and able to try new things, he says, adding that he has brought in staffers from outside the industry to help broaden perspective.
Coming from a 30-plus-year career in magazine publishing at Time Inc., Klingensmith says he also brought his own tricks from the magazine industry that have buoyed the paper. The most important was immediately putting a pay meter in place, but he says the company also spent a lot more money on direct response and general marketing to help to sell subscriptions.
"We put much more focus back in the quality of our print product," Klingensmith says, including adding more pages and new sections to reaffirm its value position and strong brand standing with readers. The Star Tribune has also kept its staffing levels, unlike other papers beset with layoffs.
Dickey says that taking another look at print and its ongoing value for advertisers is a major initiative at Gannett. "We're not pricing to our advantage," he says, noting that the company is looking at a much better ROI on CPM advertising on a print basis going forward.
"We're missing out if we don't take advantage of the large audience that print still brings," Dickey says. Kramer notes that celebrities often go cold on doing interviews with USA Today if they aren't assured that the story will carry in print.
Another area where Klingensmith sees strong potential is programmatic buying, where he says his company has seen "tremendous success" because of a clever digital staff. That staff has used data to increase CPMs from the low dollar amounts to the $5-$6 range, he says.
"It has had a material effect on our overall revenue stream," he says.
Asked by Katharine Weymouth, publisher and CEO of The Washington Post, about the emerging ownership trend among wealthy entrepreneurs such as Jeff Bezos, Pierre Omidyar and Warren Buffett in the media industry, the publishers generally saw it as good for business.
"It's a very positive sign for the newspaper industry that quite a variety of people are interested in ownership," Klingensmith says. "It's great to have those fresh faces."
As to the industry's ongoing pressure from digital pureplays, as well as more ideologically-driven media, he says publishers need to hold the line on integrity in their voice and products. "It's not in our best financial interest to move past a line that you have to use judgement about," Klingensmith says.
But that isn't to say that papers can't start getting more expansive in their use of voice and reportorial style, where Kramer and Dickey say they are allowing more latitude.
As they looked forward, the publishers also took a step back when asked what advice they would've offered to their predecessors in the industry 15 years ago.
"At the time when we had the cash flow, we should have been much more aggressive about a product development mentality around digital," Dickey says, noting he would've begged for more collaboration across the industry.
"If you look at what we're competing against, had the industry gotten together those ideas should've been ours," he says.