The findings of PRWeek's Agency Business Report and the slew of rationalizations of communications under the marketing function at companies including SAP, Visa, P&G, Virgin America, and Allstate are two reflections of a world fundamentally changing over the past 12 months.
The revolution was brought even more firmly into focus listening to Raju Narisetti, SVP and deputy head of strategy at the soon-to-be new News Corporation, speaking at the Foreign Press Association Scholarship Fund dinner last night in New York City.
He revealed that 42% of users only consume The Wall Street Journal on a phone or device measuring 3 inches by 7 inches or less. Astoundingly, this is up from just 18% at this time last year - 32% six months ago. For comparison, Mashable is at around 40% for mobile usage.
So, in the space of just 12 months, the number of people who solely access WSJ content via mobile devices has more than doubled. This has profound implications for media and communicators and is one of the drivers influencing the changes above.
Narisetti's new role is still to be rubber stamped by the SEC's approval of the split of News Corp., but he is already thinking about significant challenges ahead as he constructs strategy for a media company newly divorced from the proposed 21st Century Fox entertainment part of the business that has traditionally subsidized the less-well-performing publishing arm.
Having risen from being an intern at the Journal 23 years ago to his current elevated role, Narisetti outlined numerous challenges for the journalism business – and hopefully some rays of hope.
He said the view that young people don't read news is a myth. There have never been more people across the globe consuming news than there are today: the WSJ had 2.5 million print readers at its peak, it now has 55 million users. The Journal's competitor, The New York Times, has 44 million readers.
Someone else at the dinner described print newspapers as the “best way to catch up on yesterday's news,” which is an excellent definition. It is still the place to find context, analysis, opinion, and a deep dive into topics, as well as uncovering stuff you didn't even know you wanted to read. But it is no longer the place where news is broken.
Narisetti observed that news is becoming a commodity that anyone and everyone can copy or recycle within minutes, or even seconds, of the story. News has to go where the consumer is, not vice versa. “Google, Facebook, and Twitter are amazing platforms, but they don't produce a word of original content themselves,” he added.
Pay walls are here to stay, says Narisetti, pointing out that the Journal has been charging for its content for 16 years. Once The New York Times followed suit, over 1,000 papers also took the plunge. But he cautioned that fewer than 2% of the Times' monthly visitors are subscribers, so this is not a salvation for mainstream media – it is, rather, a welcome source of revenue distinct from advertising.
The problem for the Journal is that 50-60% of its revenues are still derived from print, with Narisetti estimating this number varies from 50-75% elsewhere. He still contends it is the cheapest way for advertisers to reach different people in multiple markets in one hit, but he is aware digital advertising is not a solution for the future.
There is an infinite amount of digital inventory and virtually no one clicks on ads, so their purpose is purely for branding. On mobile, literally no one clicks through. Video is a possible path out of this mess, as the advertising business model travels with it, even if the content is published on another platform such as YouTube.
But if news is now a commodity and users are increasingly fickle and promiscuous, Narisetti contended it is the packaging of great journalism that matters more. “Newsrooms must pivot from creating great content to creating great content experiences,” he said. When content is being neutralized because everyone has the same thing, packaging, presentation, and the user experience becomes much more important: but it is much more difficult.
How do you get journalists who view words and pics as “art” and the rest as “stuff” to work with tech teams who view code as “art” and everything else as “stuff”? So perhaps amazing content experiences such as the Times' Snow Fall multimedia piece are the way to go.
Most interestingly for the brand marketers and communicators in the room, Narisetti's final point was that the biggest challenge confronting editors and newsrooms is a new competitor: “Our advertisers.”
He reflected the growing trend toward brands and corporations becoming content producers in their own right by observing that “brands now want to tell their own stories and bring our [the Journal's] audiences to them” - they are not interested in media's content. “Advertisers no longer want to be advertisers: they want to be marketers of content,” explained Narisetti.
The walls between Church and State, heretofore inviolate, are crumbling. And this is causing significant stress in newsrooms that wonder how to balance helping brands get in front of their audiences without losing their reason for existence.
Unlike BuzzFeed or Mashable, Narisetti has a 100-year-old brand to protect and has to figure out how to create engaging products and experiences that users are willing to pay for. His was a profound analysis of the state of legacy media and the challenges it faces. However, I don't believe he has the answers yet to monetizing what News Corp. is doing.
Brands undoubtedly still value the high credibility of the platform offered by the likes of The Wall Street Journal and The New York Times – but they may also conclude that they do not owe them a living.