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Archive for the ‘Web’ Category

Combined Staffs, or Separate?

Wednesday, March 13th, 2013

The CEO of a newspaper chain recently asked my thoughts on separate staffs to manage digital ventures, and whether his publishers could effectively manage those digital staffs.  It was the second such query I’d received in the past week.  My response below applies to any type of  traditional media company, and I thought it would be helpful to share.

Dear CEO,

Your publishers are dumb as punk and will never “get” all this digital stuff.

OK, now that I have your attention….. I lied.  Your publishers are smart — really smart.  I’ve met them, and I can tell.   They’re so smart, in fact, that they are likely to go out of their way to knock the ball out of the park in print sales while using their heads to score a goal off a corner kick in digital sales.

I didn’t mix metaphors on accident. How common is it for an athlete to be at the top of his or her class in one pro sport, and also in another? Never happens, right?  They might be pretty good, but never great in both.  That’s the situation facing publishers across the country, and the reason we haven’t seen fantastic, much-needed print innovations over the past six or seven years. We’ve drawn our print managers too far into figuring out how to conquer the digital space to the detriment of the product that generates more than 90% of our revenue.  Crazy.

Remember “The Innovator’s Dilemma” by Clayton Christensen?  He took great care in saying that he studied the failure of “great firms” — not weak or mediocre ones — when it came to seizing a competitive opportunity.  In every case, smart managers were unable to embrace two competing opportunities without screwing up one of them — or both.  It just can’t be done.

If you want your company to succeed in the digital arena, your traditional-media managers need to reach a critical point in their minds.  It’s the point when they arrive at the realization that they might be more of an impediment to the discussion than an asset.   The result is a shift in thinking from, “We need to move this effort forward, faster,” to, “We need someone to lead us.”  It is at that moment when they realize that their chief role is one of support, not leadership or control.  Have you hired great people to lead you in digital?  Many newspaper, TV or radio companies have, but have mitigated that great leadership by putting those people under newspaper, TV or radio management.   Hence, your “leaders” are actually the publishers or GMs, not the leaders you thought you hired.

Here’s the way I see things forming at successful “media” companies that happen to own newspapers:

1. The publishers report to the CEO.  They are in charge of the newspaper, its website and related sales.  EVERYTHING they do digitally is supportive of print goals; nothing strays from that mission.

2. The digital managers report to the CEO.  They are in charge of the digital product set.  They are charged principally with building a new business.

3. One doesn’t report to the other, but #2 usually takes on #1 as a client.

One more thing.  Anyone who works for #1 and shows up to work with purple hair or lip rings should be immediately transferred to #2.

 

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YP Morphs into a Digital Media Alligator

Monday, January 28th, 2013

It seems odd, but if you want a shining example of successful local media transformation, look to a yellow pages company.

One by one, the stodgy old directory companies are disappearing.  Gone are AT&T Yellow Pages, White Directories, Yellowbook, Verizon Superpages, and Donnelly Directories. Replacing them are leaner, digitally focused companies renamed YP, LocalEdge, Hibu and Supermedia.  While other local media companies struggle to get more than 10% of their local ad revenue from digital sales, these companies are above 30%.  LocalEdge (formerly White Directories, owned by Hearst) is above 50%.

YP, formerly AT&T Yellow Pages, stands head and shoulders above the rest. In an age when fallout from the digital comet is suffocating the biggest media reptiles, YP has morphed into an alligator.

David Krantz

(CEO David Krantz will detail YP’s transformation at the 2013 Local Online Advertising Conference in NY March 4-5. Click to see Agenda.)

YP initially struggled with the Albatross of an old print-based business model and a profit margin to protect.  It’s the same dilemma faced by newspapers, TV, radio and direct mail companies. When they are forced to protect profit margins and are lulled into thinking their existing business managers can manage both analog and digital ventures, they falter. They don’t morph. They mediocritize.

A year ago YP transformed from two separate companies – AT&T Interactive (the digital side, operating Yellowpages.com) and AT&T Advertising Solutions (the print side, operating hundreds of directories) – into one.  Today, YP is one the largest local advertising companies in the U.S. with $3 billion in ad revenue – bigger than all of Gannett’s newspaper operations.  Roughly $1 billion of it comes from digital products, making YP the second-largest locally based online advertising company, just behind Autotrader.com.  (Read about Autotrader’s next disruptive plan here.)

At the helm is David Krantz, perhaps the most digitally savvy CEO in the local media business.  In 2012 he helped guide the newly formed company, owned by AT&T and a new investor, Cerberus, to a critical decision: Don’t focus on profits; focus on the longer term.  “Our goal,” he told me recently, “was not to harvest out the cash.  There are a lot of easier ways to earn a 15-20% return on your money.  This is a transformation play.”

How is YP making the transformation from a print company, to print+digital, to an integrated company?  One of the key ingredients is a new set of people who aren’t indoctrinated by the old business model. “We’ve been able to attract really great people,” David said, “because they’re excited about the transformation and the vision.”

Krantz said people want to believe they’re working toward something meaningful.  Something noble.   YP’s vision is simple and brilliant:  “We want to help local businesses and communities grow,” Krantz said. So there you have it.  YP is helping communities.  They’re not intent on being the No. 1 news and information source, or the most-trusted source of news.  They aim to help local SMBs and communities grow.

It’s a fascinating story – so fascinating that I’ve asked Krantz to outline that transformation, and how it’s folding out at YP, during our 2013 Local Online Advertising Conference in March.  Click here to see the agenda.  This year’s theme is “Meet Your Disruptors.”  Had they followed a different path, the AT&T Yellow Pages folks would be sitting in the audience, learning how they’re being disrupted.  Instead, they’ll be on stage as YP, the disruptor.

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The More Things Change…

Friday, February 17th, 2012

We’re going to talk about what’s coming – about the future. But to do so, we first have to go back to the past – 30 years back, to be exact. In 1981 Adam Osborne had just unveiled his Osborne 1 computer, the first portable (or laptop) to hit the small but growing PC market. The Osborne computer was indeed portable, but just barely so. Even a strong young man had trouble carrying one more than a few blocks. But this early computer made history in another way.

Back then, the general assumption was that anybody who wanted to use a personal computer would have to know how to program. Osborne aggressively challenged that premise, and predicted that in the future less than one in ten PC users would be programmers. His statement caused furious debate at the time, but these days it’s just limpid fact. Most people happily surf the Web, check their e-mail, compose text, construct spreadsheets, play games, and do a thousand other things – all without writing a single line of code themselves.

Cycle forward to today … and tomorrow. Both Apple and Microsoft have announced big changes to their next operating system releases. The announced changes will make both feel more like tablets than desktops. Both will offer access to apps, those nifty micro-programs that are so much fun to use, so easy to get, and so cheap that nobody minds dumping those no longer useful or used.

Here’s a prediction: by 2016, most computers available to consumers are going to look and act just like today’s iPhones and iPads. That is, they will be able to communicate like cell phones, they will all have built-in GPS, and they will feature cameras and touch-screen interfaces. Most importantly, they will depend on apps instead of expensive, pre-loaded software for the functionality users will want. In fact, what we now call computers will have largely faded from the scene – except for some business and gaming applications. Personal computers will be replaced by mobile devices of one sort or another.

I don’t expect the kind of pushback Adam Osborne got for his prediction. For one thing, what I’ve described is already beginning to take place. Tablets and smart phones are replacing desktop computers and laptops in many homes and businesses. The app business is thriving, with hundreds added to “app store” inventories every month. All indicators point to a post-computer future. Your children’s kids will wonder what a computer desk was for.

The cloud will grow in importance to this new digital world, and that’s another replay of history. Back in the ‘60’s and ‘70’s, we used to call it time-sharing, and it allowed us to search enormous databases without taxing the capabilities of our small computers and dumb terminals. We relied instead on renting computing power from the water-cooled giants of IBM and other industrial firms. Ever wonder why some of the older business parks have big, glassy areas in the fronts of many buildings? They were put there when those buildings were constructed, to show off the resident firm’s computer. It typically filled the room and was a point of great corporate pride. The techs who worked in these glass-fronted rooms often wore white lab coats and gloves.

All that said, some things won’t change – at least not much. The Web will still function much as it does now, as time goes by perhaps more as a foundation for social sites than as an entity of its own. There will probably still be websites for some time to come, although some businesses already question the need for them, choosing to go straight to social sites instead.

The world will change a lot during the next five years, at a faster pace than it ever has before. How much more change will there be by 2020? The short answer: a great deal. We’ll report it to you as soon as it becomes clear to us. After all, at Borrell that’s our job.

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