Terry Heaton posted a gem about how his sometimes-brutal advice for media can be perceived as “too critical”:
One of the first essays I wrote on this journey was called “Is TV News Giving Away the Future?” I published it in May of 2003 and got a lot of heat for criticism of third-party ad networks running TV station websites. When I look at the “false assumptions” published then, most are still in play today, and there’s even a new wrinkle in the concept: Most media company groups now function themselves as third-party ad networks, so a central thesis in my overall philosophy — that third-party ad networks work for the good of the network but not necessarily for the good of the properties on the network — has been ignored completely.
Heh. Terry, they may say you're too critical. We certainly do not agree on everything (disclosure: Heaton works for AR&D, which counts my company as a long-time client, so we've had our share of give-and-take). But I'd say the “too-critical” tag reflects an industry that has embraced too much political correctness about its current and future state. Sometimes street fights settle more than leather-chair exchanges of P.R.-speak. I'm certainly tired of companies trumpeting “slowing declines in advertising revenue” as if they'd found a cure for the common cold.
Heaton's post recounts his argument that “the flexibility for revenue growth is at the property (local) level.” It would seem to favor high local autonomy for interactive product roadmaps within media conglomerates.
I'm not sure I would say it's the flexibility as much as the touchpoint opportunities that matter locally.
Much of the flexibility to win at street level comes from focus, from strong signal with low noise. I believe that means using the power of a larger company to consolidate strategic, tactical and operational responsibilities for product lines where they have common threads across many local deployments. You know, economies of scale.
Let local teams adapt product lines to meet local needs, sure, but not just for the sake of being different. Oh, if only I had back every dollar the companies I have worked for have wasted the past 15 years allowing local Webmasters to write bespoke content systems, or commerce systems, or cute-baby-photo-rating systems, in miserably unsustainable isolation. And the multiples of those dollars spent to migrate, convert or wind down the inevitably disappointing results.
Meanwhile, the iPhone looks and works much the same everywhere it is sold (subject to quality of AT&T's service, natch). So does Microsoft Word. So does Google. Local variations in these technology products almost surely represent far less than 10 percent of the overall user experience. Last I heard, the companies that provide those products are doing OK in all our communities.
In short, the more efficiently a conglomerate uses its product resources, the more it can spare for customer relationships, those touchpoint opportunities.
Incumbent local media do have the advantage of local direct sales relationships, as Heaton and Gordon Borrell have discussed, but they are based on the shorthand dialects of legacy media advertising. The keepers of those relationships — sales account executives — often recoil from introducing new products, a new dialect, into them. That's human nature. The legacy products remain easier to sell to existing customers, at higher gross dollar amounts and much higher margins than anything the “interactive department” can show.
All stipulated. We're great at problem exposition, right? So what's the answer?
Where many observers might argue the incumbent media entities need to fire up R&D arms that invent new products in all the current and emerging interactive categories — and fast! — I have long maintained our industry will lose if its bias is to build solutions internally (and lose faster if every local property tries to build “the next Google”). Instead, I believe we need to adapt our business development practices to a world full of partnership opportunities.
If pure-plays can invent and deploy the right product to meet a given marketing need of small/medium businesses, why must we insist we could build a “me-too” product better, or blind ourselves to the threat entirely until another chunk of market share goes away?
Almost every company that represents the pure-play revenue in Borrell's data will, or would, entertain reseller partnerships with incumbent local media, as an alternative to building its own sales forces especially in markets smaller than the top 25. Incumbent media can resell best-of-breed interactive and mobile marketing solutions profitably. Plus, the incumbents do still have significant distribution clout via their legacy, offline operations, and will for many years to come.
The sum remains greater than the parts — as long as we don't stupidly expect things to stay that way without changing some of our behaviors.
If a local media operator can claim to sell products on par with best-of-breed marketing platforms, online and offline, then we shift the game back to differentiators that actually matter: our people, our relationships, our client service, our commitments to the communities in which we operate.
I wish I could say we have big leads in all those “human-touch” areas. We don't. Anyone who has ever tried to change frequency on a newspaper home delivery subscription, or called in to place a private-party classified ad, knows we do not exactly shine at customer service. But we have a more realistic chance of becoming the best on the human side once we equalize the technology race via partnerships. We have little or no chance if we choose to fight our battles on the technology front itself.