“Technology Diminishes Journalists’ Value”Judging from their widespread adoption, it’s hard to find a technology that news organizations don’t embrace. Read the Los Angeles Times on Kindle. Watch ABC News on YouTube. Leave a comment on a blog about media and marketing from the Chicago Sun-Times. Listen to a podcast of “On Science” from National Public Radio. Participate in a discussion board hosted by The Washington Post about college admissions. Receive SMS news about the Dallas Cowboys from The Dallas Morning News. Get features from Time on a PDA and tweets of breaking news from CNN.
The mantra for news organizations is to be anywhere, anytime, on any platform. But is this strategy really a good idea? In an era when the business models for news are stressed, hard thinking should be done in assessing the opportunities that various technologies present. It isn’t the time merely to be copying what others are doing.
Tough questions must be asked to figure out which of the new technologies is beneficial for journalism and the business of journalism. Is each one equally useful? What are the real costs in staff time and the operating costs to be on the various platforms? What is actually achieved for the news organization in being there? Does every news organization need to be active on all of the platforms? Finally, how can a news organization achieve optimal benefit across platforms?
The answers we find might lead to deciding which of these technologies to employ. Most importantly, the decisions reached will vary for different news enterprises based on their circumstances and needs.
Determining Technology’s Value
In the Winter 2006 issue of Nieman Reports, Picard wrote an article entitled “Capital Crisis in the Profitable Newspaper Industry,” in which he observed that this crisis had arrived “at a time when the newspaper industry is struggling, too, to respond to changes in technologies, society and in how consumers use media.”News organizations are operating with constrained budgets in highly dynamic markets. Clear strategies must govern all uses of journalistic, financial and human resources allocated for these technologies. Merely because a technology is popular with some users and journalists does not mean that its use will be beneficial to the news enterprise as a whole.
Here’s a sensible first question to raise: How will the use of a given technology generate money?
And if its uses don’t generate money—or, at the very least, pay for their full costs—one needs to have an exceptionally clear answer as to why it is being used at all. Reasons can be found to use some without full cost recovery, but those should be based on strategic thinking and informed choice, not on technological hype and exuberance.
In the decade and a half since the Internet emerged as a viable medium, and the decade since mobile communications became practicable, questions of how content providers can effectively earn money from either have remained prominent. The lack of truly effective revenue models to support the gathering and distribution of news has led many to argue that providing this serves other purposes, especially in creating interactions that strengthen the brand and form and maintain relationships that bond users of various platforms to news organizations. If these are the primary benefits of contemporary technologies, news organizations must become much more sophisticated in their thinking about them and how to achieve those benefits.
Each platform requires clear and distinct strategies, as does the overall use of multiple platforms. If interactions are the goal, the reason for each interaction needs to be clearly delineated. And what should it accomplish? What messages and images should it project of the news organization? How are the benefits of those interactions to be measured?
Even if the value turns out not to be measured in financial terms, clear goals ought to be set forth in terms of return on the investment—such as the effect on brand equity, number of unique users served, and the movement of nonusers to paid products. These goals should be articulated and pursued, and performance in reaching them measured. When forming stronger relationships is the goal, clear strategies need to be stated. How personalizing communications across platforms will happen also needs to be considered.
Methods for measuring and evaluating performance have to be developed. These should be used to track the effectiveness of any of these new approaches to determine whether the money spent and other resources used were warranted and whether the technology was effectively used. What are the effects on the print product? With online content? With the news organization, as a whole? Have existing products been supported or harmed? Have beneficial business opportunities emerged?
Such managerial challenges posed by these technologies should not deter their use. There are, of course, risks also associated with a decision not to engage in some or all of these technologies. This is the time for neither inertia nor indecisiveness when it comes to making such decisions.
The factors shown in this diagram have important business implications. For a news organization to earn money from using these social media tools, the activities related to the high involvement with extended contact (visible in the lower right) are more likely to generate greater payments from audiences and advertisers than those in other quadrants. They also affect the extent to which relationship development and branding benefits can be obtained. Relationships are established and maintained best through highly involved personal interactions (upper-right quadrant). Some branding benefits occur through ubiquitous contacts of all kinds, but the most beneficial ones are obtained through regular contact that tends to result from uses in the quadrants on the right. Image and text by Robert Picard.
Understanding the Benefits
Clearly, there is benefit to a news organization in interactive communication with users. By using online tools, journalists get information, ideas and feedback. And if they do interact consistently with readers and viewers, they develop a different type of relationship than the arms-length connection that traditional mass communication created.
For users, social media and blogs offer anyone the opportunity to express themselves and to connect with persons of like mind or interests. These digital tools provide an easy (little to no cost) way for members of the public to take part in discussion with larger groups of people and draw attention to issues and topics that traditional news media might have overlooked.
For news organizations, however, this is a two-edged sword. In many instances, the content that news organizations produce (at a cost) is distributed by others, thus removing the need or desire for many people to seek out the original sources of the information. This circumstance, of course, threatens the commercial model because of its deleterious effects on revenue and cost recovery.
Millions of people use new technologies, yet in this time of exploration and experimentation, the users of these digital tools react to them in different ways. Some find them highly useful and satisfying; others find them worthless and disappointing. Some find them a worthy pastime; others conclude they are a waste of time. They are more important to some people than to others. Not everyone wants to be or will be equally wired, communicating, or sharing their opinions and the details of their lives. Some persons find the communications technologies more rewarding in business; others emphasize personal benefits. Consequently, many of these technologies serve only a fraction of the entire digital audience, in most cases from five to 20 percent. This, too, must be factored in as media enterprises realistically assess the potential of the opportunities they seek to create.
The ability to create relationships with and among users is among the widely touted benefits of social media tools. Even so, achieving this goal has yet to be shown to be very effective at maintaining or producing better overall use of the news products, which is the primary revenue source for news enterprises. In short, relationships don’t necessarily translate into greater economic value.
Understanding the function and use of social media is critical in making business decisions. In general, the functions range from information provision to personal interaction and, when they are used, the result can be low involvement and fleeting contact or high involvement, which can lead to extended contact. [See diagram above.]
It is still early when it comes to the use of these technologies by news organizations. Already, however, we can find some indications of the effectiveness of these interactive, social and instant messaging technologies.
They tend to be more beneficial for national and large metropolitan news organizations than they are for smaller local ones. This is because they offer the competitive advantages of making the brand omnipresent in the face of the myriad of competing alternative sources of news and information.
When their use is more targeted on building effective personal relationships with readers, listeners and viewers, they appear to be more useful for smaller local news organizations. There, the contacts can be more individual and intimate, and the volume of contact is generally not as overwhelming as for large organizations.
There is a clear and growing body of evidence that news organizations’ Web sites produce some benefits from various activities. Less evidence has been found to show that social media activities do likewise, especially for newspapers. It is perhaps too early to judge given that experimentation with social media is in its infancy. It behooves all of us, however, to carefully observe and evaluate their development and effects. Then, we need to use what is learned to gauge whether and how a particular tool provides real benefit to a news organization or if it is depleting resources—financial and human—that could be used more effectively in other ways.
Robert G. Picard is a fellow at the Reuters Institute for the Study of Journalism at the University of Oxford. He is editor of the Journal of Media Business Studies and author of 23 books on media economics and management topics. His blog can be found at www.themediabusiness.blogspot.com.