Message From Michael -- State of News Media - March 24, 2008

STATE OF THE NEWS MEDIA – A SPECIAL REPORT


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THE FACT THAT SAYS IT ALL: For the first time, the Project for Excellence in Journalism has included a special “state of advertising” report in its annual examination of the state of the news media. The crisis in journalism, according to this report, may be what it calls the “decoupling” of news and advertising. Even in its survey of journalists, included as part of the overall report, the study found that journalist are less concerned about credibility and public cynicism and more concerned about basic economic survival. Or as the report authors so succinctly put it, “the problems are about money.” In the special section on advertising, the authors make the point that it is less clear whether in this new digital/Internet world that advertisers even need news and entertainment media to act as a vehicle for their message as they explore multiple ways to reach the consumer.

SEARCHING FOR GODOT: And, along the way, the authors found John Wannamaker, the Philadelphia retailer famous for his quote: “Half of the money I spend on advertising is wasted; the trouble is, I don’t know which half.” The study authors say that maxim still remains true for most advertising in 2007. And when you consider some advertisers, like Proctor & Gamble, spend upwards of $6 Billion, that is a lot of money to waste. However, in the Online marketplace, the study says, search advertising is “the cleanest marketplace for buying and selling ad space” and as such is probably the closest advertisers will come to overcoming the maxim and the closest to, as the authors say, making Wannamaker happy. It is the ability to pinpoint their ads and measure their effectiveness through keyword use and click-through rates. (My advertising brethren reading this will be amused to know that nowhere could I find any reference to Search Engine Marketing or Search Engine Optimization in the report. Which may say something about news people’s understanding of advertising.) The report says digital technology brings the advertising industry closer to its Holy Grail of knowing whether and which ad expenditures are working.

It should be noted that the report still sees TV as the “most persuasive” of the advertising mediums, where, the report says, “mediocre commercial can still sell a lot of product” and as a result, old buying habits still prevail. Radio, according to the report, may be the “most enduring” form of news but radio itself may be an also-ran, in part because of its antiquated media measurement system. The report says the long-term numbers “give a sense that the end of newspapers as pre-packaged parcels delivered to our doorsteps may not be far off” as newspapers lead the way into the digital world. Magazines also have some of the print drawbacks, but with the report predicting that magazines will “live in a variety of media, with brands being the threat that pulls the different content platforms together.” It should also be noted that with Internet spending accounting for only $8.4 Billion of the $108 Billion in total ad spending during the first three quarters of 2007, its influence is greater than the actual dollars spent, and it is still true that the amount of money that goes to Online advertising in no way matches consumer consumption of the Online product.

The report also notes that while the number of people getting news online is growing, and news website have enjoyed double-digit growth, that growth is falling behind other areas, and most critically, is the fact that news has not made a mark in the most critical area – search.

TRUCKERS AND FISHERMEN: In the ‘good old days,’ says Charlie Rutman, CEO of North American operations at ad agency MPG, the agencies were basically in the trucking business, taking ads and commercials and simply delivering them. Or as MediaPost columnist Jack Feuer put it, in the old mass media world, everybody fished in the same three oceans (the broadcast networks) with nobody sure where the fish were or what they were biting. The difference between the fat fisherman and the starving fisherman was who had the shiniest lure – the best creative. According to the report, that is no longer so true. Now the emphasis is on what are called ‘media specialists,’ people who figure out the intricacies of what media, or combination of media, to buy, where to run the ad, how to place the ad. An example of this changing dynamic was given by Greg Smith, CEO of the digital arm of WPP Group’s Ogilvy Worldwide: in traditional media, five people might be responsible for spending $100 Million in the limited advertising universe of network and cable television; in digital media, those same five people might be responsible for a budget of only $1 Million, involving 1,000 ad placements, buying 5,000 keywords on search engines and tracking and changing the campaign based on the data that come back.

THE TWO SIDES OF THE JOURNALISTIC COIN: On the one hand, according to the survey of journalists conducted as part of the report, journalists are having to serve more masters, whether it’s a print and online product or an on-air and online product or a combination of all three. Actually most still work only or mostly on the original product, but with ‘national’ journalists more than three times as likely as local journalists to devote half or more of their time in the multimedia arena. On the other hand, the survey did not find evidence that journalists resent splitting their time, with half of those doing such work seeing it as a good thing. The study authors speculate that part of that may be the belief that the technology is putting journalists more in touch with their audiences. In 1999 when the survey was first conducted, more than half (57%) of national journalists surveyed agreed that journalists were out of touch with their audience. In the latest survey that number has dropped to dramatically less than half (41%), at least on a national level. The authors speculate that it is less true of local journalists who are more likely to be recognized, and hear from, their neighbors at their local supermarkets than their national counterparts.

Another example of two sides of the journalist coin comes in the differing perceptions of the Web’s value between print and broadcast journalists. Nearly three quarters (72%) of national TV and radio journalists say their leaders are doing a good or excellent job transitioning to the web while only a little more than half (59%) of national print journalists felt this way. Print journalists are also more skeptical about the impact of the Internet with both national journalists (44%) and local journalists (55%) believing it will weaken journalist values. In TV and radio, it was the other way around with the largest groups (49% of national journalists and 40% of local journalists) saying the Internet will strengthen journalism in the end.

PROCESSING VERSUS REPORTING: In what may be analogous to a two-headed coin, the study continues to document the growing trend of aggregating news, rather than gathering news. Fewer people are doing more and, the report says, the era of reporters operating in multimedia ‘has finally arrived.’ The report says news is evolving from being a product to being a service and the authors argue that “service, more than storytelling, may prove a key to unlocking new economics.” The report says the prospect of user-generated content being a core part of the next era of journalism is more limited than originally thought, although citizen input sites are still important sources for new ideas, sources and comments. Interestingly, the report says that such so-called ‘citizen journalist’ sites, rather than rejecting the ‘gatekeeper’ function of traditional journalism, appear to be just recreating it in other places and are often as closed, or more closed, to user-generated content than traditional news organizations.

There is hope for traditional media in the fact that many people will still go to Online sites of established, trusted brands for news. And despite all these new sources, he report says the agenda of the American news media continues to narrow, instead of broadening. And many times, what the mainstream media consider to be important and newsworthy differs markedly from what the general public considers important. That issue is further heightened by the fact that the media also showed a marked ‘short attention span,’ says the report.

KEYWORDS: In keeping with the message of the State of the News Media report, if I were to adopt the digital savvy approach of identifying keywords in a document, I would probably pick the following three: Scattered. Fragmented. Splintering. I probably wouldn’t buy those keywords for search purposes though because they wouldn’t necessarily connect to my targeted audience.

DISCLAIMER: This summary is only 16-hundred words long, for a document that runs to 180,000 words. So there are some inevitable omissions and even possibly some distortions, though I hope not. In any case this is only a preliminary summary. There is more to come. And you never know, maybe some smart consulting group, university or think-tank will host an open forum discussion of the implications of the report.

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