May 4, 2016
During a conversation yesterday at DLD (Digital-Life-Design) NYC, Bloomberg Media CEO Justin B. Smith told interviewer James Bennet that media companies need to embrace radical change to succeed today. That’s something the pair have lived: Smith, before coming to Bloomberg, led a celebrated turnaround as president of Atlantic Media alongside Bennet, who was The Atlantic’s editor-in-chief until last month (he began a new job as editorial page editor for the New York Times this week).
The need for change is more urgent than ever in today’s landscape, according to Smith, with media companies under increasing pressures as traditional revenue streams decline, new revenue streams become fragmented and distributed content models gain dominance. By embracing content distribution on platforms like Facebook or Twitter that aggregate news for consumers, Smith said, “many publishers are effectively outsourcing their audience development, their monetization, their audience growth, their data, their advertiser relationships. My question is, how does this work out from a business perspective? What is the enduring model?”
“My question is: how does this work out from a business perspective? What is the enduring model?” – Justin B. Smith, Bloomberg Media CEO
While some few may be able to build the scale required to generate revenue streams based on volume of consumers rather than premium prices, Smith pointed out, most will not. Publishers in the general interest and entertainment news space are especially at risk of becoming absorbed into a newsfeed controlled by a third-party platform, Smith said, as Silicon Valley continues to beat traditional media companies in creating better mobile experiences for consumers and advertisers.
To balance out that equation, publishers need to fundamentally rethink how they operate: “Stop thinking of yourself as a mass scale play, and start serving smaller niches,” Smith advised. Seek out information areas – for example, as Bloomberg does with business and finance – where there isn’t a platform that’s retrained consumers to find aggregated content the way Facebook has for general interest information. Publications distinguished by exceptional quality, standards and depth will have the advantage.
“The type of segment you approach with your journalism is going to have a huge impact on how much of a direct relationship you can maintain with your customers.” – Justin B. Smith, Bloomberg Media CEO
But that’s just a start. Media companies also need to commit investment, resources and innovation into reclaiming the primary relationship with their audiences, on both the editorial and the business side of the brand. “The type of journalism you do, the type of segment you approach with your journalism, is going to have a huge impact on how much of a direct a relationship you can maintain with your customers. In addition to building your brand on the platforms – it’s not a zero sum game – begin really investing in direct relationships with your audiences,” Smith said.
Owning that relationship is critical to media brands because “you’re not then outsourcing your core business functions,” Smith noted. “You’ve captured as much first party data as possible, you have deeper insights into what your customers are doing both on and off your platforms. You’re managing your own monetization relationships and using that data both for your advertisers and for your editorial product.”
Bloomberg has been fortunate to be in a position to put that into practice, by virtue of its focus on business and finance together with a unique position as one of a very few truly multi-platform media companies with global scale. And growth has followed.
“The most dangerous thing in managing change is incremental change. Radical change is a better bet.” – Justin B. Smith, Bloomberg Media CEO
Smith’s vision is to use that advantage of being able to surround a targeted consumer across platforms – television, digital/digital video, print magazines, radio/digital audio, and live events – during different times in the media consumption cycle to become the leading multiplatform global business media company.
So, how can media brands best advance the significant shifts in strategy Smith suggests? Go all in: “The most dangerous thing in managing change is incremental change,” Smith said. “Most traditional media companies have hurt themselves terribly over the last decade with slow, incremental change. We’ve seen better success with rip-the-Band-Aid-off, deep transformation in talent and structure in the organization. Radical change is a better bet.”
– Jen Robinson | May 4, 2016