Change. Or Die

David Murphy

Colin White, UK Chief Executive of Oxygen8 Communications, offers advice to newspaper publishers looking to make a success of the mobile channel

Colin WhitedigitalopportunityThe steady decline in newspaper readership and revenue has accelerated dramatically over the past 12 months, with publishing companies seeing upwards of 80% of the value wiped off their shares. As the recession hits advertising revenues, particularly the classified car and property ads, there is growing pressure on publishers to fast forward their forays onto the web and mobile to drive significant incremental value.
And following the UK governments recent announcement that all homes should have broadband by 2012, the writing is clearly on the wall for the printed page both national and regional publishers need to take a radical look at their business strategy.
One strong point in their favour is that newspapers have strong brand value and are a  trusted product. But even for those publishers that have built up a strong online user base and brand, turning that audience into revenue remains a challenge for organisations still entrenched in the cultural attitude of the printed medium.

Classified opportunity
One of the key changes is a shift in model, most notably the move from paid to unpaid classified advertising. Rather than charging the advertiser to place a classified ad in the paper, publishers can now deliver classified ads to consumers via mobile phones, with each responder paying a small charge. By offering this free advertising model, publishers can reinvigorate the classified advertising market to deliver incremental value to the consumer audience.
Taking this approach, sellers can create ads using their mobile phones, including a photograph or video. Buyers express an interest by sending a text message to a Shortcode number which then prompts the release of contact information from the buyer to the seller. The seller also receives real-time alerts whenever someone responds to the ad.
With a flexible, scaleable mobile platform that can handle hundreds of connections and messages per second, publishers can manage numerous classified ads and connect hundreds of buyers and sellers simultaneously.
This real-time, two way communication between buyers and sellers encourages greater audience interaction, whilst also driving brand value and loyalty. It also provides publishers with unprecedented access to customer information, which can be used to support complementary product and service advertising around the main ad, maximising revenue opportunities.

New model
Mobile classified advertising, however, does not require the large telesales force associated with the print model. Instead, organisations will become increasingly reliant upon technology platforms to manage and automate the sales process, and the remaining sales staff will have to be retrained to deliver the new services offered online and via the mobile.
Furthermore, publishers need to recognise the need to leverage technology to co-ordinate both Internet and mobile advertising, to co-ordinate marketing across every platform, and to maximise the strong brand and existing online traffic. Operating increasingly in an international market creates new opportunities to grow the audience, but also presents challenges in delivering relevant promotions in different markets, undertaking affiliate marketing programmes and identifying new advertising partners across the globe.
This organisational and cultural change will undoubtedly be a major - probably the major - issue to address if publishers are to successfully tap into new revenue streams.

Local demand
It is also important for publishers to recognise the growing demand for local information. Local portals providing up to date information on towns, even villages, are becoming increasingly popular. They are also enjoying a huge increase in user generated content, thus minimising the operational overheads for publishers.
This localisation trend provides a new opportunity to offer location-based services for local advertisers, enabling them to exploit the location of the mobile user or the use of local IP identification with the provision of real-time, personalised offers. These simple services can deliver a significant revenue stream, with the additional benefit of using the strong customer data to drive further revenues in the future.
Indeed, there are opportunities to provide advertisers with richer data and richer marketing using online and mobile media than any publisher could ever offer in the printed environment. Furthermore, while the demand is for increasing localisation, publishers also have a far greater opportunity to leverage the massive global audience to drive significant revenue streams through global advertising and content syndication.

Global phenomenon
The shift in customer behaviour and attitudes to seeking news has been dramatic, and it is a global phenomenon, even in counties with low Internet penetration. From watching rolling news information online to the growing demand for local information, the old habits of reading the daily newspaper and watching the 6 oclock news are dying out. 
With huge competition for advertising spend, the ability to offer a free advertising model to a strong user audience is compelling. Combined with in-depth customer information, the provision of simultaneous advertising and strong location-based services, this creates a powerful publishing model. It is now up to the publishing companies to make the staffing and operational changes required to maximise the new media marketplace.
But there is no turning back: if publishers dont make organisational changes today and embrace new opportunities for driving mobile and Internet revenue, they will see further steep decline and may well end up out of business.