Thursday, March 24, 2011

New publisher, new strategy: USA Today strategy should 'work' for web, have little effect on mobile and tablets

The changes occurring at USA Today has gotten a fair amount of press coverage lately, as newly appointed publisher Dave Hunke quickly attempts a makeover of Gannett's flagship national newspaper.

Dave Hunke, who was named USA Today publisher in April of 2009, was previously known for his bold move in Detroit, slashing home delivery to just three days for the Free Press and News dailies. “You can’t negatively market your way into anything,” Hunke told the News Hour in 2008. “But by mere fact of some scarcity and I guess you could call it deprivation, I think we’re going to find out a lot very quickly about the mass market’s adaptability to digital delivery of edited, written — meaning with a beginning and end — news content."

But a year and half later the move was somewhat reversed by management of the papers after Hunke had moved on the McLean, Virginia.

Now the national newspaper is attempting major changes, though in very different areas because USA Today is a very different newspaper. As a national daily, one known for years as the newspaper found on the floor outside your hotel room when you were away on business, USA Today can not slash costs by cutting home delivery. It can, however, employ another familiar move: layoffs. The paper laid off around 130 employees last fall.

An element from the USA Today website promoting their blogs.

But there are lots of new moves also being made at USA Today. David Payne, for instance, has been brought in as the new head of digital. Payne bring smobile and video experience from his time at CNN, which will be very useful. But Payne's background is actually law, so it may be that he has been brought in more for M&A purposes than to organically build digital capabilities.

And that is a familiar story at Gannett: buy rather than build. Gannett owns some interesting digital properties such as PointRoll and ShopLocal. It has allowed the company to tell shareholders that they are growing digital. But a property bought by a traditional media company like Gannett is usually about to end its innovative early days and become a legacy brand, albeit, a digital one (think 'CareerBuilder').

The problem Gannett has had is that it almost always makes moves to prevent a decline, rather than to actually build a business. Buying digital properties may be looked on by some as a move forward, but it is almost always done to counter the impression that the company is behind and declining. Does anyone seriously think the changes being made today are the result for a daring march to the future, or a reaction to past performance?

So what is the team at USA Today doing now? According to the AP, Hunke is looking to make the daily newspaper more "advertising friendly", though I think this applies more to the daily's website. He also wants content designed for mobile and tablets, while at the same time recognizing that the print product is, like it or not, going to appeal to an older audience.

I think Hunke and team are partially right.

Throwing the kitchen sink at the website, as one critic called it, will most assuredly drive traffic. Hunke and his editors should see results from their efforts here, results that could, in theory, lead to greater ad revenue.

But in the area of mobile and tablet, Gannett has some serious disadvantages. First, in order to improve its ability to succeed in both areas, USA Today would have to increase the demand for its information. It can do this one of three ways: improve and grow its editorial capabilities at USA Today (it won't do this, it is moving in the opposite direction), think like a portal, or create new brands.

I believe the last two options are the way to go. By thinking like a portal, USA Today could take advantage of its corporate capabilities, its nationwide network of newspapers, television stations, journalists. Unfortunately, Gannett is very much a promote-from-within company. This served them well in the eighties when many in the newspaper industry wanted to work for Gannett and saw a move their as a long-term career move. Today, it has left the bench pretty empty of managers who can both understand the company's corporate culture, while at the same time are able to bring in experiences from the digital world. Hiring digital young guns may be satisfying in the short term, but the positive feelings usually end the day the hired hand sits across the table from the editor of a local daily and they both leave the room thinking the other person is crazy.

A great example of 'old media think' has to be The Daily, News Corp.'s experiment in tablet-only publishing. With some $30 million dollars behind it, a brand news staff, the iPad-only digital newspaper was built the way a print newspaper would be built: hire a staff, spend a lot of money, and launch with a lot of fanfare. It was all so unnecessary.
With the resources of the WSJ and local and international news properties, not to mention television content, The Daily could have been launched with a far smaller staff, and far less money. Instead, Rupert Murdoch could have announced the appointment of a couple dozen staffers and told his company that they all work for The Daily now, and that when the editor of The Daily wants access to content they are to comply. The left over $20 million could have been used to promote the tablet product, or better yet, to launch additional digital products.

For Gannett, however, to begin to create new digital brands, the company will have to undergo a major shift in the way it thinks and asks. But there is no reason it can't be done. But publisher Hunke will have to use his experience inside Gannett to maneuver the corporate headwaters. As a Gannett veteran I see no reason why he can't do it. It will all be a matter of how much risk he is willing to take -- with his brand and his career.