Last time, I presented the idea that media companies need to consider restructuring by offloading their internet business to a smaller, more agile company. Then what?
The second major piece of the restructuring puzzle is to develop a technical backbone that takes advantage of the company's strengths.
Media companies have two great advantages - local knowledge and local readership. Internet giants like Google and Yahoo are not going to develop first hand knowledge of your local area. They are in the business of organizing information, not understanding local culture. Learning what the people of Austin, Texas, like and want is not something you get from a computer. You get it by living and working in Austin.
Serving that local market in the Internet age will require different cost structures. Not everything that used to work will continue to work. Every dollar made from print adversing will not necessarily be replaced by a dollar of online advertising. In some cases, it may be a quarter, or a dime.
All hope is not lost, however. There will be new, innovative technologies that enable local businesses to connect with their customers. It started with simple banner and text ads, but innovation is not even close to stopping there.
Every twist on online advertising will require creative, quick thinkers who can develop software at breakneck paces. Some ideas will work. Most will fail. As a media company, youÕll need to place bets on new technologies early and often.
But how? Creating a strong technical team capable of cranking out advertising products at a pace more normally associated with a silicon valley startup is a massive challenge. I'd go as far as saying it's almost impossible for a large media company.
But what internet media companies can do (that most do very poorly today) is build a technical framework into which they can plug innovative products created by partners, whether those parters are Internet giants like Google, or 2 guys in a San Jose basement.
Some keys to successfully creating a flexible technical backdrop for a local media company:
- Forget about building websites and design. Extremely talented web-oriented graphic designers can be outsourced project by project. You'll get high quality, fresh designs without the overhead of full time employees.
- Concentrate on the boring stuff. The back-end systems are what matter. The goal is to make it simple and easy for your advertising and content product partners to integrate with your websites.
- Hire Internet people, not media people. Make no mistake - this technical transformation is not trivial - you will need lots of people on the cutting edge of technology to pull it off. Find a way to get them on board. Learn what motivates them and let them run. Hint - it's not money or ping pong tables.
- Single sign-on. It's a requirement - don't just ignore it and pretend it isn't. Nobody wants to sign into your newspaper website, and then also sign up with a different username for one of your partner's sites (which, by the way, might look just like yours). It's confusing, unnecessary, and a difficult problem to solve. But solve it.
- Manage your data. User lists and contact info will be fragmented throughout your organization if you follow this strategy. Things like opt-in status, unsubscribes, and mailing lists will be a nightmare to integrate manually. Automate this data integration. Again, it's a challenging task, but it has to be done. Data is too important and valuable to keep sectioned off in silos because "the system" couldn't handle it properly.
- Remove hurdles with flexible technology. Suppose an advertising product vendor wants to ask a consumer to sign up for a newsletter on your newspaper's signup page. Not only should this be possible, but the end result should be a disciplined flow of data, not a haphazard collection of incongruent lists. The answer to a request like this should always be "Yes, you can do that, but here are rules.", not "The system can't do that." or "yeah, but we'd have to keep separate lists".
- Provide an API. Any reasonably competent software developer should be able to figure out how to build a product that integrates with your platform without talking to anyone at your company. That includes, signup, authentication, payment, permissions, unsubscribes - the whole nine yards.
The theme here is to be the glue that collects and stores the content and information that makes a media company valuable and outsource the details of the rapidly changing internet marketing world. If you do this, you will be able to create a process of rapid experimentation without having to bet the company on any one technology development effort.
It's going to be challenging, but whoever does this well will build a winning media company in the years to come.
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