Clarity Through the Digital Looking Glass

I am old.

Or rather, in Internet years, which are very much like dog years, I’m old. I started my career back in the early 90’s in print and magazine publishing, film production and marketing, but by 1996 I was already eyeballs deep in all things World Wide Web with no intention of going back. I participated in building the first wave of local business websites, I created the first go-to-market online strategies for large companies such as Red Bull, I was among the first to help a major daily publication move online successfully and participated in the dot com boom and bust cycle. Since then I’ve helped three legacy media companies tackle the ongoing challenges created by this now not-so-new disruptor, the Internet.

 During the last 15+ years I’ve seen the progress we’ve all made at lightning speed, and yet within that super fast pace there are cycles that keep rolling through – stretching out the inevitable.  Each time I’ve worked with a traditional media company to help them wrap their collective brains around what the Internet means to them, their businesses, their advertisers, and their audiences, I was seeing recurring patterns and themes. Most of those patterns had to do with fear, disdain, a lack of understanding and an inability to make operational decisions for the company around all things Web that were better for the long haul. To add insult to injury the industry was changing rapidly and there was no shared understanding on the matter of “what to do about it.” I would include myself in having this sense of a ‘foggy future’. Everyone was making it up as they went, trying various strategies and tactics to greater and lesser degrees – over and over again.  Some of us had more success, some of us less.

It was The Three Little Pigs come to life: The fat and happy pigs were warned about the coming Big Bad Wolf. At first they shrugged and laughed because they thought their houses were strong enough to withstand any old wolf. However, the wolf blew down many houses. Many pigs survived, but they now lived in a rubble strewn world and needed to give great consideration as to rebuilding for the future.  Though my description is extreme in the pursuit of a point, it is not quite the indictment it seems. To the contrary, all of the pigs, like our media leaders, were smart and seasoned.  I didn’t get it. Why was there such floundering? Why did some leaders insist on more straw? (Here is where we end the analogy. You can thank me later.)

It wasn’t until 2009 when I was at a Borrell Local Media Conference listening to Clay Christenson speak on The Innovator’s Dilemma that the light bulb went off for me. Here was the ‘why’ of what I’d been experiencing. Later that day I saw Clark Gilbert at Deseret Digital Media speak. As a literal student of Clay’s he was able to take the theory and put it into application. Now, in all fairness I was already doing much of what they recommended due to my own experience in new media and digital marketing and in working with Gordon Borrell, but at that moment all of the murkiness of why this kept happening literally evaporated for me and in its place I was given a great framework against which to have the separate vs. convergence discussion. (Thanks, Gordon!)

To take a step back, the separate vs. convergence discussion is not new to me, either – as proof I still use a very 1999 word, integration, to describe the latter. In fact, I was a part of the first wave of the (in the immortal words of Offspring) “gotta keep ‘em separated” movement. When I was working with The Baltimore Sun, I helped their fledgling (and very talented) Internet team launch their brand new, SEPARATE, website: Sunspot.net.  As the first wave of separation passed (for various economic and systemic reasons which I won’t get into here) there was a pendulum swing back and many large media companies folded their young digital divisions.  And after another bout of separation, we’re beginning to see a retraction again. For senior executives, ownership and shareholders it can be daunting to continue investing as needed in the face of smaller margins and a seemingly risky future. It can feel downright foolish: Revenues are smaller by comparison and the defensive market positioning value doesn’t seem like enough of a pay-off in the short run. However, that IS the innovator’s dilemma playing out its drama over and over.  The saving grace is that disruption has taken longer than anyone anticipated and has not completely annihilated any medium. People still argue late into the night as to whether it will or won’t, the details of each argument stemming from the specific medium being discussed, e.g. newspapers, TV, radio, etc.

At this year’s Borrell Conference I had the pleasure of hearing another one of my idols, Seth Godin, speak. And in a room full of the most Internet savvy and successful legacy media leaders (I know!  Pinch me, right?) Seth told them that no matter what they were doing, they weren’t doing enough.  He told them that it isn’t simply about convergence or separation as they know it, but that there was a whole world of other companies who now had the means to eat their lunch and they had better start investing in all things other. I was surprised by the push back he got from the audience and their willingness to write him off as erudite, because at that moment the final piece clicked into place for me.

Now it’s possible that what Clay and Seth have been saying made sense to me because I’ve spent time in almost all legacy media types and pure plays and their solutions are the only ones that address universal challenges and patterns. But I think it’s because of time spent in pure plays that it always felt there was this lagging/nagging opportunity that was rarely discussed and almost never executed – the strategy of other.  (Please note there are several shining examples of legacy companies who successfully tried ‘other’ to be discussed in another posting.)

While legacy media has bounced between the two general notions of full convergence vs. separation for the last decade and a half, it is clear to me that there are five things that all legacy media companies should be doing to remain strong going forward. In my mind the five things also follows the stages of digital development we’ve all come through as well as serving as a great construct against which to look at operational organization. Certainly a company can pick and choose, but to me the most aggressive cure for the future is in rolling out all five:

1.       Legacy Optimization
I define this as all the things you should be doing to optimize your legacy media brand, assets, client relationships and sales opportunities. You should have best practices expectations for your legacy sales teams and products. I would even go so far as to say that you should have separate digital sellers here to go after new and digital-only business.  I’ve seen the successful use of both digital only Outside and Inside Sales operations to sell small dollar digital products like classifieds.  Further, this helps keep the Mother Goose laying golden eggs as long as possible, slowing disruption and softening the affects. (In other words your house might get blown down, but your pigs will still live.) According to Todd Handy, at KSL where Clark Gilbert leads the charge, this is Clark’s Transformation A. I’ll have to take his word on it.
 2.  Separation
I am going to define separation as the use of a separate business entity in pursuit of digital dollars in the marketplace.  Executing on this strategy is based on Clay’s thesis that the only way a company can stop from being disrupted from the outside is to create a wholly-owned entity that does it for you. There is enormous growth and upside here and, depending on your products, Inside and Outside sales teams can be applied accordingly. There are 3 tactics to implement here. Mr. Handy says that this is Clark’s Transformation B.
a.       Digital marketing services (the rise of the digital agency) – This takes advantage of the legacy media company’s reach in the marketplace and can serve advertisers no matter how the media or marketing landscape changes. The agency offers it all. It is now scalable and affordable both as a business and to clients
b.      Development of new online products and content within the niche of interest of the legacy company, e.g. local directory for a local news company, etc.
c.       Development of needed technology solutions

3.       Create Other
This is tricky. This is based on the notion that if the Internet lowered the barriers to entry and the pure play invaders are pouring in, redefining the whole media landscape. There’s no reason the company can’t do the same. The limitations and opportunities are exactly the same.  It is a chance for the legacy media company to look at redefining itself and create products that match how audiences are already redefining themselves. (Seth used the example that ‘local’ now means simply, ‘people like me’.)
a.       New pure play sites – both content and utility-based – completely outside the legacy media company’s sphere of interest or expertise. Silicon Valley is coming for you, why wouldn’t you want to be there first?
b.      New technology solutions (distribution, SaaS, dashboards, etc.)

4.       Optimize Everything Else
This strategy comes about as a result of 1 through 3. By now you have a solid infrastructure, some strong brands, some great sellers, some killer knowledge, a wide and deep reach and proprietary technology to boot. The sum total of this world needs to be used and re-used, referenced and cross-referenced, sold and re-sold, purposed and …well, you get the gist,  to the greater good of all.

5.       What’s Next
This is forever changing. But, what it means you should do is be looking to identify the next wave of technology and distribution (as with  mobile) and start weaving it into your efforts, as well as playing out its opportunities through the lens of the 4 above. The cycle begins again.

So those are my recommendations. They are not cut and dry and I’ve seen several hybrid scenarios flourish, but as a way to look at the model it’s the one that has made the most sense to me as a way to distill a churning reality.  And, at the very least, maybe it’ll give you a framework against which your company can discuss what can and should come next.

Finally, I’ve had several requests to talk about the details of how and why this has worked in my experience. That’ll come next.