Rebuild the share of wallet you've lost
James M. Moroney, chairman, president and CEO of A.H. Belo Corporation and publisher and CEO of The Dallas Morning News, was the recipient of the 2016 Frank W. Mayborn Leadership Award at last week's News Industry Summit.
The award is named for Texas newspaperman Frank Mayborn, whose foresight and guidance helped shape SNPA in the early 1950s and who served as president of SNPA from 1961 to 1962.
In presenting the award to Moroney, SNPA President David Dunn-Rankin called him a champion of journalism. "He believes that journalism is critical to the success of our democracy," Dunn-Rankin said.
Following is the text of Jim Moroney's remarks, in accepting the Frank W. Mayborn Leadership Award:
You, all of us in this room, are guardians of the Republic.
Republic ... from the Latin "Res Publicus" or "the concern of the people"
But unlike the Roman Republic, in this time, in this country, we all have a vote. That vote is the equity all of us have in the Republic. The Republic is a concern of all the people.
And that's what makes us a democratic republic. A government of the people, by the people and for the people. All people.
Yet even with the power of government dispersed among all the people, the founding fathers knew that those in power don't want to give up their power. And unfortunately, they often abuse their power. Just as King George and Parliament did with their taxation policies for the Colonies.
So the founding fathers put in the first amendment to the Constitution "that Congress shall make no law abridging the freedom of the press."
In this way they designated the free press to be the guardians of the Republic. The guardians of democracy.
Quotes from Jefferson and others.
"A popular government, without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy or perhaps both." – James Madison
"No experiment can be more interesting than that we are now trying and which we trust will end in establishing the fact, that man may be governed by reason and truth. Our first object should therefore be to leave open to him all avenues to truth. The most effective hitherto found is freedom of the press." – Thomas Jefferson
"Our liberty cannot be guarded but by freedom of the press, nor freedom of the press be limited without the fear of losing our liberty." – Thomas Jefferson
Today, those of us in this room, newspaper companies, are providing more than half of the city, county and state reporting in our country. Probably more.
The press's duty to citizens is not confined to the federal government. It does and it must include local, county and state government. And so while our resources to do this reporting are declining due to the industry's declining revenues, the size of government continues to increase as the population increases.
To do the job the constitution enshrined as our responsibility, we need the scale in our news resources that matches the scale in government or I fear we won't live up to the job the founding fathers expected us to perform.
The only way to reverse this decline in our news resources is to reverse the decline in our businesses. To reverse this decline in our businesses we must do the following things:
Acknowledge and make it a core assumption of your strategic planning that the printed newspaper business is in an irreversible decline. Each successive year there will be less copies sold and less advertising sold. Until you believe this, you are waiting and hoping for the decline to turn around or at least bottom out.
And if you are doing this, even just a little bit, you won't develop the strategy with the sense of urgency to solve your business model challenge. You will continue to cut and cut to support your desired level of profitability. You may be extending the runway, but without a sustainably profitable business model, the runway still ends at a cliff.
The incremental revenue growth you derive from digital advertising and digital only subscriptions is very important, yet recognize that for at least the next five years they will be insufficient to offset the annual incremental declines in revenues related to the printed product. So, if you are relying on these two sources of revenue as your growth engines, your total revenues will continue to decline for at least five more years and more likely eight to 10 more years. And without other sources of revenue it won't be that your digital revenues will have grown so large in five to 10 years to turn things around, it will be that your print related revenues will have declined so much that their annual incremental decline will have become negligible. An odd silver lining in an otherwise dark cloud.
Now for the good news.
You can change this. Starting now.
You have a brand that represents trust and credibility. You may take it for granted but just ask companies that are trying to build trust and credibility into their brands and they will tell you how hard it is to come by. This is a powerful differentiator for our companies.
You have a customer base that has been doing business with you for years and years. Their loyalty to you is still there.
You have a great deal of resources dedicated to your sales effort in your market. This gives you a competitive advantage in your local media marketplace.
Your biggest competitor, television stations, are still feasting off of political advertising and retransmission consent revenues. They don't have the sense of urgency you have. You can beat them to this game I'm about to describe.
Here it is:
Acquire or partner or license marketing services that are closer to the bottom of the marketing funnel. Your local businesses are moving their marketing budgets from awareness to results. They don't want to spend money with you. They want to invest money with you. They don't want a CPM. They want an ROI. The opportunity to be the premier provider of these mostly digital marketing services is still wide open in local markets.
If you dismiss or forget everything else I have said this morning, take this one thing back to your company.
So I will say it again: Your local businesses are moving their marketing budgets from awareness to results. They don't want to spend money with you. They want to invest money with you. They don't want a CPM. They want an ROI. This opportunity is still wide open in local markets. So go get it.
Finally, you'll never be more successful than your sales department is successful. If you've acquired or partnered or licensed marketing services that are close to the bottom of the funnel, you must take a part of your sales resources and retrain them or rehire in order to have people who understand marketing and how to build tailored marketing solutions for each client.
If you do this, you will begin to rebuild the share of wallet that you've lost from your best legacy customers. That's where you start. With the customers with whom you already have a trusting relationship. Then flush with these successes, your new marketing services and the marketing solutions they enable you to provide will open doors to new customers.
Do this and do it well and you'll restart annual growth in total revenue and be back on the road to sustainable profitability.
And if you get to that place, then you can stabilize or even build back your news resources and do for the citizens of your hometown what they need for you to do: be the guardian of our democratic republic.