In newspaper publishing, Rupert Murdoch is cutting a wide swath through the Wall Street Journal and the New York Post –even shrinking the physical size of both newspapers to cut costs.
New channels–Craigslist, Yahoo, Google AdWords and others–have pulled classified and other types of ads away from newspapers. The New York Times, in an attempt to increase its online readership, is working on an API that aims to make the entire newspaper “programmable,” says Josh Catone at ReadWriteWeb.
An article titled The Newspaper Death Watch (April 28, 2008), in AdAge reported that classified revenue of $14.2 billion in 2007 was a drop of 16.5% compared to 2006. Weekday circulation dropped 28% from 1973 to 2006.
In the face of these sobering statistics, Rupert’s latest acquisition, The Wall Street Journal, is doing nicely, with daily circulation inching up 0.35% to 2,069,463, according to a piece in Forbes.com by Louis Hau. But Jeffrey Cole, director of the Center for the Digital Future at the University of Southern California, says about newspapers, “How much time do they have? We think they have 20 to 25 years.”
When channels change, there’s pain. Resisting? That’s a losing mindset that won’t forestall the inevitable. We suggest getting smart about the change and developing a strategy that exploits it.
Cross-channel influence and multi-channels
Here’s another reason why the shift in channels shouldn’t be resisted. Some of change comes from the Internet satisfying demand created in other channels. Did your customer see your product in a catalog or in an ad on TV, before a movie or in a magazine?
The decision to purchase isn’t always going to result in walk-in retail sales. People of all types who respond to the ease of Internet shopping simply punch up Amazon and in a day or two the product arrives. It’s simple, the transaction is smooth and their gas bill is lower because they didn’t drive to Fry’s or the mall.
What we frequently don’t see clearly is that closing a deal in one channel can be the end point of a process that began and moved through several other channels. The proliferation, overlap and interplay of channels means that multi-channel sellers need to balance the ongoing investment required by all channels. If a company sells wholesale into brick-and-mortar retail establishments, they still have to watch the Web and allocate budget to it. Not to work a dual or multi-channel strategy demonstrates a profound lack of understanding about where business is moving.
The new segmentation
With the growth of new channels, segmentation has become much more important. Each of you have the technology to slice, dice and grind data on customers as never before. Those of you who have been hearing me talk about this for the last couple of years can step out and get a latte. Everyone else: figure out your comprehensive channel strategy as this is an opportunity to get close and serve customers the way they want to be served.
Now, smaller and smaller slices can become legitimate “markets.” Even if you’re in a Fortune 500 firm, channel stratification and rationalization will net remarkable benefits. The Internet is giving rise to a new phenomenon: the ability to truly atomize the market, knowing and serving an infinite range of interests. A customer you sell to can be interested in many things all at once: vintage bear collections, California wines, security / blog spam concerns, and an affiliation with the Boy Scouts. No “simple” segmentation can capture that nuance, but the ability to understand and work with this nuance offers marketers tremendous power.
Most segmentation models still results in big buckets reflecting highly aggregated customers. The interests are refined enough to get to a “wants entertainment and ease of purchase” type profile, but not refined enough to identify entertainment favorites as both heavy metal and female country rock, and that most of the customer’s purchasing is done online.
New technologies and expectations now totally change the way customers are viewed and served. Those technologies give us a way to manage complexity. And just as we’re seeing the old top-down management style get atomized the more people work with technology, we’re also seeing that the old top-down segmentation is inadequate.
Companies that understand the many dimensions each customer has (and where they intersect) will be more effective than those that try to communicate by dumping customers into one of four broad buckets. The effect of over-broad segments in a world increasingly tuned to the refinements offered by Web 2.0 and 3.0? The messages and the content produced to raise awareness, provide consideration tools, or create preference end up sounding very similar–a little bland and too predictable. When you take the time to understand natural segments, you can use your marketing vehicles and language to create extremely relevant two-way communication with consumers.
Which brings us back to channels.
More channels mean more ways to sell, more places to be seen, an increased chance that if your product is on target the customer will purchase. If you know your customer well enough to create and customize for them, channel proliferation and focus presents a huge opportunity.