Disruptive Innovation

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Disruptive Innovation

Native advertising: What is it, and why now?

14 July 2014 · By Steve Gray

“I want my ad to go right here,” Jerry Coolman said. He pointed at the middle two columns at the top of the newspaper page – right in the middle of an article. He wanted his ad for lawn tractors to hit readers smack between the eyes.

“Jerry, we can’t do that,” I said. “That’s the reader’s space – we can’t plunk an ad down in the middle of it.”

That was 1983. Now, 20 years later, it turns out we can plunk an ad down in the reader’s space. It’s being done more and more, and it’s being called a new name: “native advertising.”

Some are hailing it as a breakthrough for advertisers and for media company revenues. Others are reviling it as ...

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3 ways to reverse the industry’s biggest disruption: Loss of advertising accounts

16 June 2014 · By Steve Gray

About five years ago, on a weekend, Derek May — then publisher of the St. Augustine Record in Florida, United States — was doing what many publishers were doing at the time: trying to figure out the steep decline in advertising revenue he was seeing in his unit's financials.

His question: What was the main cause of the decline? The recession was the driver, of course, but was it mainly hitting certain categories of advertising? Certain types of advertisers? Big advertisers? Small advertisers?

Thanks to his background in accounting systems, he was able to plunge into the Morris Publishing Group’s business data warehouse to sort it out. After a while, he realised none of the standard reports answered a key question: How many businesses were advertising in the most recent period compared to the previous period?...

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Media companies must engage mobile users with more than news

20 May 2014 · By Steve Gray

To someone who has only a hammer, everything looks like a nail. In the media industry, the hammer we have is news. And right now, the newest nail is mobile.

With mobile usage exploding, our industry is determined to pound that nail with news as hard and fast as we can. It looks like a must-do, a matter of survival, and — we hope — a new opportunity to reach people, sell advertising, and make money.

But mobile is not the nail we think it is.

By thinking of mobile as a distribution channel for news, we are missing what mobile really is. It’s not a channel — it’s a situation. And that situation is producing a new set of human needs and behaviours that present new opportunities.

In that new space, news can expect to get a certain share of users’ time and attention. We want and need to get that share. But that share will be tiny compared to the new, uniquely mobile uses that are emerging.

Our fixation on news will almost surely cause us to miss things we could and should do to win in the local media space.

It’s happened before.

When the desktop Internet arrived, while we ...

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How media companies can reclaim recruitment services market

21 April 2014 · By Steve Gray

Say the word “recruitment” and most newspaper executives groan. Over the last seven or eight years, it has shrunk to just a fraction of its former size, and it’s still slipping.

At Morris Publishing Group, we’ve been looking hard at this vertical for several months. We’ve been trying to figure out two things:

  1. How can we do better at what’s left of our existing business.

  2. How can we create new wins in this space?

We’re beginning to see the path ahead, so it’s a good time to share some of what we’ve learned.

What’s happened to recruitment is a classic case of disruptive innovation. We ruled the space in the pre-digital era. Then new digital technologies enabled a new set of players to come in underneath our expensive print solutions. They attracted big audiences and took away huge amounts of our business.

Our industry went to digital, too, but we slowed only the revenue declines. And, of course, we had a whopping recession to accelerate the trends.

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Media disruption: bad for us, wonderful for humanity

24 March 2014 · By Steve Gray

Disruption of the mass media is a big subject. But here’s an even bigger one: the incredible amount of good this same disruption is bringing to humanity worldwide.

So this time out, let’s forget about the mass media for a few minutes. Let’s take a look at the massive and mostly positive impact this digital revolution is having and will continue to have on humanity.

To begin, let’s look again at the “infinite pipe” graphic I’ve used several times before in this blog.

This chart illustrates how the flow of information among humans has expanded from almost nothing during most of our 200,000-year history to near infinity in just the last decade or so. A few weeks ago, I wrote about this from the perspective of the media. Now let’s look at it from the perspective of humanity.

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Why the definition of news must change in the age of print + digital

17 February 2014 · By Steve Gray


Nothing is more deeply ingrained in the newspaper industry than the definition of news. It’s the foundation of what we do, the “product” we use to attract and serve consumer audiences, and the platform on which we sell most of our advertising.

Now the definition desperately needs fundamental change, as I’ll document below. If we hope to be relevant and engaging to the people in our markets, we need to start over, beginning with a fresh answer to the question, “What is news?”

Nobody in the industry wants to do this, and very few are. But a blog posting a couple of weeks ago by Andrew Davis, aimed at the magazine industry, pointed out what’s needed. Here’s the payload paragraph:

“What are you doing to change what you print? How can we blame consumers for canceling their print subscriptions when we haven’t redefined what role the print product plays in the digital world? I challenge you to put yourself in the shoes of your primary audience. Spend the day consuming the content they consume, visiting the Web sites they visit. Then ask yourself what you could do to make your print product more valuable, given the experience you’ve just encountered.” (Emphasis added.)

He’s talking about printed magazines. But the message is exactly on target for newspapers, and for both digital and print content. I’d rephrase that last sentence: “...what could you do to make all of your content more valuable, given the experience you've just encountered?”

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5-year forecast begs the question: How fast can you invest to turn things around?

20 January 2014 · By Steve Gray

When your industry is undergoing massive disruption, getting a glimpse of the future is priceless. The more you know about where things are going, the smarter you can be about what to do right now.

For that reason, the report released last week by Borrell Associates — “The Future of Legacy Media” — should be required reading for everyone responsible for the health and sustainability of any legacy media business in the United States and Canada. And for those elsewhere, the executive summary would make excellent reading as a directional indicator of what’s sure to happen around the world.

I’ve been a big fan of Borrell’s reports for almost a decade. Gordon Borrell and his team have consistently done an excellent job of producing data to help legacy media companies understand what’s happening to their business. And for me, the most useful pieces of their work have been their five-year forecasts of revenue and market share.

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The big picture: Mass media era was the blink of an eye

16 December 2013 · By Steve Gray

In the midst of major change, we can only make the right moves if we properly understand what’s happening.

Right now, we in the mass media are wrestling with the most massive change we’ve ever seen. But, as in the parable of the blind men and the elephant, we’re only aware of the tiny part of this change that we touch every day.

The change is vastly bigger, much farther-reaching, and much longer lasting than we realise. We need to see the whole picture to understand what to do about it.

Seen in its true scope, this is the largest change in human history. It’s sweeping the planet, and we’re only in the early stages of it.

It will continue through this century and beyond, forever changing the fabric of daily human life, the dynamics of individual fulfillment, productivity, and freedom, and the structures of government, society, business, and the economy.

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We are witnessing “the end of advertising as we’ve known it”

11 November 2013 · By Steve Gray

I was surprised to hear those words come out of my mouth recently, during a strategic discussion about where our company, Morris Communications, needs to be in three to five years.

I heard myself say, “We need to realise that we’re witnessing the end of advertising as we’ve known it. Not this year, not next year, but over a period of not very many years.”

I’ll admit, there’s some hyperbole there. But there’s enough truth that anyone responsible for determining the future of a company built on traditional advertising revenue needs to start thinking that way.

I hasten to add that it’s not the end of advertising — far from it. But it’s the end — or at least the shrinking to near insignificance — of the Mass Media Era model of advertising that has been our way of life and the basis of our business.

Until I heard myself say it, I’d never framed the challenge in such extreme terms before. But I knew why I was saying it.

A few days earlier, I’d been preparing a strategic planning session for a board meeting of a small newspaper company whose board I chair.

Each year, I begin the discussion by laying out for the board the clearest views I can find regarding the future of the business. I had been putting together some charts to help the board see where our business stands and what might happen in the next few years.

First was a chart based on the Newspaper Association of America’s public reporting of annual advertising revenues among U.S. newspaper companies.

The chart shows total newspaper ad revenue, both print and digital. The steady decline is no secret in our industry, but seeing it in chart form points out how relentless it’s been.

As the stockbrokers say, past performance is no guarantee of future performance. And there are individual newspapers here and there that have beaten the trend for a quarter or two, or even for a year or two.

But for the industry as a whole, it’s hard to picture this revenue slide ending anytime soon.

That’s where we’ve been. But for good strategic planning, you also need the best possible guesses about what’s ahead.

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Desperately needed: more innovation on the audience side

13 October 2013 · By Steve Gray

Just how disrupted is the old newspaper business model — the model that’s centered on providing news to a geographic market?

A lot more disrupted than many people in news media think.

The local media industry is scrambling to innovate around sales. This is seen, for example, in the race to create new digital sales teams and agencies selling digital marketing solutions to small and medium businesses.

And the industry is innovating around costs by consolidating, outsourcing, and otherwise whacking at the high costs of producing and distributing its products.

But I don’t see a lot of innovation happening around the content model that’s been the basis of the newspaper business for the last 100 — even 200 — years.

It seems most of the news industry still believes that gathering and distributing news is a sufficient model to support the business. And this, despite overpowering evidence of steadily declining print circulations and steadily shrinking digital audience shares.

I’ve made this case before (e.g., “News is no longer enough to support a geography-based media business model” and “Everyday goal for local media: the greatest show on earth.”) But I still think the massive and fundamental disruption of our content model — or, more accurately, our audience-creation model — is not well understood.

This time, I’ll try a visual treatment.

Let’s go back to the 1950s, the heyday of the printed news business model. Back then, news was hard to gather, hard to transmit, hard to publish, and hard to distribute — and yet we had it all well in hand.

We had reporters for local news and teletypes and wire services for news from around the region, nation, and world. And we had printing presses and carrier forces for distribution.

In that technology-challenged era, very little new information arrived in the home each a day. Radio brought some — mostly entertainment plus some national news. Television was in its infancy, with a few channels providing mostly entertainment. The only full-service source of the day’s latest news and information was the newspaper.

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About this blog

I’m Steve Gray, and I blog about disruption in the media – why it’s happening and what to do about it. As the world’s information pipe expands to infinity, my goal is to help the news media industry see the new opportunities we can create in our markets. I led the American Press Institute (API) Newspaper Next project from 2005 to 2009, teaching thousands of media executives to create new business models. Since then I’ve worked on innovation projects with the newspaper, magazine and book divisions of Morris Communications in Augusta, Georgia, USA.


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The basics of media disruption

Part I: The Mass Media era: a 150-year bubble

Part II: The end of the Mass Media Era

Part III: What about news?


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