In the past week, INMA has helped surface the news industry’s response to the coronavirus crisis through surveys on operational best practices and early signs of advertising weakness and revenue shifts, as well as cutting-edge Asian case studies on early adopters, and guidance on the work-from-home movement through other case studies. You can find all of INMA’s COVID-19 coverage here.
In a members-only Webinar on Thursday, INMA CEO Earl J. Wilkinson presented findings from the surveys and current trends from the front lines, sharing the fast-emerging, up-to-the-minute issues that are rapidly coming to the forefront for news publishers during this time.
What are the early forecasts and scenarios for revenue declines?
What are the winning and losing advertising categories?
How can news media brands join the “brands with purpose” movement?
Wilkinson opened the Webinar by saying news media has never been more read, more used, or more consumed than in the past month or so. He added that this much new traffic could result in an uptick in new digital subscriptions.
Publisher pain points
“I know a number of you are still dealing with the operational issues,” Wilkinson said. “About half of publishers say they are struggling in the chaos of the moment.”
From the survey, he shared the primary pain points media companies report feeling right now:
- 56% say balancing strategic priorities. These include health and well-being versus commerce, revenue versus travel restrictions, and focusing on the long-term.
- 29% say fear and misinformation.
- 27% say lack of structured guidelines to manage COVID-19 response.
The survey indicated about half of news media companies were prepared and half were not. “There’s obviously a huge shift in working from home,” Wilkinson said. “You’re seeing examples of companies who are going through these test runs of running a news operation with people working from home. We’re seeing workplace practices just shatter.”
There are other operational details beyond the survey that have surfaced in the last week:
- How to make newsstands, distributors, and street sellers safe.
- Evidence of publishers encouraging print readers to use digital delivery.
- Legal matters: Are print newsrooms considered “essential?” In Italy, the answer is no. In San Francisco, it’s yes.
“I’ve got to tell you, I’m not sure if it’s about making our distributors safer but rather to be perceived as safer from the customer perspective,” he said.
The legal matter is the one that will become real issue in the days ahead.
Advertising losses have already begun
“From last week’s survey, we had already seen 62% of publications that are already experienced a jolt in advertising,” Wilkinson said. These declines revolved heavily around travel and tourism, events and culture, programmatic, and high-ticket items such as real estate and automotive.
“Meanwhile, we only had one human being out of 56 say they’ve taken a small negative hit on digital subscriptions,” he continued. “If anything, we are seeing evidence of a surge. I can’t quantify that yet, it’s just anecdotal.”
He also shared data that was gleaned from a raw INMA survey about advertising done 18 hours prior.
“The No. 1 thing publishers can rally around, bar none — not even close — is to support local business. It’s not a money play, it’s a human play. It’s the right thing to do. But also from a PR perspective, it’s softening your brand and projecting your brand.”
Local small businesses don’t have the resources to survive this without help. “They are reinventing themselves in a survival play as take-away restaurants,” Wilkinson said. “How do you inject yourselves, your brand, your enterprise, your soul, into that need and effort?”
Grocery stores are definitely winning in this environment. But they aren’t advertising; they’re pulling ads. Why? Because they don’t need to advertise right now.
People are staying in, and there’s a trend against shopping locally. Many businesses don’t have a lot of available goods to sell.
“How much of this is about selling more rather than diversifying away from ads?” Wilkinson asked. “I’m a little surprised it was about half and half. But there are still a lot of folks, about 80%-90%, in the advertising space. I don’t see any quick ways you’re going to overnight get into [digital] subscriptions. That’s a long ramp-up.”
There are clear winners when consumers socially isolate at home:
- Social media.
- Streaming TV.
- Video games.
There are also clear losers:
- Out of home: billboards, public transit ads.
- Radio (commutes).
- Direct mail.
Trends from past downturns can apply today
There is a lot that news publishers can learn from previous downturns about surviving this and maintaining advertising:
- It sustains a brand’s long-term growth.
- Could potentially be a market share play.
- Avoid price promotions. They usually damage brand values and aren’t profitable.
- Insights: digital channels, notably short video and social that drives commerce.
As e-commerce rises, publishers will find themselves a bigger part of a content-to-commerce revolution, Wilkinson said. “We were going to focus on this in Paris and will be covering that a lot more in the months to come. It’s a rising trend in places like India and among magazine publishers. Anything that drives e-commerce could be a real winner in this environment.” How do you shrink the runway between consideration and the last click?
Trends and ideas that lurk in the shadows of the good times leap forward during the bad times:
- Print elimination: Is this the tipping point?
- E-commerce: content-to-commerce.
- Work from home: Who should be in the office?
- Digital socialising: What opportunities are there for publishers?
“I think that a lot of companies that talk about print elimination, this might be the moment for a lot of them,” Wilkinson remarked.
During a downturn, consumers flee luxury and embrace the basics. He advised publishers that they must put public interest over sales generation.
“Don’t be tone deaf in this environment,” Wilkinson said. “I think ideas to lower paywalls on coronavirus coverage is the right move. You benefit from that far more than you’re hurt from it.”
Key trends in a downturn include:
- Consumer behaviour shifts to caution and concern.
- Creative styles turn muted and restrained.
- News media’s first concern should be their reputation and helping their customers through the crisis.
- Prioritise public interest over sales.
- Be consumer-first and keep a sense of optimism.
Wilkinson quoted Mike Wilson, executive editor of the Dallas Morning News, who told INMA this week: “The best advice I can give is to show vulnerability and take care of people.”
Don’t just think about shrinking, Wilkinson advised. There are opportunities that exist in times like this. “Build on this trust moment and in a very subtle way, accelerate digital subscriptions.”
Other opportunities include:
- Productivity, efficiency, and the home.
- Home offices, video services, and collaboration tools.
- Music, gaming, groceries, fitness, and subscription services.
- Digital socialising.
- Accelerate concepts behind content-to-commerce.
Publisher lessons from the front lines
“I’ve heard anecdotally from third-party sources that Chinese publishers have seen about a 50% decline in advertising,” Wilkinson said. “The models that we’re seeing in the field in our surveys in the last 18 hours show around an 18% decline in the first quarter [of 2020], March is awful, and it’ll be more awful in the second quarter.
“There’s a little more optimism about the third quarter, but we’re still looking at a median of 30% decline. I don’t know if the fourth quarter will be a new normal or not. I’m trying to put together a recovery arc.”
Not a lot of information has come out of mainland China. There is a news industry there, Wilkinson said, but it has the thumb of government on its neck. However, they do function pretty much the same way as media organisations around the world.
Reports from China on the effects of the coronavirus on advertising during the past 2-3 months include:
- China’s advertising growth will decline from 7%-10.5% to 3.9%-8.4% in 2020.
- The winners will be e-commerce advertising (+17.7%) and social media (+22.2%).
- 47% of Dentsu’s Chinese clients said sales have been severely impacted by COVID-19, yet only 7% have stopped advertising. They just changed their focus and methods.
- 22% have changed creative, with a more regional focus.
- 14% have moved budgets from offline to online media.
China had the experience of lessons learned during the SARS outbreak in 2003, Wilkinson added. “I think what we’re experiencing right now is so peculiar, but it’s worth thinking about.”
In the last two to three months, China really shut things down. This resulted in all the trends one would expect: people spending more time at home, online, TV viewing, and lower retail sales.
“They went from a 6% GDP growth to 6% decline. That gives you an idea of the jolt,” Wilkinson said. “But the fog lifted. It’s still lifting.”
He asked the CEO of South China Morning Post what the takeoff was in Hong Kong. The virus hit right before Chinese New Year, and in the last week he reported that the company is starting to see some return to normalcy. This reinforces the eight-week theory of time of significant impact.
Singapore Press Holdings is concentrating on building teamwork. The company set up a Team A onsite and a Team B offsite. If Team A is infected, then Team B takes over. They give staff options of where they can work, and have beefed up infrastructure. They also extend efforts to make staff feel safe when they do come to work, and have taken a management stance of social responsibility.
In Germany, Vorarlberger Nachrichten created the hashtag #vorarlbergstickstogether, developed a microsite to recruit volunteers to help the elderly, and launched a daily children’s page for families. The company livestreamed Holy Mass, created a campaign to help promote local businesses, is offering free advertising for companies to announce their crisis services, and held a social distancing balcony concert for local musicians.
“What I hope you take away from this is that from an audience perspective, we’re seeing a surge in traffic from 50% to as high as 83%, that I heard from an African publisher,” Wilkinson said.
We have a clear road map for operations, he added, and there are clear winners and losers in the advertising space.
“We don’t want to flatten the economic curve,” Wilkinson said. “There are clues from China that this is possible (a return to normalcy soon), but it’s too early to tell.”
He encouraged publishers to use trends from past downturns, and learn from the stories from the front lines.
“There are, I believe, opportunities in decline. Your goal here is to optimistically thrive through this change. You’ve got to project certainty to your employees, your clients, and your stakeholders through this chaos. Your stakeholders demand it of you as leaders.”
INMA: Are there any good examples of digital socialising?
Wilkinson: On a human basis, we’re beginning to see friends and family and loved ones spending a lot of time in a digital community, on video etc. With video we’re seeing concerts, such as with local musicians. Keep an eye on this through the weekend. It’s something that’s quickly rising in terms of how people interact with each other.
INMA: Do you have any data on the Italian market?
Wilkinson: No, we don’t have that yet. What we have right now are a bunch of anecdotal stories coming out of Italy. But we don’t have data yet.
INMA: Any numbers on people who lowered their paywalls and the impact?
Wilkinson: We don’t know how many have lowered their paywalls. It’s so raw right now there’s no way for us to quantify it. I want you to do the right thing but also get the PR benefits from it. I wouldn’t lower your paywalls completely, but around COVID-19 coverage. It’s about the moment, not the paywall.