How zero-base engineering the revenue team could save media advertising

By Bob Provost

Rutgers Business School

Newark, New Jersey, USA


I read with interest Earl Wilkinson’s News Media Outlook 2016 and, more recently, Geoff Tan’s “Change or Die” blog post.

Earl’s report explores the relative merits of propping up the façade of traditional media while reconstructing from within versus simply starting over with a NEWCO venture while allowing the traditional media company to run its course.

I have some strong opinions, largely based on personal experience and observation on both concepts.

Geoff’s post addressed head-on the dire straits many media organisations face, and his C.O.D. (change or die) Protocol is an in-your-face ultimatum to those who wring their hands while clinging to the status quo or embrace change “talk” but fail to “walk” the path of change.

To be sure, many organisations have realised the need to shed outdated and anachronistic behaviours and practices. A certain amount of “destructive change” is usually involved in reshaping an organisation.

Financial growth sometimes requires entirely new ways of structuring business models.
Financial growth sometimes requires entirely new ways of structuring business models.

But recognising and addressing the need for change must also involve “constructive change.” I’ve seen far too much cost cutting and downsizing carried out without a strategic vision for building a viable future.

In this post I’d like to discuss a “zero-base” approach.

Usually referenced as an accounting practice, zero-based budgeting is defined by Investopedia as: “A method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a ‘zero base’ and every function within an organisation is analysed for its needs and costs.”

When the Internet was nascent and computer technology was just beginning to promise efficiencies in the non-financial side of newspaper operations, I was fortunate enough to be CMO at a newspaper property that realised digital was the future of the organisation. It was not just a small contingent of futurists contemplating the possibility of a digital news and advertising presence.

Most news media organisations approached the development of an Internet presence incrementally. They added an Internet team in the same way you add a room onto your home. It was an addition to the existing structure.

Our leadership team approached it differently.

We determined that digital technology would essentially change our entire home and that we would best position ourselves for the future if we (metaphorically) re-engineered the heating, electrical, and plumbing of the entire structure.

Taking the long view, we made the assumption (thankfully, a correct one) over a quarter of a century ago that digital technology enabled the “re-invention” of our core culture and the restructuring of all operations — advertising, production, newsroom, etc.

We dubbed the process zero-base information engineering and dedicated the entire organisation to rethinking the way we acquired, aggregated, and disseminated content. We prioritised the creation of first-generation content in digital form and the immediate conversion of any physically aggregated text, graphics, etc., to digital form.

When we ultimately launched an Internet presence in 1994, we were so well situated to successfully support and sustain it that it required the addition of only a half dozen or so employees. Meanwhile, most other comparable news organisations that had not found it necessary to add five to 10 times the staffing to achieve comparable or even less successful outcomes.

Well it is not 1992. It is 2016, and yet the same zero-base approach is applicable to those trying to solve the riddle of print advertising revenue declines that are not matched by digital advertising revenue growth.

We all know that businesses large and small are investing heavily in marketing and promotion. In fact, marketing expenditures have grown rather than declined.

What has changed? Where did our cheese get moved to? The answer is simple. Ask your customers! They have the answers.

If you engage in this exercise, you will recognise that simply giving your sales team a wider array of tools to sell will not/has not resolved the problem of revenue growth.

When you do ask your customers, you will find that their needs today will not be met by a product sales-oriented organisation. You will also find that, for the most part, they could care less how big your Web/mobile audience is and how many impressions you can sell them.

They are far less interested in advertising opportunities and far more interested in marketing partners and solutions that help them develop, support, and sustain their own marketing and communications infrastructure (Web/mobile sites, social media, text and video content generation, SEO/SEM, etc.).

In short, they are less interested in hearing about your success and — surprise! — much more interested in their own.

So, start from the ground up. Zero-base analyse your revenue departments and re-engineer your team, skill sets, and culture to meet the needs of the marketplace.

Before I close, let me revisit one idea: Ask your customer! It is a good idea, but if you are a typical media organisation, your customer base is a pitifully small fraction of the businesses in your market.

Few media organisations have discovered what ad agencies, marketing firms, and Web/tech hosting organisations learned a long time ago. The traditional retail and classified media customer base is the tip of the iceberg. You may find that there is more growth and eventually more absolute revenue potential among the businesses you do not have as customers.

About Bob Provost

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