How much should you be spending on product and tech?
Product Initiative Newsletter Blog | 30 April 2024
Hi there.
I have just landed back in Los Angeles after an incredible week at our World Congress in London where I had the pleasure of moderating the big stage as well as running an in-depth workshop on Product and Tech organisation.
It is easy to underestimate the energy of such in-person events and what a pleasure it was to be able to connect with some of you in real life. Thank you for all the inspiration. I’m still digesting everything I heard and will do a full debrief soon.
In the meantime, there is one important question I want to ask based on some data I saw last week: Are we spending enough on product and tech?
If you attended the Congress, please let me know your takeaways. I’m at Jodie.hopperton@INMA.org. I’ll summarise these and my own takeaways in my next newsletter.
Thanks, Jodie
Are you spending enough on product and tech?
If it’s less that 20%, you have some work to do.
TL;DR: Great content can be a differentiator, as can an excellent product. To thrive, you need both. The top-performing companies invest wisely in content as well as product and tech.
We surveyed participants of the INMA World Congress, and the results are particularly interesting for product and tech leaders.
When we look at the top areas of internal investment, it’s changed between 2023 and 2024. Product is now the largest area of internal investment, which was not the case last year as you can see below.
We also asked about the top three long term worries of the c-suite. Financial performance + innovation and tech adoption are the top two concerns (as shown below).
So here is some good news. I think.
The News Sustainability Survey, run by Google, FT Strategies, and INMA last year, found there was a correlation between spending on product + tech and financial performance. Yes, if you invest in creating excellent distribution for your content, your financial performance is likely to increase.
What’s the magic number? This research showed the top-performing media companies spent more on product and tech, 24% of total spend vs. 18% for others — as per the graph below.
You may also note a smaller percentage spend on editorial. This does not mean moving resources from newsroom to product will make you successful*. There are a couple of key points to note:
Having excellent, unique content is essential to the business. Companies that have slashed editorial costs have not performed well. The companies that have performed exceptionally well are efficient in the newsroom, spending on unique, differentiating content that is valuable to their community.
There is a sizeable difference in spend on product and technology in the companies that performed better overall. This is in line with what we see in this initiative.
Overall, we can conclude content is king, but only when coupled with decent, smart investing in product and tech to be able to deliver that content to the consumer in the best way possible. And this is on the c-suites mind right now. This is the time to take action. Invest wisely to maximise product led growth.
*Also, as noted in the sustainability report, this does not reflect local and hyper local news media organisations.
What about R&D?
When I posted something about the breakdown of spend for media companies on the product and tech initiative Slack, Styli Charalambous, co-founder and CEO of the Daily Maverick, added this: Another interesting (possibly linked) allocation question is how much we spend on R&D. This is from NYT financials — clear correlation between revenue growth and R&D spend.
This is, of course, highly interesting and that correlation would be hard to dispute. But we also can’t all be The New York Times. Research is core to growth, and we each need to understand our current and potential audiences to deliver the best quality to them.
One thing I continue to be grateful for is the level of sharing within the INMA membership — crystalised at the Congress last week. While we each learn and share, perhaps that R&D spend becomes more of an industry collective. We shall certainly try.
About this newsletter
Today’s newsletter is written by Jodie Hopperton, based in Los Angeles and lead for the INMA Product and Tech Initiative. Jodie will share research, case studies, and thought leadership on the topic of global news media product.
This newsletter is a public face of the Product and Tech Initiative by INMA, outlined here. E-mail Jodie at jodie.hopperton@inma.org with thoughts, suggestions, and questions. Sign up to our Slack channel.