When Brian Tierney appeared as a presenter at INMA World Congress in 2008 as president and CEO of Philadelphia Media Holdings, he was riding high on a string of successes. Tierney and a group of investors bought the Philadelphia Daily News and the Philadelphia Inquirer in 2005 for US$562 million, and had implemented major innovations in marketing, sales and content.
Things took a steep dive in early 2009 when the company filed for bankruptcy, caught in the riptide of the newspaper industry downturn. The newspapers were sold in late 2010 for US$139 million.
So when Tierney appeared at 2011 World Congress in New York, this time it was as CEO of the marketing firm Realtime Media. He willingly shared what he had learned from the Philadelphia debacle by starting with a twist on an old joke: “What's a great way to make a small fortune? Invest a large fortune in a newspaper in 2005.”
After providing some brief background about the history of the sale and the bankruptcy, Tierney got right into the “lessons learned.”
Lesson 1: Heavy debt is a bad thing. Tierney said the turmoil surrounding his newspapers was reflective of the economy in general, where huge amounts of debt were poison for businesses and for individuals. “It was a bad time to buy,” he said, especially given the rise of media outlets like the Huffington Post that were a major obstacle for newspapers.
In retrospect, Tierney said, given the ultimate sales price at bankruptcy, he wouldn't have made the deal even if he could have paid less. It still would have been a money-loser.
Lesson 2: Product rules. Tierney pointed out that the newspapers made major professional strides during his time at the helm. “We carved $120 million out of our cost structure,” he said, “but at the same time we won the Pulitzer Prize for investigative journalism. So quality definitely counts.”
Lesson 3: If you don't invest in marketing, you'll never turn it around. “One of the first things we have to remember is that we have to invest in marketing,” he said. During his group's ownership, the newspapers were known for fun, quirky marketing campaigns through the MediaLab initiative. Tierney cited a famous example: when the newspapers' circulation actually increased, they trumpeted the news with a marketing theme built around “When Pigs Fly.”
“We wanted to win Pulitzers, but have fun,” he said. “Everybody knew about the quality journalism, but the fact that you could put a smile on faces did creative things. You have to let your imagination run free.”
They also became known for approaching advertising clients with equally creative approaches, such as 3-D advertising, or a “virtual rally towel” for sporting events.
To build revenue and maximise marketing opportunities for clients, he said, “you have to sell an idea. That's what clients want to do, and it's a different conversation when you go in with an idea.”
He also stressed his belief in the importance for newspaper companies to build strong local relationships with audience and community. During his time in Philadelphia, he said, the newspapers paid particular attention to building relationships with local non-profit organisations, getting involved in local citizenship awards, building branding in high schools, and so on.
“You have to get out and about,” he said. “Meet people, and make sure that people understand your role in the community.” As an unexpected benefit of that approach, he noted, the company received more than 15,000 letters of support during its financial difficulties.
In another piece of advice for newspapers today, he said, “leverage your advantages while you still have them.” For example, he said, the biggest payoff from paywall content isn't the revenue, but rather in mining “the treasure of data that will come from the paywall, and offering it to advertisers.”
So, financial pitfalls notwithstanding, would Tierney do it all over again? Absolutely. “I really would do it again,” he said. “The experience of doing what I did, with the people that I did it with, was the experience of a lifetime.”