Use the Transparency of the Digital Platform to Understand Customer Demand

 
 
By Mike Azzara  |  Posted 2009-05-05
 
 
 

Five Rules for the Digital Transition


Many of the member companies of the American Business Media association are living through the transition from print to digital media. During his keynote presentation at the association's meeting this week in Amelia Island, Fla., Jason Young, CEO of Ziff Davis Media, imparted five high-level rules to the group for surviving such a transition. Young started his keynote presentation by showing his pre-transition, youthful photo from 2001 and then showed his current headshot-to widespread laughter and spontaneous applause. Then he jumped directly into his "operating rules."

Rule No. 1: Set a realistic timeline on demand expectations

"We constantly underestimated the speed with which print would decline," Young said. "We also underestimated the growth potential of the digital business."

He then offered the assembled B2B media CEOs a formula for calculating print decline:

"Whatever projection you have for print, in terms of its rate of decline, increase that by 50 percent, take a deep breath ... and then double it."

Rule No. 2: Manage the print business for cash and the digital business for growth

"You have to align your resource allocation to where the opportunity lives," Young said. "You have an obligation to provide a quality product in print, but you have to use every penny of available capital to feed into your digital business to make it grow faster."

He explained that, as the difference between what media readers consume and where marketers spend their budgets shrinks, billions of dollars will shift to digital revenue. That's the opportunity-period.

Rule No. 3: Ensure you have the right digital leaders and that they are empowered to succeed

Young said the digital business is different, and requires different skills than the print business across all departments-content, audience marketing, sales. Further, "early stage digital businesses must be separated as independent businesses, empowered to do what's right for that business itself."

Later in the transition process, they must be reintegrated-and the digital leaders must gain control of the newly combined brand platform.

"That's not easy-you'll have to displace the brand experts of several decades. But if you want to ensure the survival of the brand for the long term, you have to put in charge the people who are experts on where the future of your brand platform is headed."

Ziff Davis separated its digital business in 2001, and reintegrated in 2006, he said.

Use the Transparency of the Digital Platform to Understand Customer Demand


  

Rule No. 4: Use the transparency of the digital platform to understand customer demand

"Digital gives you incredible transparency into exactly what customers want, why they come to you, where they come from, why they stay. You need to understand this, and leverage the data to better align your resources to make sure you are creating a product that is positioned for growth on the audience side, and then use the data to figure out how to monetize that product."

Young explained how such a deep dive into Web site performance data "allowed us to understand that a disproportionate amount of revenue was flowing through one type of content, product reviews, and even specific categories of reviews. That knowledge allowed us to reallocate resources to add to that opportunity. So it is a constant optimization process."

Rule No. 5: Understand there is a constant evolution of business models inherent in digital media

"Unlike print, digital reinvents itself constantly. You need to be constantly in tune with new models that are emerging, and old models that are dying. It's scary to say a model that has been around for only two years is old and obsolete, but that is happening. Now, Kindle is showing is that there is, in fact, a community of digital readers who are willing to pay for content. The fastest growing category of subscriptions on the Kindle is subscriptions to blogs. How crazy is that? Blogs, which in their prior existence have never been paid for, are being paid for on Kindle."

In closing, Young acknowledged that Ziff Davis Media "is a smaller economic proposition than we had in 2001, but it is profitable, it touches more readers, and we see a path to future growth. And I have less hair, it's true, but I'm here, and I can tell you there is a path to the other side. Timing is the difference between life and death. It's a race to achieve enough digital scale to preserve the brand platform. But unlimited opportunity awaits the great brands in the digital world."

Mike Azzara is a longtime B2B media executive covering the high-technology industry, now Chief Content Strategist for Kilter, the branded content marketing arm of Stein Rogan + Partners. Mike also advises media software startup mSpoke, and tries his best to consult with media companies beginning to deal with Internet effects he's already lived through-but they insist on making the same mistakes on their own. He can be reached at mike@azzara.com.

 


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