Bloomberg.com published an interesting article last Friday that highlights just how competitive it's getting in the newspaper world as newspapers struggle to not only survive the woes of their industry, but struggle to survive a tough economic environment.
As Bloomberg.com's Sarah Rabil details, Saks recently chose the Wall Street Journal to promote its new Chanel boutique and a new line of men's suits.
This was noteworthy because Saks has advertised in the New York Times since 1924. But as the Wall Street Journal under Rupert Murdoch's control has implemented editorial changes that have increased the newspaper's appeal to more mainstream, affluent readers, The Wall Street Journal is on the radar of advertisers who may have previously overlooked it, including Saks.
According to Milton Pedraza of the Luxury Institute:
"They [The Wall Street Journal's publications] certainly have become a significant part of the advertising mix for luxury brands where they were not before. They're definitely stealing advertising dollars."
Behind the scenes, there's a battle raging between top newspapers like The Wall Street Journal and The New York Times.
Executives are keeping a close eye on the competition and trying to outmaneuver each other to capture more of what is largely a shrinking pie. From expanding coverage into new areas that will attract valuable readers to slashing prices, revenue and the bottom line are top of mind more than they probably ever have been.
As I read the Bloomberg.com article, I couldn't help but wonder if we might see a similar dynamic develop amongst online publishers.
To be sure, there are some significant differences between the newspaper market and the internet publishing market in general.
There's far more competition, the barriers to entry are far lower and there's a different advertiser-publisher relationship in most cases.
That said, the economy is likely to pressure all ad budgets heading into 2009 and despite the fact that there's more competition on the internet, the biggest chunk of ad dollars flows to a relatively small number of online publishers.
As such, it seems possible that the battle between the New York Times and Wall Street Journal could very well be played out amongst top online publishers if conditions deteriorate enough.
Whether or not an online battle looks anything like the battle in the newspaper market, I think there are some things online publishers should be focusing on more than ever to maintain and increase their competitiveness.
Consolidate and cut. As Nick Denton recently pointed out, now is the time to focus on top performing properties, consolidate where appropriate and cut underperforming properties.
Sometimes this is difficult.
Earlier this year, one of my companies decided to shutter one of its properties – a foreign language website that generated several million pageviews each month. On paper, it was one of our best properties but it wasn’t profitable and was diverting resources from our profitable performers.
Looking back at the tough decision to ditch the website, it turned out to be right – the country where the bulk of the property’s users originated is basically in economic meltdown.
Focus. As I see it, online publishers with focused properties that appeal to endemic advertisers will likely fare better than online publishers with less focused properties that aren't as compelling a buy for advertisers.
Of course, the truth is that focusing on the right markets is just as important as focusing. Some markets will fare far better than others. I would be a little uncomfortable right now if my endemic advertisers were financial firms and auto companies. These advertisers aren't going to stop spending, of course, but focusing on markets that have held up better might provide for better sleep.
Know thy audience. In my own experience, selling is getting tougher. Advertisers are being more selective. The better you know the characteristics of your audience, the easier it will be to identify and effectively hit the right advertisers with a compelling pitch.
- Invest strategically. Just as the Wall Street Journal seems to have invested in an expansion that is producing growth and giving it the opportunity to steal advertisers from the New York Times, there's lots of opportunity for strong players to invest strategically in areas that will enable them to take advantage of weaker players.
At the end of the day, the Wall Street Journal and New York Times highlight the reality of corporate evolution.
Faced with industry-specific challenges and macroeconomic challenges, the desire to survive and thrive is driving these companies to aggressively fight for their interests in a fashion that we didn't really see when the supply of food (read: ad dollars) was more plentiful.
Whether or not online publishers are forced to battle it out in a fashion similar to the the New York Times and Wall Street Journal remains to be seen but smart online publishers would be wise to remember that it's survival of the fittest in every market.