You can’t manage what you don’t understand. Words of wisdom from an investment banker who describes a digital shortcoming of many TV, Radio & Newspaper executives.
You can train the sales team all day long and force-feed webinars & expensive research til the cows come home. You can hire sales consultants to hard-sell your clients who will quickly churn and cancel. But until top management thoroughly understands online business models…their local news sites will continue to bleed red ink. (see: LasVegasSun.com & TBD.com) Groupon, Patch and other hyper local sites will keep on eating their lunch.
OK with 15 years of running local websites at a loss? You try to keep up with your business in regards to content, operations, sales and marketing. In theory, you could jump into any job and perform with confidence. At the very least, you’d know if your employees were performing those duties correctly. Can you say the same thing about your digital operations?
Salaried employee responsible for digital profit. WTF?
Hiring a dot com exec or a geeky journalist sounds good on paper. Maybe you’ll get lot’s of page views and user engagement. But what about return on investment? After you account for each line item within an interactive P&L, you’ll likely find that even though revenue & page views are up, you’re still operating at a loss. Here’s why:
- You put 100% salaried execs (no financial skin in game) in charge of digital
- You think they’re doing everything they can to succeed, but you’re not sure
- You don’t keep up with digital best practices for revenue & profit
If owners really understood Internet competition, they’d make sure a substantial portion of that person’s compensation was based on profit (not revenue or page views). That’s just business 101. Think about someone who receives the same weekly paycheck whether business is up or down. Think there’s motivation to kick it up a notch when business is slow?
Watch this short video that exposes the critical oversight made by most local media companies: profit is not top priority.
Delegating digital strategy is recipe for financial disaster, yet many CEO’s, owners and top managers do just that. Keeping your fingers crossed and hoping the editor or news director builds a profitable website is no way to impress the stockholders. How do you really know what your digital manager is saying….is accurate or relevant?
We have 55,000 Facebook fans.
Ever hear that one from the newsroom or management team? When you do, feel free to congratulate them on the accomplishment. Then watch them cringe when you ask for their plan to monetize those ‘friends’.
Our research shows that over 75% of those in control of local websites, have content / technology based background, but no direct sales or local business development skills.
NEWS FLASH: Sales & business management must play primary role with digital, just as it does with traditional broadcast and print.
It’s a fact: newspaper publishers and broadcast general managers are ultimately responsible for hitting profit margins. Even if ratings or readership is strong, if they miss their numbers they get shown the door. Yes it’s brutal, but it makes good business sense. Too bad we don’t apply this proven business practice to our online operations.
Q: Who should run your website?
A: Person that has most of their compensation tied to digital profitability.