Wednesday, July 18, 2012

Are newspaper brands back? Report from Spain

Rosalia Lloret: People are searching for credible
sources amid an avalanche of information.
Versión en español aquí.

El País is widening its lead as the No. 1 newspaper website in Spain with 7.6 million unique users in June (for comparison, the number is 74 million for the New York Times).

At the same time the newspaper's corporate parent, Prisa, is struggling financially and faced a one-day strike over 200 layoffs at its radio affiliate and employee anger over cuts at its financial daily.

Despite the bad financial news, Prisa's chief digital officer, Rosalía Lloret believes there are signs that El País is strengthening its brand. She made her comments during the recent summer course of la Universidad Complutense de Madrid in El Escorial.

Two-thirds choose the brand

Lloret noted that more than half of the users of El País and its affiliated websites come directly to the site, either by typing in the web address or from a bookmark. That is, they are coming intentionally, not by chance.

When you include those who search for the name of El País or one of its affiliates, two-thirds of the visitors are coming to the sites intentionally. And El País is not the only strong traditional brand. Of the top 15 sites for news in Spain, 11 are old media. Lloret commented:
People continue placing a high value on that credibility, that extra authority that the major media provide. At a time when we are inundated with information and when we have less time on hour hands, we value enormously this ability of the major media to be gatekeepers, to select the most important news, to help us decide what's important. 
At first glance, it would appear that Lloret has an encouraging story to tell. But a 2011 study by Nielsen of how people get to the top 25 news websites in the U.S. indicated that 60-65% came directly, not as many as the 67% to El País, but almost. And of the 11 print media in the U.S. group, all but the Wall Street Journal are suffering financially. So branding alone may not be enough.

Return to authority? 

This argument of Lloret´s -- that major media and journalists are authorities and have more credibility -- reassured newspaper publishers 10 years ago but has been discredited more recently as those media have lost readers and advertisers.

But El País still bears watching. Under the leadership of Gumersindo Lafuente, digital adviser to the editor of El País, the news organization has been adopting a host of strategies to reinforce its brand and attract loyal readers, not just impressive totals of visitors and page views.

The watchword in the newsroom is "digital first", meaning publish news first on the web. Its internal social network, Eskup, has 150,000 registered users who can interact directly with the journalists and director. These users are enthusiastic repeat visitors.

The main Twitter account of El País has 1.6 million followers. Journalists are encouraged to interact with readers in social networks, Lloret said, because readers who feel connected will become loyal followers of particular bylines.

Monetizing the loyalty

It is these loyal readers who are the best candidates to be monetized. They are the ones who are most likely to respond to a subscription offer, patronize advertisers, take action on an ad (filling out a survey) or buy a product. So far, Lloret admitted, this loyalty isn't reflected in the revenues.

Brands are still important to advertisers, even on the web. While portals and search engines like Yahoo and Google can deliver ad impressions by the ton, Lloret said, many advertisers prefer to have their messages appear in the context of a trusted medium that a news brand can provide.

Lloret is making an argument -- sell the magic of the brand -- that has worked for traditional media in the past. It depends on making the case that the total number of people exposed to an ad is not as important as the attitude or mindset of the person viewing the ad -- the context in which the ad appears. In other words, a business-to-business ad should be delivered to a decision maker when he or she is reading about business, not booking a vacation.

Not there yet

The challenge that the big media still have is transforming their audience and trusted brands into a business that can support the high-quality journalism. El País has some 400 journalists on staff. At the moment, its digital operations are providing only 18% of the ad revenue. Spain's economic crisis -- unemployment is well over 20% -- has exaggerated the financial impact of internet competition.

El País will have to grow digital revenues at a much faster pace. Easier said than done. It is the same problem facing the news media in the U.S. It is not enough to have a great product. There has to be a great financial strategy to support it.

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