Katherine Bell, editor-in-chief at Quartz, a global business news site, has had extensive experience in the digital transformation of media organizations as editor-in-chief of Barron’s and, before that, as an editor at Harvard Business Review’s HRB.org. She is clearly passionate about—and well-studied in—the topic of digital transformation, as she shared with a room full of eager Booth students* in a talk organized by the Kilts Center for Marketing. The Kilts Speaker Series, which is free for all Boothies, brings in industry leaders to share their experiences or expertise. It is one of my favorite ways to pass the lunch hour between morning and afternoon class at Booth because I never know what lessons they’ll share or nuggets of wisdom I’ll take away.
My key takeaways from Katherine’s presentation were the examples she presented of media companies who have done an exceptional job riding the wave of digital transformation. As she described it, newspapers used to have two key sources of revenue: advertising and paying readers. Newspapers and magazines were a cheap alternative to television advertising for companies that wanted to reach as many customers as possible. Of course, online ads now allow advertisers to reach more customers than ever, so they no longer rely on newspapers, magazines, and other print media. Meanwhile, ad tech allows for very specific consumer targeting so the reach of your ad doesn’t have to be so broad. Even though newspapers now publish content online, there are so many other new sources of content competing for customers’ attention and entertainment. As Katherine explained, newspapers couldn’t simply “copy what they were doing in print onto the web and hope for the best.”
One company Katherine admires for how they have overcome this modern difficulty is Buzzfeed. Buzzfeed has a respectable news team, but they also publish amusing listicles and “Tasty” food videos that get readers sharing. Modern media companies need to understand that people value connections with each other over content, according to Katherine. She says that Buzzfeed respects its readers’ attention by juxtaposing serious news with entertainment, and this understanding is a unique value-add that can attract advertisers.
The second source of revenue was from paying readers. But newspapers were a bundle: Some people bought them for sports coverage, some for the comics, and many bought them for the classifieds section. News was included in this bundle, but not everyone would have chosen to pay for it. To survive the digital transformation, Katherine says that media companies need to be adaptive, identify adjacent businesses, and diversify their revenue streams. For example, Buzzfeed’s news content may not be profitable, but it is supported by other parts of the site, such as affiliate advertising through the brand “Tasty.”
The company Katherine discussed that illustrates this point is Norwegian newspaper Schibsted. They saw the decline in lucrative classified ads and took action. Understanding the impact of network effects, they aggressively developed an online classifieds site, which today is still the leading online marketplace in Scandinavia. Schibsted “let things break,” as Katherine said, by using breaking news to solve related problems, by not being afraid of cannibalization, and by letting members of their digital team compete for top titles at the company. Katherine recommended the book The Content Trap for more details on Schibsted’s digital transformation.
These were just a few highlights from Katherine’s talk at Booth. I’ll wrap this up with my favorite quote from the event. Katherine said she “learned most in the year [she] made lots of mistakes,” a year spent launching a celebrity chef’s website. She implored us all to “let things break” and to be adaptive in the face of industry transformation.
*This post was written at a time when in-person gatherings were able to safely take place. Chicago Booth is now adhering to safe social distancing guidelines due to COVID-19. You can read more about those practices here.