Fans, followers and finding value in social media [part one]

The University of Lancashire’s School of Journalism and Digital Communication has published the groundbreaking World Newsmedia Innovation Study for the past four years. This year’s Journalism Leadership INSIGHT report draws on research conducted by the authors while completing the Master of Arts in Journalism Leadership at the University. Business Day’s Steve Matthewson was one of the those who attended. This is part one of his report, Fans, followers and finding value: an exploratory study of the contribution made by social media to organisational strategy in traditional media firms.

Many recent studies confirm the widespread adoption of social The Financial Times (FT) and The Guardian have made choices in media across most traditional media organisations, driven by the view that such tools offer a wide range of potential benefits or certainly that media companies are compelled to follow their audiences there.

Respondents in the 2011 World Newsmedia Network Innovation Study were asked which platforms could be opportunities for their organisations in the next five years. Social media emerged as the single most important issue, ahead even of investigations into payment models for digital media, which have become a central preoccupation of many magazines, newspapers and websites around the world.

However, some commentators question the value of these technologies to media firms. American media academic Robert Picard, for instance, suggests that in an era when the business models for news are stressed, questions must be asked about which of the new technologies are beneficial for the business of journalism. Frederic Filloux claims social media efforts at media companies, along with many other digital activities, have little economic value and bring “very little money if any”.

The implication appears to be that efforts and investment around social media, which may appear to offer some kind of immediate operational benefit, are not sustainable in the long term if they do not fit in with a longer term strategic programme. The study referred to in this article looked at the adoption of these tools by two British media firms. It sought to understand the way in which various social media tools are serving those companies’ strategies by looking at the problem through the people responsible for making, interpreting and executing strategy.

Profits

One of the objectives of the study was to understand how the use of social media in the firm contributed to the firm’s ability to deliver value to all its stakeholders. This assessment was based on the notion put forward by Picard that the crisis faced by media firms is to some extent the result of the company-centric approach that has dominated most media firms in what he calls the corporate age5 and in which a shiFT in emphasis to high profits and asset growth has seen a corresponding decline in value for audiences, society and journalists. He blames this shiFT for a fall-off in the use of news, a decline in advertising, dissatisfaction among journalists and societal criticism of the performance of news organisations. Picard instead argues for an approach that emphasises the importance of a strategy that supplies long-term benefits for journalists, their audiences, investors, advertisers and society as a whole.

Speed

In his rubric, Picard also points to some of the typical strategic responses that firms mount in an attempt to create value and, sometimes, to distinguish themselves from one another. These include increasing the volume of news they provide, accelerating the speed of news-gathering and distribution, and the distance over which they deliver it. The degree to which certain content is exclusive and specialist, as well as the acts of providing content across platforms and repurposing existing content, also feature in his description.

The Financial Times (FT) and The Guardian have made choices in dealing with the disruptive effects of technology, shiFTing reader behaviour, and challenges to traditional print-based business models.

The FT has developed a sophisticated content-based business model premised on unique and quality journalism aimed at the global business market, and that has seen it move decisively away from a reliance on advertising to a point where content revenues in print and online now exceed those from advertising.

Advertising

The Guardian publishes across multiple digital platforms and has ambitions of becoming a global brand, which is a key part of its current strategy. Its main website is the third biggest news site in the world and although it charges readers for its print and iPad editions, The Guardian’s business model, particularly on the digital side, depends heavily on advertising.

The findings of the study might offer some insight into social media’s functional value in different strategic contexts.

The interviews were conducted in mid-2012 with three senior members of staff at both the FT and The Guardian. The researcher sought out individuals who contributed to the development of strategy at an executive level, others based on their involvement in managing the firm’s social media efforts and others in senior operational positions in editorial.

These interviews revealed patterns around how both firms devised strategy, how they allocated resources to social media in line with that strategy and how social media use supported their overall organisational strategy.

For the purposes of this report and where they are quoted, the interviewees are identified in the text, in brackets, as follows:

M-FT – Executive Manager Financial Times

M-GD – Executive Manager Guardian
E-FT – Editorial Manager Financial Times

E-GD – Editorial Manager Guardian

S-FT – Social Manager Financial Times

S-GD – Social Manager Guardian

Social media and strategic decision-making

For both organisations, use of social media and allocation of associated resources is high level strategic matter. Both firms have different approaches to strategy and that seems to be reflected in their approach to social media. At the FT, strategy is perceived as an explicit, centrally managed and detailed set of intentions expressed by senior executives, and equally the management of social media is experienced as a highly planned activity with specific, measurable outcomes.

The Guardian, however, is more experimental. Staff are described as “almost fervent in their desire to try the new” [S-GD] and “opportunistic” [M-GD]. The Guardian’s popular Facebook application arose not as a planned initiative but because Facebook Incorporated approached the media company and asked them to trial the concept.

By contrast, the FT is “not the kind of organisation that will just leap on something because it the latest new and hip thing” [S-FT]. Another interviewee [E-FT] said: “If I had to put a date on it I think experimentation died last year.”

Strategy

Superficially, The Guardian’s investment in resources dedicated to social media seems to be the more significant of the two firms, if the sheer number of people who are exclusively dedicated to these activities alone is a measure of these activities’ importance in the execution of strategy.

It is worth noting that both firms have staff whose role includes assisting journalists in using social media in a proactive way, around specific editorial requirements that are seen to benefit the business, rather than merely policing such usage.

The arrangement of resources at the different operations reflects their broad strategic focus. At the FT, resources are spread across the three areas of editorial, product, and marketing/communication, with an emphasis on coordination between them. At The Guardian, there is a much heavier concentration of specialist social media resources in the editorial area, which could reflect the fact that its strategy in general is very editorially-led.

Management

The interviews suggested that The Guardian puts a lot of emphasis on how social media helps meet its editorial goals (including the character of the content and the social role of its newspaper and website) while the FT interviewees repeatedly returned to the commercial goals.

At the FT, a multidisciplinary social media co-ordinating team, incorporating editorial and commercial representatives, reports directly to the FT Board. This potentially speaks to the extent to which these activities are regarded as strategic. Members of this team indicated they have the room to choose what they do on social media providing they have buy-in from senior management and the Board.
The implications of having traditionally separate editorial and commercial social media activities fairly closely aligned might be worth exploring further in terms how this may benefit a media firm

The evolving functions of social media

A variety of social media tools perform many functions at both firms across editorial and commercial departments, and in many instances directly and indirectly fulfil organisational strategy. Promoting content on social media in order to increase the number of users remains important for both firms and is achieved usually by linking back to articles on proprietary digital platforms. However, the underlying strategies suggested a broader, more complex range of functions.

At The Guardian, while its current strategy depends largely on advertising revenue and the volume of page-views that social media helps drive, social media was regarded at least as important for helping the organisation fulfil its strategic intent to work in a collaborative way with its readers.

Unique

Thus it has a prominent engagement and interaction function that feeds back into the content itself, improving the quality, which in turn should retain those readers and attract more. This function sits alongside the use of social media for sourcing content, using it to generate leads for stories and to identify and contact sources, all of which The Guardian does to create unique content.

“Our overall commercial strategy is one in which we grow and we deepen the kind of engagement people have with us and then we retain that core of deepened kind of engaged readers and social media can help do that.” [E-GD]

Engagement

Although the FT talks about using social media in the context of engagement and does use it to contact sources and to scan the environment, its strategy is founded on the idea that its journalists and contributors offer high-level readers an expert interpretation of global events. Therefore, editorially, it deliberately appears to limit its interaction with readers to certain contexts. While it sees social media as a tool for sharing its content and is anxious to encourage a high degree of sharing and discussion among readers, it does not see itself as major part of that conversation. As such, its social media efforts are very content-focussed, largely using it as a tool to promote its content and emphasise its “unique” character.

Collaboration

Another function that emerged, if not strongly, then certainly as a growing consideration, is that of social media as a standalone publishing tool. For a media firm, this is a profound departure from the use of a social platform as a point of contact which links to a proprietary digital product. It is being considered in very different terms by the FT and The Guardian.

For the former it is a means to advance its content monetization strategy, while for the latter it is a means to promote engagement in a strategy that embraces collaboration and sharing. For The Guardian, developing and using a content application inside Facebook as a way of reaching more people in a more profound way, is miles away, strategically, from the FT’s view that it would potentially allow paying subscribers to consume the organisation’s entire editorial output inside a Facebook application merely as a matter of user convenience, and only if it could find a mechanism to verify users against its own subscription database [M-FT]. Ultimately, however, either decision has important ramifications for the firm, given the importance of technology choice and its perceived contribution to a firm’s overall strategic posture10.

Social media is also employed in a number of ways that relate to the building of the firms’ brands, which suggests it has a role beyond merely promoting content and driving traffic. Social media appears to help support new sources of revenue, by promoting content or products outside the core products, but which in turn are brand extensions that rely on the reputation of those core products.

In the case of the FT, in particular, this ultimately supports a key part of its current strategy, which is to move further away from a reliance on advertising and generate the greater part of its revenue from content monetisation.

Social media are not sales tools as such for the FT. But they are the platforms of first contact that lead to an engagement funnel that may, ultimately, lead to a sale. The FT interviewees revealed that users who come to it via social media are, statistically, the most likely to pay for a subscription.

Steve Matthewson is managing editor of news at BDlive. 

This post was first published in the Journalism Leadership INSIGHT report edited by Francois Nel, director of the Journalism Leaders Programme at the School of Journalism and Digital Communication, University of Central Lancashire. It is republished here, in two parts, with the permission of Nel and the author.