If you are a local news organization feeling challenged to chart a course of transformation that results in sustainability, you are not alone!
That was my biggest takeaway after attending and speaking at WAN-IFRA Latin America.
The challenges — and the pathways forward for sustainability — for news organizations in the U.S. are not as unique as we might think. It was reassuring to see, over the course of several presentations by leading news outlets in Latin America, that both our challenges and our opportunities align. On a personal note, I also appreciated that, when it comes to sustainability strategies, my mediocre Spanish was no barrier to understanding the charts and graphs!
Here are a few lessons that stood out.
Digital subscriptions alone aren’t likely enough to sustain publishers. Except for a few players (such as The New York Times), this revenue stream is better thought of as part of a multipronged revenue strategy, with the key being to engage in data-driven experiments to optimize both price and gating/paywall.
Newsletters are an essential part of an overall sustainability strategy. And their role has evolved, from being generally automated and viewed primarily as a “funnel” tool for driving clicks and referral traffic, to a destination product with its own voice and monetization strategy, and an essential entry point in the “funnel” to gain first-party data relationships.
Newsletters also complement the overriding truth driving essential transformation in publishing: Third party cookies may not be gone yet, but it’s essential for news organizations to pivot their revenue strategies away from dependency on cookie-powered ad revenue, toward developing strong first-party data relationships with their audiences. These directly owned relationships are essential to the future sustainability of news organizations.
Analytics and data warehouse
In this world of first-party data, publishers must be much more data-driven and “data-capable” in all phases of the business, from the top-of-funnel acquisition strategies (and the ability to test, track and measure ROI of different strategies) to “data warehouse” capabilities that enable mid- and bottom-of-funnel optimization and monetization. Successful publishers will be able to both calculate, track and compare Cost of Acquisition as well as Lifetime Value of a User.
Publishers who have previously collected some user data (e.g., via contests, newsletter or subscriptions) tend to lack any integration of these datasets. The ability to access and act on this data “holistically” will be a competitive advantage and path to sustainability going forward.
Multiple revenue streams
There is no one “silver bullet” for sustainability. Research from FT Strategies was shared at the conference that found that the most “sustainable” revenue mix for a news organization going forward would include three or four different, independent revenue streams.
Philanthropy as pillar for sustainability
With that context in mind, on behalf of Local Media Association, I presented to WAN-IFRA LATAM the results from our two-year-old LMA Lab for Journalism Funding. For LMA itself, and for the U.S. publishing sector, philanthropy has emerged as an undeniable third or fourth pillar in any holistic approach to local news sustainability.
The LMA funding lab, made possible with continued support from Google News Initiative, has trained 55 local newsrooms in philanthropic funding strategies (with a new cohort of 15 more news outlets launched in October). Those 55 newsrooms have raised more than $11 million in funding for essential local reporting projects during the past two years.
Liz White, publisher of the Record-Journal (Meriden, Connecticut), joined me on the philanthropy panel and shared how her newsroom has raised more than $600,000 to create its Latino Communities Reporting Lab, including hiring a team of six bilingual reporters to better serve that part of their community.
The Record-Journal and other successful participants in the Lab for Journalism Funding all did five things right. They:
- Focused their reporting on an essential community need, and grounded the project in community listening
- Sought out and forged community partnerships
- Developed a powerful plan for how to use journalism to address the issue
- Drew on and told their own story of how their past reporting had served the community
- Focused their plans on impact and outcomes, rather than story counts and reporters hired
Our industry report, Pathways to Philanthropy, details each of the best practices any local newsroom — nonprofit or for-profit — can follow to support critical local reporting.
U.S. publishers worried about the path forward should take confidence from these discussions at WAN-IFRA Latin America, knowing that they are not alone in the challenges they face, and that the strategies for sustainability are not bound by borders.