Organizational Development: Organize For Tomorrow’s Success Moderator: Howard Roth, Ascend Media Panel: Peter Goldstone, Hanley Wood Business Media Chuck

Organizational Development: Organize For Tomorrow’s

SuccessModerator: Howard Roth, Ascend Media

Panel:

Peter Goldstone, Hanley Wood Business Media

Chuck Richard, Outsell, Inc.

Toni Nevitt, Nielsen Business Media

2© 2007 Outsell, Inc. All rights reserved.

Digital Velocity, New York

March 28, 2007

CREATING THEE-MEDIA ORGANIZATION

Chuck Richard, VP & Lead AnalystOutsell, Inc.


Agenda

The Study

The Set Up

Four Organizational Structures

Wisdom of Crowds (of CEO’s)

New Functions, Roles

Essential Actions

© 2006 Outsell, Inc. All rights reserved.


The Study

Outsell, Inc: Chuck Richard

New Coordinates, LLC: Cara Erickson

August 2006

18 executive interviews, anonymous

Quotes tell it straight, but not ascribed

Insightful, battle-tested and free-wheeling

Analysis and take-aways


The Set-Up

Source: Outsell, Inc.

“What I don’t know yet is whether any of us will find [new] business models as profitable as we want them to be.”

“The equation doesn’t work – traditional revenues don’t come back at the same level when they leave print for online.”

“Online is the growth engine but the dollars are still a long way from print. A dollar that leaves print doesn’t become a dollar online … it comes back as 20 cents.”

“We are in five-alarm fire mode…, and it’s scary!”


Typical Revenue Model to 2015

0

50

100

150

200

250

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Rev

enu

e $

Mill

ion

s

Print Digital In Person Total

50% Print

36% Digital

14% Events

82% Print

8% Digital10% Events

3.9% 3.4% 1.4% (0.4%) (1.6%) (2.7%)(0.6%) 1.4% 1.8% 3.2% 4.0%Growth Rate:


Revenue Dip 19% of Total

0

50

100

150

200

250

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Rev

enu

e $

Mill

ion

s

Print Digital In Person Total

10-Year Total Revenue at 4% $2.70 billion

10-Year Total Forecast Revenue $2.27 billion

Revenue Dip $428 million

Revenue Dip as Percent of Total 19%

4.0% Growth


Four Organizational Structures

Least Integrated Most Integrated

1. Publisher’s Pureplay 3. Hybrid/Matrix 4. Brand IntegratedSeparate OL P&L Rolled No OL-Only

Resources OL & Print Units Into Brand P&L Only Brand P&L’s Separate P&L’s Reports to 2 Managers

2. CentralizedNo P&L

Expense AllocatedTo Business Units



Four Organizational Structures 1. “Pure Play” 2. Centralized 3. Hybrid/Matrix 4. Brand Integrated

Separate Online Unit

Reports to CEO or Board

Separate P&L

Dedicated Staff and Management

Collaborating with core business as needed

Can nurture separate culture

No Pure P&L

Corporate Group reporting to CEO

Costs Allocated

Drive Strategy from Center

Implement Locally

Incubate new businesses

Brand P&L controls

Some Integration with Dedicated Online Resources

Dual Reporting

Double $ Counting

Variations on this theme

Brand P&L only

Operating execs have power across print and online

Few or no dedicated online roles

11% of sample 11% 61% 17%



1Publisher’s “Pureplay”

Strengths

“My view is that we would never have gotten to where we are today if we weren’t separate."

Challenges

“There’s no single individual who owns the whole brand. I won’t say there’s no tension around this at times.”

“There’s an inherent tension in the structure. On my better days, I think it’s healthy”



2Centralized E-Media Organization

Strengths

“The smaller brands did not have robust Web presence, so we pooled them... The big brands can stand alone on the Web"

Challenges

“Often these structures are unpopular internally – tension between the corporate staff and operating executives arises, and the central group can be perceived as ‘gatekeepers’. ” – Outsell

“You still have print people running the brands.”



3Hybrid / Matrix Integration

Strengths

“We’ve created as much integration across the functions as made sense…You need some key people waking up in the morning just thinking about online … but it’s not as simple as full integration."

Challenges

“What you want is a shrewd, calculated, calibrated coordination. What you don’t want is a mud puddle where people don’t know: Am I supposed to be selling print or online?”

“The jury is still out on fully integrated selling teams, and we anticipate continued experimentation and restructuring will go on for the next two to three years.” -- Outsell



4Brand Integrated

Strengths

“People need to have a huge familiarity with their industries, so they need to be fully responsible for all platforms."

“We don’t isolate the [print and digital] elements by creating special incentives. That creates loopholes and distortions.”



The Wisdom of Crowds (of CEO’s) - 1

“The longer you chase the print dollars, the further behind you get in capturing new online growth rates.”

“Straddlers – executives who have a traditional media background but have spent much of the last five to 10 years in interactive media.”

“Online staffers don’t want to learn print."

On internal promotions: “We’re still promoting people who come in the traditional way and are sucking up knowledge from the online side. They get it. It’s a mindset, not an age.”



The Wisdom of Crowds (of CEO’s) - 2

“Converting print staff to online is very rare. The print staffs now are so thin, and the digital groups work much harder than print, so most print people are not interested in moving over.”

“Some sell e-only. Some sell e-media plus print. None are assigned print only.” Upward mobility requires emedia experience. To want a print-only job in this culture? “That would be declaring yourself a dinosaur.



The Wisdom of Crowds (of CEO’s) -3

“E-media’s role in the organization? Teach, push, cajole, collaborate, consult to print."

“My two predecessors basically ‘lost it’ after three years.”

“In the beginning, surgical strikes were okay. Now you need ground forces, a frontal attack.”

“Old Media is finally taking New Media seriously”

‘’This isn’t a skunk works any more’’



New Functions, Roles!

Audience Development Ad Operations Online / Viral Marketing Search Engine Marketing / Search Engine

Optimization Web Analytics Content Producers Community Managers / Social Networking

Directors Mobility and Wireless Product Managers Blog / Wiki / Podcast / Webinar Managers


Hiring – A Sellers’ Market - 1

“It’s a tight market out there now when it comes to Internet experience.”

“We’re still able to recruit good people at the right price, which is higher than previous. It is impossible to hold the company’s growth rate and set new growth paths without changing and adding staff.”

“Demand for e-talent is five times greater than supply.”



Hiring – A Sellers’ Market - 2

“We have to start working to increase the overall digital talent pool; it doesn't help anyone to keep stealing the same five people."

"It's a tug of war out there.“

“Metrics is huge. We are definitely in the age of the rocket-scientist data analyst. Analytics are a major new area.”



Hot! Hot! Hot! More Jobs for Metrics than Editors!

Web Metrics

Search Marketing

Web Analytics

Web Editor


Hot! Hot! Hot! Search Marketing Jobs Equal Site Ops

Search Marketing


Hot! Hot! Hot! Audience Development v Circulation

Content Development Rises to Equal Editor


Hot! Hot! Hot! Social Networking Up 8-Fold


Outsell’s Essential Actions

Don’t Obsess About ‘Getting all of it Right’

Don’t Rush to Judgment

Match Org Structure to Stage of Evolution

But Structure is Only One Element in the Mix

Seed the Organization with Versatile Talent

Money Speaks, Metrics Leads

Don’t Operate In State of Denial



Come By and Visit Us

330 Primrose Road, Suite 510

Burlingame, CA 94010

Tel: (650) 342-6060

Fax: (650) 342-7135

www.outsellinc.com

Documents

Organizational Development: Organize For Tomorrow’s Success Moderator: Howard Roth, Ascend Media Panel: Peter Goldstone, Hanley Wood Business Media Chuck