A Nokia lesson for Aussie media

The dramatic news from Fairfax Media and News Limited last month brought to mind Bob Garfield's Chaos Scenario which was published in 2009. In this prescient marketing tome he foretells of the death of traditional media as we know it. In its place, a world of astonishing media fragmentation, limited audience reach, and decreasing advertising revenues. In short, it's a world with no critical mass to professionally and profitably deliver almost any marketing message. Sounds familiar doesn't it?

Behaviour shift

In explaining Fairfax Media's plan to secure its digital future, the company's chief executive and managing director, Greg Hywood asserts in the company's media release, “Readers' behaviours have changed and will not change back. As a result, we are taking decisive actions to fundamentally change the way we do business.”

In today's digital media world, newspapers have become expensive printing and delivery mechanisms for news and information that is more voraciously consumed than ever before and accessed on computers, smartphones and tablets everywhere at all times of the day. With all this free digital content, fewer people have time to open a physical newspaper let alone purchase one.

Reinvent or die

For the newspaper industry, it's not so much a dilemma of ‘publish or perish' anymore, but a mandate to ‘reinvent or die'. As Mary Meeker, feted venture capitalist at Kleiner Perkins Caufield & Byers puts it in her annual state of the internet report, “Everything from computing devices, connectivity and access news and information has been “re-imagined”. She argues that technology has compelled businesses to “re-imagine” their products and services and how they deliver value.

So for the newspapers, pay walls will shoot up around the content that they previously gave away to monetize the value of the online content that consumers actually trust. Is that really a re-imagining of news or just a return to the past albeit with new technology?

Relevance

Reinvention must begin at the core and it's a directive for any business that wants to survive and thrive in a digitally connected age. Take, for instance, the plight of Nokia, a smartphone company that is struggling to stay relevant in the smartphone age.

Only a few years ago, Nokia dominated the market. Yet today, while data from ABI Research shows that global smartphone shipments grew 41 per cent  year-over-year to 144.6 million as of the quarter ending March 2012, Nokia is literally for fighting for life despite this rapidly expanding market.

Indeed all the spoils are being exploited by Samsung and Apple who together captured 55 per cent  of global smartphone shipments in Q1 2012 and, tellingly, over 90 per cent of the market's profits.  

Nokia has suffered a 40 per cent  sequential decline in shipments and may soon slip below Blackberry's dismal position. As Michael Morgan, senior analyst, devices, applications & content at ABI Research contends, “At this point in the year, Nokia will have to grow its Windows Phone business 5000 per cent  in 2012 just to offset its declines in Symbian shipments”.

 Smartphone Vendor Shipments, 1Q'2012 (Millions of units)

Source: ABI Research

So what happened at Nokia? They made the wrong decisions and missed the big trends. They fell behind when the world around them evolved. They watched and waited while Apple reinvented the category.

If Nokia is going to stop the rot and simply survive, the company, like Fairfax must make some hard, long overdue decisions. Whether Fairfax has made the changes in time to remain relevant and prosper in the digital age, remains to be seen.

Lower brand recall

Of course, while businesses must re-imagine their products and services, the mass fragmentation of the media landscape means that marketing has to change just as dramatically as well. According to a report published in June by youth communications and media company, Lifelounge Group, younger shoppers have considerably lower recall of individual brands despite searching and shopping across a growing number of online channels.

The survey which interviews more than 1,000 Australians every quarter, found that only 15 per cent of Australians aged 16-30 could recall an individual communication from a brand that actually resonated with them.  This figure is down 12 per cent from the previously published data in 2010. The most recognised brands for this group were Coca-Cola at 9 per cent, Bonds at 7 per cent and Nike at 4 per cent.

In this massively fragmented media environment, marketers need to get better at delivering a consistent and compelling brand experience across their chosen channels. It's no longer as simple as working out reach and frequency and throwing a large bucket of money at TV and print to get your brand out there and your message across.  It's also not just a matter of running banners because your customers are paying less and less attention to them.  Social media is seen as a panacea but that environment has its challenges and it's just as fragmented.

Marketing lessons for the new environment 

Australians young and old have been leaving traditional online and offline media in droves. And while shows like ‘The Voice' can command the huge audiences of old, it's only a blip on the landscape. Fragmentation is here to stay and for marketers to cut through and become or remain relevant, new skills will need to be developed to leverage the new environment and marketing budgets will need to be assigned accordingly.  If marketers don't come to grips with this today they will be in the same position as Fairfax, Nokia and others.  Successfully finding a way of delivering a message in a hyper fragmented and distracted world will separate those companies that prosper from those that don't.

Where to start:

• Create a few experiments and behave like a start-up. Connect with your prospects and customers in new and interesting ways.
• Engage your customers in an ongoing dialogue so you're less dependent on advertising to drive response.
• Start to measure what is going on so you know what really delivers an ROI.
• Ignore vague measurements like “engagement” and focus of what is really happening to your customers and their purchase behaviour.  Engagement is a way of feeling better about the money you spend that does not generate a real return.
• Sort out your technology.  Marketing winners in the future will be those companies who know how to use relevant technology.
• Ignore the noise of Cannes and similar festivals they are about celebrating the past not dealing with the future.
• Ignore the Old Spice success stories and endless case studies.  That kind of success is a matter of luck not strategy.  Find your way of working with things that are predictable and repeatable.