The Chaos Scenario

Recently I’ve had the pleasure of spending a lot of time with several retailers. We talk at ease about television and radio and newspaper, but I’m often met with blank stares when I bring up the subject of online strategy, ecommerce, SEO, PPC, email marketing and other non-traditional media.

Many store owners tell me they still spend the majority of their advertising dollars on newspaper and other print media. In a recent report, stores categorized as LOW PROFIT businesses continue to spend 34.3% of their marketing in print. These same companies are spending under .05% on all things web!?

Retooling is coming to a newspaper near you in the near future. The newspaper industry is in a free fall in every measurable category: 24 of the top 25 papers in North America declined in circulation in the last 15 months. The average decline in circulation is 20%. Advertising spending has dropped 7.5% overall, but the first quarter of 2009 saw a decline of 28.3% in advertising spending. There is a plunging reduction of $2.6 billion from just a year earlier. Scripps, Gannet, McClatchy, and the New York Times have all watched their stock price go to zero in 2009.They are bankrupt!

The Chaos Scenario by Bob GarfieldIn the new book, The Chaos Scenario, Bob Garfield writes in Chapter 1, page 33; “Both print and broadcast — burdened with unwieldy, archaic and crushingly expensive means of distribution — are experiencing the disintegration of the audience critical mass they require to operate profitably. Moreover, they are losing that audience to the infinitely fragmented digital media, which have near-zero distribution costs and are overwhelmingly free of charge to the user. Free is a tough price to compete with. As documented by Woodward and Bernstein, Deep Throat’s advice to unraveling Watergate was to ‘Follow the money.’ To understand the current predicament, you must follow the no-money.”

Safeguarded opinion established in days gone by can cause you real problems in the days ahead. Ask yourself these questions from Garfield’s Chaos group:

  1. Consider your own habits.  Do you read newspapers as frequently as you once did, or do you get your news online?
  2. Discuss the impact of Craigslist, Monster.com, and eHarmony on newspaper classified advertising.
  3. If newspaper and magazine display advertising disappear, what alternatives will connect that audience to your brand?
  4. If media institutions as large as the Tribune Company (Chicago Tribune, Los Angeles Times) are in bankruptcy, is any mass media outlet safe?
  5. How has the Internet changed the availability of content?
  6. How did you get your news ten years ago? How do you get it today?
  7. How much time do you spend connecting with your friends vs. consuming media?  How has that ratio changed in the last ten years?
  8. If you could no longer buy advertising on mass media, how would you connect with your customers?
  9. Can you name any businesses that succeeded in stopping cultural shifts?
  10. Can you name any businesses that successfully adapted to cultural shifts?
  11. Is your company organized/equipped to effectively listen to its customers?  What should you change or implement in order to hear them?
  12. What are your customers trying to tell you?  What are you doing about it?

Empowered business owners get to decide what they believe. Documented changes in business should not be avoided. Entrenched thinking might be more comfortable than the alternative, but without a planned strategy your future is bleak. When the newspapers themselves fail in your marketplace, how will you deliver your story?

19 thoughts on “The Chaos Scenario”

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