usa today – innovation in an evolving industry: individual ... · pdf filetravis beitler...

USA TODAY – INNOVATION IN

AN EVOLVING INDUSTRY:

INDIVIDUAL CASE STUDY MRK428-MU

Travis Beitler Professor JD Singh

TRAVIS BEITLER 1

USA TODAY – INNOVATION IN AN EVOLVING INDUSTRY: INDIVIDUAL CASE STUDY

Table of Contents 1. Executive Summary ................................................................................................................................... 3

2. Identification of the Problem .................................................................................................................... 3

3. SWOT Analysis ........................................................................................................................................... 4

3. 1. Strengths ........................................................................................................................................... 4

Strength 1. Highly innovative newspaper company that has been a leader in news development .... 4

Strength 2 – Gannett is currently the largest newspaper distributor in terms of circulation. ............. 5

Strength 3 – Strong portfolio with multiple Brand Extensions and Partnerships. ................................ 5

Strength 4 – Excellent presence and distribution in the digital environment. ..................................... 5

3.2. Weaknesses ....................................................................................................................................... 6

Weakness 1 – Relatively small amount of digital subscribers. ............................................................. 6

Weakness 2 – Overall revenue and profit is decreasing in their print distribution. ............................. 6

Weakness 3 – Majority of USA Today’s circulation is confined in the United States. .......................... 7

3.3. Opportunities ..................................................................................................................................... 7

Opportunity 1 – Consumers continue to desire information on demand and on mobile devices,

leading to a lush environment in digital media. ................................................................................... 7

Opportunity 2 – Overall global opportunity to expand in digital media. ............................................. 7

Opportunity 3 – Interest in mobile applications and gaming continues to gain popularity. ................ 8

Opportunity 4 – Social Media continues to grow and gain in popularity with consumers for news

distribution. ........................................................................................................................................... 9

3.4. Threats ............................................................................................................................................... 9

Threat 1 – High cost in print distribution and print media. ................................................................ 10

Threat 2- Strong competition from other media competitors. .......................................................... 10

Threat 3 – Consumers desire information that is distributed freely online, leading to fewer

purchases in print media. ................................................................................................................... 10

Threat 4 – Decreased popularity in Classified Advertising. ................................................................ 10

Threat 5 – Top competitors Wall Street Journal and The New York Times, continue to have far more

success in digital subscriptions. .......................................................................................................... 11

4. Organizational Objectives ....................................................................................................................... 11

5. Analysis of Alternatives ........................................................................................................................... 12

5.1. Development of complete Social Media integration with news stories, mobile gaming, and mobile

applications. ............................................................................................................................................ 12

5.2. Increased presence in digital global market and decreased presence in foreign print. .................. 13

6. Recommendation .................................................................................................................................... 14

TRAVIS BEITLER 2


Reasons Why ....................................................................................................................................... 14

7. Implementation Plan .............................................................................................................................. 14

7.1. Short Term Plan (1-3 Months) ......................................................................................................... 14

7.2. Long Term Plan (3 Months +) ........................................................................................................... 15

Works Cited ................................................................................................................................................. 16

TRAVIS BEITLER 3


1. Executive Summary USA Today is the largest circulated American newspaper with over 1.8 million subscriptions. However,

USA Today is facing large losses in print and digital revenue, causing them to have lower profit gains.

This is due to the rising cost of print publication and distribution, too much focus on the American

market, loss of subscribers to their major competitors The Wall Street Journal and The New York Times,

stiff competition from other news mediums, consumers expecting free internet news, and finally overall

decrease in Classified Advertising.

To combat this, USA Today must take advantage of the consumers desire to reach more information

through mobile platforms, recognize their opportunity to grow in the global digital market, take

advantage of the growing popularity in mobile application and gaming platforms, and unify social media

across all mobile touch points.

If USA Today wishes to grow in the dynamic news distribution environment, they must develop a way to

integrate their Social Media platforms with news stories, mobile gaming, and mobile applications.

2. Identification of the Problem USA Today is the most circulated print newspaper in the United States. They also have a strong digital

presence where they have up to 24 million unique internet visitors each month.

Although the above is true, they’re having strong economic trouble over the past few years. USA

Today’s problem is that they’re losing overall print and digital revenue, causing them to have lower

profit gains.

Symptoms include:

Rising cost of print publication and distribution

Too much dependence on the United States news media industry

Losing overall digital subscriptions to their competitors which include The Wall Street Journal

and The New York Times

Fierce competition in distributing news information from other media competitors

Consumers adapting to free internet news, leading to fewer purchases in print and digital media

An overall decrease in Classified Advertising as businesses turn to Craigslist and Kijiji to access

their consumers.

TRAVIS BEITLER 4


3. SWOT Analysis Strengths Weaknesses

Strength 1 – Highly innovative newspaper company that has been a leader in news development

Strength 2 – Gannett is currently the largest newspaper distributor in terms of circulation.

Strength 3 – Strong portfolio with multiple Brand Extensions and Partnerships.

Strength 4 – Excellent presence and distribution in the digital environment.

Weakness 1 – Relatively small amount of digital subscribers.

Weakness 2 – Overall sales revenue and profit is decreasing in their print distribution.

Weakness 3 – Majority of USA Today’s circulation is confined in the United States.

Opportunities Threats

Opportunity 1 – Consumers continue to desire information on demand and on mobile devices, leading to a lush environment in digital media.

Opportunity 2 – Overall global opportunity to expand in digital media.

Opportunity 3 – Interest in mobile applications and gaming continues to gain popularity.

Opportunity 4 – Social Media continues to grow and gain in popularity with consumers for news distribution.

Threat 1 – High cost in print distribution and print media.

Threat 2- Strong competition from other media competitors.

Threat 3 – Consumers desire information that is distributed freely online, leading to fewer purchases in print media.

Threat 4 – Decreased popularity in Classified Advertising.

Threat 5 – Top competitors Wall Street Journal and The New York Times, continue to have far more success in digital subscriptions.

3. 1. Strengths Strength 1 – Highly innovative newspaper company that has been a leader in news development

Strength 2 – Gannett is currently the largest newspaper distributor in terms of circulation.

Strength 3 – Strong portfolio with multiple Brand Extensions and Partnerships.

Strength 4 – Excellent presence and distribution in the digital environment.

Strength 1. Highly innovative newspaper company that has been a leader in news development USA Today has built a strong foundation with its consumer base as a newspaper determined to deliver

the most up-to-date news in the most convenient way possible. They started their trend in innovation

as early as 1982 where they used highly colourful photos, graphs, and charts to attract the soundbyte

generation (Ferrell, 314). This would continue this trend of innovation by having their stories delayed 4

hours ahead of their competitors (Ferrell, 317), and reducing newspaper width from 54” to 50” in

response to customer feedback (Ferrell, 316). USA Today to this date continues to innovate, keeping in

line with their competition by providing on-demand information through both digital, and mobile

devices (Ferrell, 318).

TRAVIS BEITLER 5


Strength 2 – Gannett is currently the largest newspaper distributor in terms of circulation. Gannett currently boasts the largest audience in the United States with a commanding “11.6 million

readers every weekday and 12 million readers every Sunday” (Ferrell, 313). Also, USA Today remains

the most circulated print newspaper in the United States with “1.8 million daily papers in circulation”

(Ferrell, 313).

Strength 3 – Strong portfolio with multiple Brand Extensions and Partnerships. USA Today currently owns multiple retail outlets in airport terminals labelled as USA Today Travel Zone

(Ferrell, 319). They also own the following brands:

USA Today Live

Reviewed.com

AutoPilot App

And Partnerships with:

Fuse

Versus

MOJO HD

Learning.com

MLB (Major League Baseball)

Doritos

Seat Geek

National Geographic

Strength 4 – Excellent presence and distribution in the digital environment. USA Today’s presence and distribution in the digital environment include the following:

Website (USAToday.com)

o News that is updated 24/7

o High quality video, audio that meet their consumers ever growing demands

On-Demand Information

o Developed online stories for mobile devices

o Helps fight against rising print costs

o Increases overall readership, reduces distribution and print expenses

o Blogs, RSS, Podcasts can be accessed through mobile devices (ease of accessibility)

Innovative Categorization Technology

o Stories are categorized by topic

PointRoll

o Innovative ad technology that allows “mouse roll-over” to reveal more information with

ads. This successfully engages customers with local merchants and retailers.

Network Journalism

o Consumer enriched content (Instant Messaging, News Alerts, Recommendations,

Search Functions)

TRAVIS BEITLER 6


3450

3500

3550

3600

3650

3700

3750

Gannett CO. Inc.

3700.112

3557.8

$ M

illio

ns

Print Publising Company

Revenue - Print Media Distribution 2012 - 2013

Sum of 2012

Sum of 2013

3.2. Weaknesses Weakness 1 – Relatively small amount of digital subscribers.

Weakness 2 – Overall sales revenue and profit is decreasing in their print distribution.

Weakness 3 – Majority of USA Today’s circulation is confined in the United States.

Weakness 1 – Relatively small amount of digital subscribers. Although USA Today boasts at having 24 million visitors per month, they have a rather small amount of

subscribers in comparison (116,000) (Ferrell, 320).

Weakness 2 – Overall revenue and profit is decreasing in their print distribution. Gannett is seeing overall loss in their revenue from poor performing sales in print distribution. From

their FY (Fiscal Year) in 2012 to their FY 2013, Gannett saw a loss of 4% in total revenue (“Gannet CO.

Inc.”).

Fig.1.

Fig. 1. Revenue – Print Media Distribution 2012 - 2013 "Weaknesses" marketline. Nov 2014. Web. 22 Feb

2014.

TRAVIS BEITLER 7


0

2000

4000

6000

Garnett CO. Inc.

4645.2

516.1

$ M

illio

ns

Print Publishing Company

Print Media - Revenue by Geographic Segmentation - 2013

Sum of Domestic

Sum of Foreign

Weakness 3 – Majority of USA Today’s circulation is confined in the United States. Gannett’s domestic circulation revenue in print media accounts for 90% of its total revenue

comparatively to its foreign circulation revenue which accounts for 10% (Gannett CO. Inc.).

Fig. 2.

Fig. 2. Print Media– Revenue by Geographic Segmentation 2013 "Revenue Analysis" marketline. Nov

2014. Web. 22 Feb 2014.

3.3. Opportunities Opportunity 1 – Consumers continue to desire information on demand and on mobile devices, leading

to a lush environment in digital media.

Opportunity 2 – Overall global opportunity to expand in digital media.

Opportunity 3 – Interest in mobile applications and gaming continues to gain popularity.


distribution.

Opportunity 1 – Consumers continue to desire information on demand and on mobile devices,

leading to a lush environment in digital media. Consumers continue to desire information on demand in both the United States and in Canada. Mobile

devices and digital print media are driving demand and compromise for up to 35% market growth since

2006 (“News Agencies in Canada” 1).

Opportunity 2 – Overall global opportunity to expand in digital media. There is a large portion of people who surf the internet on mobile devices as well as desktop computers.

The number of people who have access to the internet now comprises of over 1 billion people (Ferrell,

322). Canada appears to be a thriving market for digital media, as the amount of people who have

access to the internet in the country sits at 68% (“News Agencies in Canada” 1). Furthermore, there is a

high level of public interest in international news as imported International News saw revenue of $113.7

TRAVIS BEITLER 8


0%

50%

100%

150%

200%

250%

300%

Digital Gaming Mobile Gaming

3% 7%15%31%

102%

287%

% o

f G

row

th

Gaming Plaform

Sales of Video Games by Category - 2008 - 2013

Sum of 2012/2013

Sum of 2008-13 CAGR

Sum of 2008/13 Total

million, an increase of 43% since 2006 (“News Agencies in Canada” 1). Only 7% of those agencies are

satisfying Canadian local demand (“News Agencies in Canada” 1), leaving plenty of growth opportunities

in the digital environment for USA Today.

Opportunity 3 – Interest in mobile applications and gaming continues to gain popularity. As people continue to live life in society that has become an information hub, USA Today has been quick

to adapt. They’ve formed multiple information sources that include mobile applications such as

Autopilot, which helped increase mobile traffic by 154% in 2011 (Ferrell, 324). To add to this, USA Today

is also invested in mobile gaming, developing trivia based games for their target audience. Mobile

gaming in the United States has increased drastically in popularity over the last few years. Android and

IOS games are continuously seeing increases with popular games such as “Clash of Clans” (“Video Games

in the U.S” 1). To add to this, mobile gaming alone has seen an overall increase of 287% since 2008

(“Video Games in the U.S” 1). Adding more options to mobile gaming through their website and

developing ways for consumers to update their gaming status to social media, leaves plenty of

opportunity for growth.

Fig.3.

Fig. 3. Sales of Video Games by Category 2008 – 2013 "Trends" euromonitorinternational. Sept 2014.

Web. 22 Feb 2014.

TRAVIS BEITLER 9



distribution. Social Media continues to see grow and gain popularity among mobile and digital consumers. The top 3

Social Media outlets are: Facebook, Qzone, and Sina Weibo, each one with over 500 million unique

monthly visitors ("Top 3 Trends in Social Media for 2014: Privacy, Publishing and Pictures." 1)

Fig.4.

Fig. 4. Biggest Social Networks in the World: March 2014 "Top 3 Trends in Social Media for 2014: Privacy,

Publishing and Pictures" euromonitorinternational. Apr 2014. Web. 22 Feb 2014.

With all those unique monthly visitors, comes the opportunity to distribute and publish information

digitally across social network platforms. “Functioning as something akin to a newsletter, publishing

analysis, data and PR releases to industry contacts and public subscribers offers an opportunity to

explain businesses practices and deliver the corporate message, with the ultimate goal of attracting

more contacts, clients, keyword hits on search engines and click-troughs to homepages” ("Top 3 Trends

in Social Media for 2014: Privacy, Publishing and Pictures." 1). LinkedIn for instance, set the standard for

publishing stories with over 250 million unique monthly views and providing opportunities for their

consumers to reach out beyond their website ("Top 3 Trends in Social Media for 2014: Privacy,

Publishing and Pictures." 1). As USA Today is already involved in social media, publishing their stories to

social media and linking them to other social media outlets as well as their website, could help create

awareness for their brand.

3.4. Threats Threat 1 – High cost in print distribution and print media.

Threat 2- Strong competition from other media competitors.

Threat 3 – Consumers desire information that is distributed freely online, leading to fewer purchases in

print media.

TRAVIS BEITLER 10


Threat 4 – Decreased popularity in Classified Advertising.

Threat 5 – Top competitors Wall Street Journal and The New York Times, continue to have far more

success in digital subscriptions.

Threat 1 – High cost in print distribution and print media. The high cost of print media continues to increase, making it difficult for publishing firms to gain more

profit. For instance, cost per ton of news print increased by 13% in 2011 (Ferrell, 323). That increase

shows no sign in slowing down, forcing the majority of news agencies to find new innovative ways of

releasing their news stories across different mediums.

Threat 2- Strong competition from other media competitors. Fig. 5.

Source of News Use All the Time or Occasionally

Use Rarely or Never

Local TV News 76% 23%

Network TV News 66% 32%

Cable TV News 60% 38%

Local Newspapers 69% 30%

National Newspaper 25% 73%

Weekly News Magazine 25% 72%

Online News Aggregators 49% 48%

Cable TV Websites 36% 61%

National Newspaper Websites 36% 61%

Fig. 5. Sources of News for U.S. Audits "PART 5: Cases: Case #1: USA

Today" euromonitorinternational. Sept 2014. Print. 22 Feb 2014

USA Today continues to face fierce competition in distributing its information to their consumers. As

shown above in Fig.5, USA Today has to compete with other mediums to deliver the news which include:

Television, Digital, Local, and Podcasts. For some consumers they just prefer other forms of methods to

receive their information.

Threat 3 – Consumers desire information that is distributed freely online, leading to fewer

purchases in print media. Consumers wish to have news information distributed to them freely versus a pay model. The three top

U.S. News distributors The Wall Street Journal, The New York Times, and USA Today, have been

incorporating pay walls. These pay walls limit readers to 5-15 free stories, before they’re asked to

purchase digital access (Ferrell, 324). To add to this, 41% of consumers find their news stories off the

internet comparatively to 31% who cite from newspapers (Ferrell, 325).

Threat 4 – Decreased popularity in Classified Advertising. Classified Advertising continues to take massive hits, due to the success of free Classified Advertising

sites such as Craigslist and Kijiji. This has led to USA Today’s print advertising revenue seeing a decrease

of 51% since 2005 (Ferrell, 322). This trend doesn’t just affect USA Today, but it has been felt all across

the publishing print sector classified advertising has decreased by 71% in just six years (Ferrell, 322).

TRAVIS BEITLER 11


Threat 5 – Top competitors Wall Street Journal and The New York Times, continue to have far

more success in digital subscriptions. Although USA Today has 24 million unique monthly visitors, they’ve failed to actually draw in a

significant amount of digital subscribers. Compared to their biggest competitors, USA Today falls way

behind in terms of digital subscriptions (Ferrell, 320).

4. Organizational Objectives USA Today

To increase overall profit of digital media by 10% and decrease expenses of print media by 15%

by 2016

Increase awareness of digital social media presence and news circulation by 10% by 2016

Develop and introduce more mobile applications and games for consumers by 2016.

Integrate and connect all mobile applications/games/news interfaces to social media networks

that USA Today is involved with by 2016

Newspaper Total Digital Subscribers

USA Today 116,000

Wall Street Journal 552,000

New York Times 807,000

TRAVIS BEITLER 12


5. Analysis of Alternatives

5.1. Development of complete Social Media integration with news stories, mobile

gaming, and mobile applications. Social media has grown incredibly popular across digital media and mobile devices. Facebook, receives

up to 900 million unique visitors monthly, Twitter 300 million, and LinkedIn 250 million ("Top 3 Trends in

Social Media for 2014: Privacy, Publishing and Pictures." 1). Based on this, consumers have a longing

desire to obtain convenient information that can be accessed through their mobile devices on the go.

Mobile gaming has seen an increase of 287% in the United States over the last six years (“Video Games

in the U.S” 1) and mobile applications continue to gain popularity statewide. With this increase in

popularity comes the opportunity for USA Today to continue purchasing applications and mobile games

for their target audience.

The important aspect to consider is not the games and applications themselves, but how exactly they

will be integrated into USA Today’s social media and news platforms. By purchasing the rights to games,

or contracting for development of one ($100,000 for IOS) (Crew) they could then integrate it onto social

media leaderboards (where consumers can see their progress comparatively to other consumers) and

link that leaderboard back to their website. Furthermore, they could add communities, discussion

boards, and forum groups where individuals involved with the game could interact with one another.

Also providing the opportunity for feedback, and connecting it across all their mobile social touch points

opens up potential for an incredibly large community.

5% of those 24 million unique individuals that visit the site each month, are potential video

gamers, who can then share the game with their friends to other social media platforms

through word of mouth. This effectively increases brand awareness of USA Today, while

providing potential profit on purchase of each mobile game (average mobile game = $2.00).

Allowing for access to mobile applications through the same method, would allow more potential for

brand growth and digital circulation of USA Today. Finally, all social media interfaces should be

connected to USA Today’s website, with the option of communicating across all social media touch

points.

Advantages

Consumers are engaged with the brand through their mobile devices

Consumers share their passion of the product (application, game) and share it with individuals

across their mobile platforms through digital word of mouth.

Integration and linking to social media cost is relatively low

Potential for digital advertising through mobile applications and mobile gaming

Disadvantages

Connecting communities through all social media platforms could prove to be challenging

Online communities, discussion boards, and forums might become confused if interface is not

simplistic

Games and applications can prove to be difficult matching consumer expectations

TRAVIS BEITLER 13


5.2. Increased presence in digital global market and decreased presence in foreign print. USA Today has already been involved in a stronger digital media presence. Their focus by direction of

CEO Larry Kramer, is for online, tablet, and mobile devices (Ferrell, 323). They’ve restructured their

organization, laying off many individuals and hiring key executives. Also, they’ve cut back on newspaper

print and distribution in the United States by a third and increased profit by over $100 million (Ferrell,

323).

While they have applied this application to the United States, USA Today has missed out on

opportunities outside the United States. Canada is a lucrative market that is hungry for international

business news, it has seen an increase in international imported news by 43%, and current importers are

only providing 7% satisfaction for Canadians (“News Agencies in Canada” 1).

USA Today should focus on providing Canadians and the global market with mobile friendly access to

their digital news print, while cutting back on expenses to print distribution globally. They should still

continue to distribute print, as baby boomers still hold interest in printed newspaper versus the complex

structure of digital devices.

Advantages

Enhanced exposure to the digital global environment, increasing awareness

Cutting back on expenditures through print media, in the process increasing profit

Canada holds a lucrative opportunity for international news vendors (current importers are only

providing 7% satisfaction for Canadians)

Disadvantages

Market penetration has to be careful, as some countries culture don’t mingle well with the

United States

Cutting back in print in some countries could prove to be difficult as not all communities are

connected to the digital environment (such as 3rd world countries).

Not all countries have internet access for the majority of their population

TRAVIS BEITLER 14


6. Recommendation Out of both alternatives, the most appealing one for USA Today to pursue would be Development of

complete Social Media integration with news stories, mobile gaming, and mobile applications.

Reasons Why

U.S. Newspapers have not taken the advantage of linking mobile applications and mobile games

to their websites, providing USA Today a unique competitive advantage.

U.S. Newspapers provide a simplistic approach to broadcasting their stories through social

media, but haven’t unified and integrated all their mobile touch points for their consumers.

Communities, forums, and discussion boards, would be linked to other community members

across all social media platforms creating a hub for all gamers, news junkies, and app users to

communicate freely from.

USA Today’s appeal will be increased through social media’s word of mouth

Social media, mobile applications, and mobile gaming are cost-effective (relatively cheap and

easy to integrate compared to print media).

7. Implementation Plan

7.1. Short Term Plan (1-3 Months) 1ST Month Meeting with top key executives to discuss implementation of overall plan

Have a companywide news announcement from the president, labelling details and changes that are about to occur in distribution and corporate environments

Meeting with industry app and mobile gaming developers to discuss strategy and tactics in developing games and apps for specific target markets

Meeting with Social Media/IMC Teams to discuss integration and unification of social media platforms to USAToday.com. IMC Teams to discuss how a unique message will be delivered to capture our target market.

2nd Month Development of apps and games in final stages

Working with IMC teams to finalize approach to target market

Preparing finalized implementation of new social media platforms onto website.

3rd Month Games and apps finalized and implemented onto website

Debugging and performance check of unified integrated social media platforms to website

Meeting with executives to inform them of final stages of plans

IMC activities launched towards the general public to build up anticipation of the new social media/mobile interface directive.

TRAVIS BEITLER 15


7.2. Long Term Plan (3 Months +) 4th Month Launch of new service and test market in the United States

Polls and feedback as well as live service for consumers having difficulty

5 Months + Evaluate overall performance of new service

Provide feedback to key executives on performance of new service

Provide feedback to consumers and make repairs to site as needed

6 Months+ Evaluate overall performance, launch into new digital markets if service is successful.

TRAVIS BEITLER 16


Works Cited

Crew "How Much to Make an App" Feb 2015 Crew. howmuchtomakeanapp.com. Web. 22 Feb 2014.

"Gannett CO. Inc." MarketLine Nov 2014: 1-20. MarketLine Advantage. Web. 22 Feb 2015

Hartline, Ferrelll. Marketing Strategy: Text and Cases. 6th edition. Mason: Ceneage, 2014. Print.

"News Agencies in Canada." Euromonitor International. Apr 2013: 1-25. Passport GMID. Web. 22 Feb

2015

"Top 3 Trends in Social Media for 2014: Privacy, Publishing and Pictures." Euromonitor International. Apr

2014: 1-2. Passport GMID. Web. 22 Feb 2015

"Video Games in the US." Euromonitor International. Sept 2014: 1-23. Passport GMID. Web. 22 Feb 2015

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