During the past four to five years, the media industry and, specifically, the newspaper industry, has been hit especially hard not only by the economy but also by the continued growth of the Internet. The industry continues to struggle to determine ways to reduce the advertising and circulation declines it has been plagued with for years, and many companies have implemented significant cost-cutting measures in order to return to profitable levels.
With these difficult conditions, it is more important than ever that companies ensure they are well-informed about their own businesses by developing and utilizing effective metrics.
Metrics can be used to drive improvements and help businesses focus their people and resources on what is most important. The range of metrics that companies can employ vary from those that are mandatory — for legal, safety, or contractual purposes — to those that track increases in efficiency, reductions in complaints, greater profits, and better savings. Moreover, metrics will help tell a company where it has been, where it is going, if there are issues that need to be addressed, and whether the organization has hit its goals. Overall, metrics should reflect and support the various strategies for all aspects of the organization, including finance, marketing, competition, standards, or customer requirements and expectations.
Keeping metrics simple will make it easier to understand and communicate to employees. Good metrics can help drive strategy as well as provide direction and focus to the organization and its employees. There are several keys to implementing effective, successful metrics:
- Metrics should be clearly defined so a newspaper can define its successes.
- Metrics must have the approval of management and the buy-in from employees so everyone is on the same page.
- Management and employees must understand what data needs to be gathered and how to obtain it.
- Results must be measured and shared with the appropriate employees so the information collected can be utilized to the fullest extent.
- Too many metrics may be a detriment as there may be too much information and interpreting results may be difficult.
Newspapers traditionally have a significant number of measuring points for circulation, advertising customers, and revenue. Additionally, there are several resources available in the industry allowing for strategic comparability with similar size organizations or newspapers. One issue surrounding industry statistics is that there generally is a lag as to when the statistics become available. Because of the speed at which the newspaper industry has changed the past few years, some industry statistics may be stale by the time they are published.
Newspapers should focus on developing several key financial and nonfinancial metrics that are timely, meaningful, and help measure performance to allow the company to succeed. These key metrics should not only measure the company against itself and its objectives but also against its peer group within the industry. And as digital products continue to grow, measuring profitability by each product (print and digital), readership, and advertising dollars spent becomes increasingly more critical.
Richard Snyder can be reached at Email or 215.441.4600.