WNC 2009: Cut costs, increase efficiency and master the platforms

Advertising spends will grow by 6.8 percent over the next five years, predicts consultancy firm, PricewaterhouseCoopers. "And it will not come from online advertising in newspapers," said Marieke van der Donk, senior manager, Entertainment and Media, PwC N.V. (Netherlands).

What this effectively means is that newspaper owners will have to focus on increasing their operational efficiency and lowering costs. Something they embarked upon during the economic recession, which hit them very hard.

Newspaper companies across the globe have taken several steps to achieve this, including outsourcing, reduction of overheads, merging offices, and integrating Web and print operations. Media 3, the largest media group in Russia, was able to maximize their efficiency by merging four editorial and business offices into one centre. The group publishes national and local newspapers.

Alexander P Strakhov, chief executive officer, Media3, speaking at the session on 'The resourceful newspaper company: achieving business efficiency and creating a sustainable future' at the 62nd World Newspaper Congress (WNC), outlined three important points to consider, before implementing this strategy. The first is to think through, study and then prepare carefully for the transition. In doing so, one should not cut back, but create opportunities. Also, ensure that the main product is not damaged in the process, he added.

Newspaper owners are also focusing on outsourcing to reduce costs and increase efficiency. "Look at outsourcing strategically, and not just technically," said Arun Jethmalani, CEO of ValueNotes, a research company. He contended that outsourcing is not new to the industry; and it can be a solution for companies that want to cut costs. Freelancers, which have been used by newspaper companies around the world for years, represent, in a way, work outsourced.

However, outsourcing of editorial content is viewed with skepticism. From pure cynicism to doubts over the quality, it is the least preferred option when it comes to outsourcing, said Francois Nel, director of Journalism Leaders Programme at University of Central Lancashire.

"In editorial outsourcing, trust is everything," said John Spencer, managing editor of the Press Association. His publication outsources works to a company in India, which provides support for editorial purposes. He felt that outsourcing worked and allowed businesses to focus on what makes their product unique, such as local features and analysis. However, he added that outsourcing is never intended to replace one's own editorial floor.

And while newspaper owners increase efficiency and cut down costs, they need to learn how to use various platforms such as the mobile and internet, in addition to the paper, sophisticatedly, to attract advertisers. "Advertisers want accountability, return on investment and measurement of what they do online, especially," said van der Donk.