TALES FROM THE HIVE

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TALES FROM THE HIVE

• Managing Innovation
• at a Regional
• U.S. Newspaper

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The Spokesman-Review

• 7-day Average Circulation 115,000
• Largest daily newspaper between Minneapolis and
  Seattle
• Distribution area 37,000 square miles
• Core Population 443,000 in 162,000 HHs
• Core Penetration by Newspaper 54
• 550 Employees newsroom of 135
• Family-owned independent

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What is The Hive?

• A place where all functions and
• people involved with new-product
• development, product makeover
• database marketing, CRM
• and high-tech communication
• are co-located

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Why is it called The Hive?

• Like a beehive, it houses specialists working
  together to achieve common goals.
• The name has no ties to traditional newspaper
  nomenclature. Thats intentional.
• The name connotes fun and evokes buzz.
  (Everyone in The Hive has a bee name DataDrone,
  Beekeeper, Stinger, Honey, Queen B, etc.)
• .

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What functions are co-located?

• New-product development
• Market research
• Data collection and management
• Marketing technology
• Product repair/makeover
• Websites
• E-mail and web marketing
• Direct-mail
• Call-center management
• Consumer marketing

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Why Co-Locate?

• 1. Create synergy.
• 2. Break down walls.
• 3. Provide protective cover for talent.
• 4. Create a non-traditional environment
• We have conversation pits, not conference rooms
• We aim for a high-design physical environment.
• We have Foosball. We have lava lamps!

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The Hive is not . . .

• . . . a department
• . . . a company
• . . . a project
• The Hive has no budget . . . but everything
  it does is budgeted on a project-by-project basis
  or allocated from departments.

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Hive Creativity Techniques

• Turn all premises upside down (like Costco).
• Limit tools (as in Apollo 13, i.e., build the
  box to get outside of)
• Limit the missions scope
• Limit the missions timeframe
• Work the problem
• Simplicity, Slimplicity, Synplicity
• (Keep it simple, lean and compatible)
• TMPending Trademark of The Oxalis Group, Shaun
  OL. Higgins

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Hive Creativity Techniques

• Many small trump few large
• Pack the room!
• Instant post-mortems (e.g., revising e-mail
  message lines)
• Dress it up (first-rate design)
• Big means
• BIG!

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Hive Decision Questions

• No mission, no money!
• Is the market REALLY demanding this?
• No champ, no stamp! (Does anyone really LIKE this
  idea? Or, Stop sucking up, please!)
• Fastest, surest, biggestmix and match, but
  frontend the results.
• What are the opportunity costs?
• If Johnny Courier jumps off a bridge, will we?

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Timeline of Innovation at The Spokesman-Review

• 1980s
• Experimented with robotic writing programs in
  newsroom.
• Launched one of the first electronic publishing
  projects by a U.S. newspaper.

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Timeline of Innovation at The Spokesman-Review

• 1990s
• Electronic publishing evolves onto the Web
  spokesmanreview.com and spokane.net.
• New Media Ventures subsidiary formed.
• Database marketing techniques applied to
  Circulation with mixed results.
• Demand-distribution publications launched
  Rentals, auto, restaurants, etc.

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Timeline of Innovation at The Spokesman-Review

• 2000s
• New Circulation (PBS) and Classified (Mactive)
  operating systems installed by S-R.
• Universal Customer-Service Unit formed.
• New general and targeted publications
• PINCH, Better Health Living, Saturday
  Finance, 7, Home, quarterly Travel, new free
  weekly for suburbs.
• The Hive starts buzzing!

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Timeline of Innovation at The Spokesman-Review
(2000s)

• Spokesmanreview.com named best Website of its
  size in the United States.
• Spokesmanreview.com begins charging non-newspaper
  subscribers for newspaper content. No drop in
  traffic. 100,000 added to bottom line.
• E-mail updates added to information services for
  business and general audiences.

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Timeline of Innovation at The Spokesman-Review
(2000s)

• Free TMC product, PINCH, repurposed as a 73,000
  circulation free weekly, now ready to offer
  reader-generated copy. Content also posted on
  spokane.net.
• Weekly, zoned section for suburbs relaunched as
  57,000 circulation free weekly newspaper with its
  own website.
• Free classified ads offered by spokane.net in
  opening play for craigslist.com audience.

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Lessons learned from early efforts

• Lesson 1
• State-of-the-art newspaper operating systems
  (Circulation, Classified and A/R) were required
  to support a state-of-the-art Marketing/CRM
  database.
• We had the skills in 1990 to do one-off projects
  but lacked the hardware/software to sustain
  ongoing, high-level CRM until 2003-2004.

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Lessons learned from early efforts

• Lesson 2 Cloning was futile.
• Identifying potential new subscribers was
  deceptively easy
• Finding real new subscribers was difficult and
  too costly.

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Case files on cloning gone astray

• The Case of the 80-year-old Widows
• The Case of the Magnificent Seven
• The Case of the Missing Persons

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Lessons learned from early efforts

• Lesson 3 You cant be a two-item store.
• Most newspapers, including ours, had only two
  things to sell consumers the paper itself and
  Classified ads. One item could be purchased
  everyday the other, every so often.
• We needed more products to upsell.

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Upselling Then and Now

• Then
• Thank you for subscribing. Can I interest you
  in a Classified ad?
• Thank you for advertising with us. Would you
  like to extend your subscription at a special
  rate for Classified advertisers?

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Upselling Then and Now

• Now. . .
• Upsells of more than 20 ad-enhancing features.
• Upsells of SR-branded merchandisebooks, etc..
• Upsells/Cross-sells of online options.
• Upsells of E-Z Pay programs.
• Promotion of newspaper-sponsored events.
• Upsells of target-distribution products.
• Coming soon! Upsells of magazines, national
  papers.

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Next Steps Package Selling

• In 2006 . . .
• All products cross-sold in packages of
  mix-and-match combinations for example
• An ad in core newspapers Friday Financial
  section
• --plus, ad framing business-update e-mails
• --plus, ad on business pages of online service
• --plus, print ad picked up request-only Saturday
  Stock market section.

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Next Steps Company Store

• In 2006
• Add an extended line of high-quality newspaper
  merchandise, available online and for upsell by
  Call Center.

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Next Steps 6-column Classifieds

• In 2007
• In 2006, we increased Classified ad type size to
  nearly 8 points.
• January 1, 2008 We will go to 6-column
  classified format, providing a common,
  interchangeable ad size throughout the paper and
  offering opportunity for multiple Classified and
  ROP placements on the same day.

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Next Steps Data-Based Commissions

• Now Subscription commissions based primarily on
  traditional characteristics length of order, E-Z
  Pay, cash with order, etc.
• By 2007 . . .
• Commissions based on household demographics
  (e.g., more for those desired by
  advertisers).
• Save bonuses based on desirability of
  household to advertiser. (We do a bit of this
  now.)

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Next Steps Any Day Home Delivery

• By 2008
• You only want us only every Wednesday?
• No problem!
• You want us Monday, Wednesday, Friday?
• No problem!
• You want it this Saturday only?
• No problem!

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Next Steps Choose your sections

• By 2009
• Everyone gets the Main News section.
• Then its mix-and-match, for example
• Do you want Sports with that?
• Do you want Business with that?
• Do you want Entertainment with that?

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Next Steps All ads in color

• By 2010
• Base ad rates will include full-color (just like
  TV!)
• Steps along the road Color-only sections
• --TV Week (Long ago)
• --Saturday Financial (2006)
• --Any/all section front ads (2005)
• --Forthcoming high-school monthly (2007)

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In Conclusion

• The Hive
• Brings all tech-based marketing efforts together
• Fosters creativity and synergy
• Accelerates product-development
• Presents a clear alternative to traditional
  departmental structures and newspaper
  hierarchies.

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Questions?

• Thank you!
• shaunh_at_spokesman.com