The approaching winter looks to be a bleak one for media companies — and the brands who are trying to build their own.
Cost of living is up across the board, belts are tightening, and cost-cutting measures are underway. For companies that invested heavily in brand publishing over the past couple of years, a worsening economic outlook means hard questions are must now be asked about the strength of their editorial propositions and what comes next for their brand publishing ambitions.
Shockwaves are spreading already across the traditional media landscape. New data from Challenger, Gray & Christmas, a staffing firm, found that layoffs in news media are increasing: so far, almost 3,000 media have been cut this year. A third of those are in the news media industry. Emailing with a marketing chief at a midsized brand recently, it became clear that there are a few factors at play for brand publishers.
Companies across the board will continue to cut costs, which of course means shrinking marketing budgets. (In most cases, brand publishing and “media arms” initiatives are usually carved out from those budgets.) Marketing spend was down 5% in September, year-over-year, continuing a four-month decline, per Standard Media Index. Per Insider Intelligence, marketing departments lost 8,700 jobs in September, a sharp reversal after growth during the summer.
Companies also tend to focus on short-term results during downturns, often prioritizing lower-funnel and direct response marketing activity vs. brand-building activities such as publishing.
At the same time, it’s becoming increasingly clear that for all the talk of “building media arms,” many companies haven’t necessarily yet found product-market with their publications, or haven’t put in the time and effort to create a sound editorial strategy. In many cases, they haven’t actually asked the key question: Do audiences want or need this? A raft of editorial publications have set sail, only to never find the right audience. Netflix’s forays into publishing with Tudum are a good example of how difficult it can be to find footing in content, and also how dangerous it can be to overhire ahead of a clear strategy. In an tight economic environment, those gaps start showing up pretty quickly.
I spoke with two longtime recruiters at Koller Search about what they’re noticing. Karen Danzinger, who directs the firm’s creative search practice, says one symptom she’s noticed is that content teams can be the first cut in hard times particularly when they’re hired because it just “sounds like a good idea.” “Once they do, they don’t really know what to do with them. They become not utilized, therefore extraneous.”
“We do get the calls from the journalists who’ve been laid off and are looking again. We’re bracing for a larger influx of those calls to start coming in soon, unfortunately,” she added.
On the other hand, as one marketing exec pointed out, that publishing content is likelier to be a much leaner activity than other marketing. Which could mean that conceivably, publishing teams may be kept intact because they tend to be smaller and “punch above their weight” even as other marketing functions feel the squeeze.
It’s not all doom and gloom. For brands that are committed to publishing and have the right audience-content fit, this market correction may end up actually being a maturation. One another potential piece of good news for brand publishing leaders: Talent may be about to get cheaper. We’ve noted earlier that “content” people were commanding extra-high rates because brands knew that in order to attract top tier journalists, they would have to pay up. That’s still true, but overall compensation may also shrink a little in a tighter economic environment, making it easier and more affordable to find and recruit good editorial talent.