How to Improve the Business Model: Tips to Ukrainian Media Managers
The Centre for Excellence in Economic Journalism at Kyiv School of Economics has conducted research on the business models of Ukrainian media with socio-political and economical focus
depositphotos / IgorVetushko
We published the first part of this study in December. Hereby we are presenting the complete publication. In the second part of this study, Anna Harus, the economist, summarizes the results of 23 interviews with the Ukrainian media representatives concerning their business models. The summary of the study is given further. The complete version is in the link.
Who Do You Work For?
The media lack a detailed portrait of their target audience, which should include more than just a person’s income and occupation. Unfortunately, most media focus on these characteristics only. Other features might be more useful, such as age group, gender composition, place of residence, education level, areas of interests, etc.
A great adjustment could be to calibrate Facebook ads customization, which has dozens of characteristics of the target audience.
To create such a portrait, your audience must be carefully scrutinized. How many of the readers are in your country, what movies they watch, what music they listen to, how they spend their free time, what habits they have, what sports teams they support, how they consume information etc. When you have a more complete vision of all these things, the portrait of the audience would come out quite detailed.
The second step is to compare your target audience with the current one. It may come out that you are trying to reach out to young people, but you real readers are older people. If the target audience and the actual audience don’t match, ask yourself why this happened. What should be changed in your content, distribution and operation in order to reach your target audience?
What Makes You Unique?
A value proposition is a unique media offer for its target audience. Why should this particular audience read your publications and pay for your content with their time and money?
The majority of media representatives surveyed consider the features that are inherent to any high-quality media to be their value proposition. For example, honesty, efficiency, and the absence of unverified news are such factors. Any high-quality media should have such advantages, they are not unique. The value proposition should be something that distinguishes the media among its competitors. Thematic niche and local media describe their value proposition the most accurately because they have a better vision of their audience.
The media should formulate their value proposition clearly. It should also constantly monitor its content for compliance with this proposition.
Where Can You Be Found?
Ukrainian media mainly use the same content distribution channels: their website as well as Facebook and YouTube social networks. The least popular channels are Telegram, mailing lists, and push notifications. Only one media representative mentioned podcasts. None of them named Tik-Tok, although not only Ukrainian youth is already there, but also the mayor of Kyiv and the patrol police.
Strangely enough, there is little attention from Ukrainian media to Instagram, which is popular among the young, to the LinkedIn business network and to Twitter which is more familiar to the English-speaking world.
It is also a shame that the media forgot about outdoor advertising, which can be efficient for some types of audience. We recommend auditing the effectiveness of content distribution channels.
Plan Your Success
Most of the investigated media lack strategic planning, which leads to inefficient tactical decisions. Tactics without strategy is the noise before defeat, as Sun Tzu, a Chinese general, wrote in his famous book The Art of War.
It is impossible to know whether you are successful if there are no criteria for evaluating the effectiveness of the editorial office, so called Key Performance Indicators (KPI). In most cases, these criteria are limited to two or three KPIs. They concern mainly financial results and the number of content units. However, the assessment of content quality, reader engagement, reader satisfaction, and trust in the media brand is not applied. We recommend assessing quality indicators and adding them to the list of KPIs when evaluating the effectiveness of the editorial office.
Take Your Money
Publications mostly earn money from advertising and get financial support from external sources. Some also provide services, including event organization, and sell content. Direct online sales of related products (books, movies) and branded products are not used. The collection of donations from readers is hardly used.
Unlike leading Western media, the share of alternative revenue sources of Ukrainian media is small, leaving them dependent on one or two sources of income. Following western practices, we recommend diversification of revenue sources so that none of them would exceed a third of the total revenue.
Unlike Ukrainian media, the Western media are noticeably more focused on selling content via digital subscription. We expect that in the future Ukrainian media will be forced to launch paywall models to compensate for the losses from the outflow of advertising budgets to search engines and social networks.
We also recommend learning how to earn money on events, as it is already successfully conducted by thematic niche media.
Value Your Brand
The main problem of Ukrainian media cost structure is an almost total absence of expenses on marketing and promotion of their own brand. Media is a value-driven business. Brand capitalization for further sale is one of the important business strategies, and the brand itself is one of the key resources for modern media. Well-known media brands easily find their way to top news-makers, they can afford salaries below the market level and ask for higher ad prices. However, media managers barely mention the need for brand promotion expenses in their conversations with researchers.
Risks and Opportunities
Global media crisis is also a new opportunity for development and transformation.
In Ukraine, publishers and journalists are trapped in a weak market, distorted by external donors and poor business practices. This has led to the drain of professionals from the market into related professions with better working conditions. The level of journalism has worsened, the confidence in the media has been lost. Simultaneously, this indicates a lack of proper evidence-based journalism. If one opens any rating of Ukrainian media and removes dubious media from it, there will be only a few media brands left.
We should also note that socio-political and business media ignore a big share of potential Ukrainian audience. Large professional groups and groups of people with relatively small incomes drop out of their attention. These people do not yet have their favorite socio-political or business media, so this is a big opportunity niche for new projects.
Who Was Interviewed?
The interviews were conducted from July to August 2019. Hereby is the list of media which agreed to give an interview in the random order: Бізнес.Цензор, Ліга.net, TheBabel (now – Babel), НВ.Бізнес, “Дзеркало тижня”, РБК-Україна, Kyiv Post, TSN.ua, Gagadget.com, Retailers.ua, Ports of Ukraine, “Наші гроші” (website), The Village Україна, Platfor.ma, район.in.ua (hyperlocal media network mostly in the west of Ukraine), The City (hyperlocal media network in Ukraine by the Local Media Development Agency «Abo»), “Запорізька правда”, “Накипіло” (Kharkiv).
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The authors do not work for, consult to, own shares in or receive funding from any company or organization that would benefit from this article, and have no relevant affiliations