Three Things for May 21, 2021

Tim Eby | Public Impact Group

Welcome to the May 21th edition of the Three Things newsletter for public media leaders from the Public Impact Group. We’ll offer some observations this week on a recent Boston Consulting Group post on Zero-Based Media Organizations, discuss the pros and cons of a “fundraising obsession,” and examine how Congress addresses the crisis in local news.

THING ONE: BCG Advises Clients to Move to “The ZBB Media Mindset”

The folks at the Boston Consulting Group are some of the most strategic thinkers in the world when it comes to media. They’ve worked with countless media organizations, including NPR and others in public media, to help forge a sustainable future in this moment of digital transformation. NPR also regularly benefits from the expertise of BCG Senior Partner Neal Zuckerman, who serves as a public member of the NPR Board of Directors.

So when BCG published a piece earlier this month urging media companies to adopt zero-based budgeting (ZBB), it’s worth looking into how and why it might be worth taking this leap.

The concept of ZBB goes back 50 years. It provides a sense of transparency using a “bottom-up approach to managing costs” while also giving media organizations the flexibility to quickly reset their organizational priorities during this time of significant change in the competitive environment.

The BCG post is aimed primarily at the commercial television/OTT sector. Still, these concepts can be adapted for public radio since we’re facing many of the same competitive and cost pressures as our video counterparts.

ZBB brings an approach for public radio to consider when few organizations have the resources they need to produce as much quality content as they would like. We have to be focused on how we serve our audiences across our various platforms and link results (KPIs) with those strategic priorities.

BCG notes that content investments can still be carefully budgeted from the ground up, detailing specific outcomes that most public radio organizations don’t consider in their planning activities. This isn’t a new concept for the acquired content we buy from NPR, PRX, APM, and others. However, as our push to build out our local content initiatives has increased, few public media organizations have looked at its locally-produced content budget by considering the ultimate outcome: is it acquiring and retaining audiences across its various segments and distribution platforms, and what impact is that having in our community.?

In the end, our local content has to deliver audiences that will help sustain our service either by membership, sponsorship, or via philanthropy.

The ZBB approach can also be used in our revenue, marketing, and technology planning on an annual basis. It can be beneficial if you’re looking to eliminate some of the sacred cows that exist in nearly every budget.

It’s worth noting that given the uncertainty that’s occurred over the last 15 months, this approach, like all planning activities, is not a sure thing. However, ZBB is a concept worth considering to break the mold in our traditional budget planning efforts.

Ultimately it would be a breakthrough for our industry for more stations to work with Public Media Company and CDP in work they’re doing to understand its financial performance better as well as benchmarking with peers.

The BCG piece concludes with the following:

The media business looks—and operates—very differently than it did a decade or two ago. It’s time for operating models, organizations, and the budgeting process to catch up.

I couldn’t agree more.

THING TWO: A Provocation to Fish Where the Older Fish Are

A few years ago, I became aware of the Veritas Group when Greater Public brought them on board to work with Colorado Public Radio on a major giving pilot project and the CPB-funded Public Media Major Gift Academy. 

I like their consulting work because they aren’t afraid of being provocative in urging organizations to think and act differently in approaching their fundraising strategies.

That opinion was reinforced earlier this week with a post asking the question, “Why Are Fundraisers Obsessed with Younger Donors?” It’s a provocative question at a time when public media (and nearly the entire nonprofit sector) is looking to reach a younger and more diverse donor base.

First off, the authors, Richard Perry and Jeff Schreifels aren’t suggesting that we totally forget younger donors. In fact, donors under 35 are leading the way as first-time sustaining members at most stations. However, the point that Perry and Schreifels are making is really around the need for discipline, particularly in an organization’s major giving efforts.

Maintaining that discipline and focus on donors 57-75 years old shouldn’t be that shocking as they are in their prime giving years and have the disposable income to make significant philanthropic gifts. Data back this up:

• According to The Economist, households led by this generation spend $64K a year. That figure is 2x the spend by those born after 1997.

• In 2020, one segment of the Boomer generation – 65 and older – upped their online shopping 53% year over year.

The pandemic also resulted in older people becoming more internet-savvy through Zoom meetings and other digital engagements. Furthermore, the biggest growth in podcast listening in recent years, according to the 2021 Infinite Dial study, is with persons 55+.

It’s also worth noting that older adults have been traditionally ignored by Madison Avenue while having an enormous amount of financial and political influence. The Economist article noted that only 3% of ads in the U.S target people over 50 years old. Brands seem to be refocusing efforts to appeal to an older demographic, but most are playing catch-up to match the potential spending power from this group.

Given this data and the role that Boomers have historically played in bringing public radio to the place that it is today, Perry and Schreifels ideas should reinforce how continuing to cultivate this demographic is a smart strategy. A focus to pay it forward with this group via planned giving, endowment, and capacity-building campaigns can help pave the way to sustain the service for audiences well into the future.

THING THREE: Is Congress Truly Engaged in Addressing the Local News Crisis News?

Last week the Future of Local News Act was reintroduced by a bipartisan group of legislators. A quick look at the opening pages of the bill, which seeks to establish the Future of Local News Committee to examine and report on the role of local newsgathering in sustaining democracy in the United States, reads like a Case Statement for supporting our efforts in public radio to expand our local journalism.

This legislation, combined with the Journalism Competition and Preservation Act, aims to raise awareness in Congress about the crisis in local journalism across the county.

The JCPA was reintroduced in the House and Senate in March and would provide a limited antitrust safe harbor for news publishers to collectively negotiate with Facebook and Google for fair compensation for the use of their content. The talking points on the legislation from the News Media Alliance address many of the same points brought forth in the Future of Local News Act about the challenges facing local news publishers.

The JCPA is an interesting play for the newspaper industry as it’s, in some ways, seeking to turn back the clock in an attempt to capture revenue that Google and Facebook have siphoned off over the past 15 years.

These legislative efforts are coming on the heels of an extensive report released last fall from the office of Senator Maria Cantwell (D-WA) titled Local Journalism: America’s Most Trusted News Sources Threatened. This report describes in detail (67 pages worth including footnotes!) the crisis facing local news publishers. The narrative is a beneficial document for any station needing the inspiration to build their case for expanding their newsroom.

With some members of Congress now fully engaged in addressing the challenges facing local news organizations, how can public media further demonstrate that it deserves a larger place at the table in these conversations? Sadly, the only reference to public media in Sen. Cantwell’s report was this statement:

In some cases, newspapers are borrowing a tactic from public television and community radio by requesting donations directly from the readers who value their content most. The international newspaper the Guardian, for instance, includes a donation link at the bottom of each online article. More than one million people have donated to the Guardian, helping the company achieve profitability in 2019.

Perhaps it’s okay for public media to fly under the radar in these conversations and continue to focus on our recent major successes in the appropriations process - particularly with a $300M proposal for infrastructure on the table for Congress.

Nonetheless, it worries me that our major public media national organizations have not signed on to things like the Rebuild Local News coalition¹ The Rebuild Local News plan includes a major section on legislative support for local nonprofit media - you can read the full plan here.

With the growing interest in addressing the many challenges facing local journalism, this is the time for public radio to be bold in demonstrating that it can significantly help solve the crisis.

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1. NFCB is part of the coalition, as is the Institute of Nonprofit News, which has several public radio organizations as members.