USA Today's marketing strategies and digital transformation challenges

USA Today

Summary of Marketing Issues and Strategies

Founded in 1982 based on the availability of news in real-time from satellite feeds, Gannett invested heavily in USA Today. With small circulation initially, the paper was widely criticized for lacking content and depth of editorial coverage, with many calling it the McPaper. Despite these criticisms, however, Allen Nueharth was prescient in seeing that the time that many people had to stay informed was about to drastically accelerate. Business travelers, many of them new and sports junkies, didn't need the depth of intellectual coverage the New York Times provided and didn't want the in-depth analysis of the Wall Street Journal. With an average issue reading time of 25 minutes, USA Today was perfect for the commuter who wanted to read the paper on the train to work in the morning. Despite the predictions of Mr. Nueharth, the paper took approximately five years to become profitable. USA Today executives continue to aggressively promote the brand completing both a BusCapade and AirCapade to promote the paper. The BusCapade is in North America and the AirCapade is globally-focused, with both resulting in increases in readership. USA Today's senior management is also quick to move online with USAToday.com, the adoption of device-based readership clients as diverse as the Amazon Kindle to the Apple iPad, and support for a multitude of content delivery strategies. All of these technology areas further underscore how the company views the speed and alacrity of information delivery as a critical success factor, and one they excel at. Despite all of these strategies the demographics are making their business increasingly less likely to growing, with the total advertising for newspapers down 16.6% to $7.5B and print advertising down 17.7%. USA Today faces the challenge of re-inventing itself in the midst of a complete change in strategic direction brought about by speed of technology on the one hand and aging customer base on the other.

SWOT Analysis

Strengths

1. Rapid growth from 350,000 subscribers in 1982 to 2.1 million in 1996, progressing to 2.2M in 2022 and 2.25 million in 2008.

2. Part of the Gannett Company which has 14 million readers every weekday and 12.6 million readers every Sunday.

3. Exceptionally strong brand and share of customer success with marketing strategies.

4. Senior management that was prescient enough to see how time would be in very short supply in the latter part of the 20th century, and designed an effective news delivery strategy that could capitalize on it.

Weaknesses

1. Demographics are working against USA Today as the Matures (59+) are most likely to read a newspaper (80%) are aging quickly and within ten years will be replaced with the Baby Boomers who read a paper 75% of the time.

2. The shift to non-traditional publishing platforms and content consumption devices including iPads, tablet PCs and smartphones is accelerating faster than USA Today anticipated and there is not a viable strategy in place to deal with this.

3. Democratization of the Internet and blogging is making the entire area of news capture and dissemination increasingly difficult to manage and deal with. For USA Today the challenging aspects of this will be recruiting enough bloggers of high enough quality to further differentiate their content delivery strategy.

4. Shrinking advertising revenues throughout the industry will force consolidation of national papers, and will also drive down overall market capitalization levels of all companies. USA Today is seeing this in their advertising revenues in the case study.

Problem Statement

USA Today faces the challenge of strategically re-inventing itself and growing its share of customer while attracting new subscribers from the Echo Boomers and Gen X segments.

Three Strategic Alternatives

1. Create a news aggregation and customization service focused on the individual needs of the Echo Boomers and Gen X markets. Make the selections more psychographically focused.

2. Play the role of industry consolidator and start buying up other companies, like Oracle is doing in the enterprise software industry. This could include buying Yahoo very cheap.

3. Create a spin-off to create entirely new technologies for information delivery including creating an alliance with Google for context-based computing in Google Glass, the new innovation that shows contextual search in real-time.

Strategic Recommendation

Pursue a very targeted Echo Boomer strategy aimed at the highest per capita incomes of news and sports junkies and license the Google Glass technology to create glasses that automatically create contextual search based on surrounding coordinates. This is a video of Google Glass: http://www.youtube.com/watch?v=9c6W4CCU9M4

Marketing Implementation

Pursue the strategy of being the most forward-thinking content providers globally by partnering with Google on Google Glass and target the most affluent members of the Echo Boomers and Gen X segments. Realize that change will be slow for even the most progressive Matures and Baby Boomers and USA Today has no time to lose.