Friday, June 23, 2006

Compromising National Security as a Marketing Strategy

Being a marketer by trade, I tend to see everything through the prism of marketing. To me, the recent article by the New York Times that revealed classified details about our efforts to uncover the banking connections that sustain global terrorism can only be explained as a marketing effort.

If you haven't seen it yet, Hugh Hewitt, Powerline, the National Review and Instapundit all have excellent summaries of the subject.

The New York Times is in a steep dive. Its circulation is dropping, its stock price is dropping, its gross income is flat and its net profits are declining 5-10% per year. All of this in the middle of an economic boom.

5 year chart of NYT stock price.

On its surface, the most recent article uncovering classified information doesn't make any sense at all. For one thing, it's an article about banking. Other than business types like myself, banking articles are MEGO articles. (My Eyes Glazed Over.) It doesn't break any new ground at all. The administration said repeatedly that it was working to roll up Al Qaeda's financial network. There is no question that it is legal to do so. The NYT article simply publicisized the classified details of a legal program that was known to exist.

In exchange for this, the risk of government court action is very real. Knowingly revealing classified information is a crime, plain and simple. The fact that the NYT was repeatedly requested by the government not to reveal these secrets condemns it further. Why would you print such an article?

I suggest that the NYT is hoping, praying, begging the Bush administration to take them to court. That stock price drop is no fluke. The NYT is an uncompetitive product. Unless they change consumers' attitudes, their revenue will continue to drop.

People who see all sources of information as equally good will, in time, drop those that cost money. I no longer subscribe to any newspapers at all. I can get everything I want on the Internet for free. The NYT has to make clear it's value proposition to the consumer. My bet is that they are positioning themselves as being the only news media large enough to uncover government scandals. They are appealing to the fear that in their absence, government agencies will run wild with corruption and deceit. The San Diego Union is currently running just such an ad campaign.

The New York Times does not have an efficient advertising channel to get this concept in front of the public quickly and easily. If the Bush administration takes them to court, the entire country will have it propped up in front of them day and night until well after the trial is over. All of the usual suspects will rally to their defense. The ACLU, the MSM news channels, other newspapers and the Democratic Party will broadcast that concept morning, noon and night. In one fell swoop, the NYT will execute a marketing campaign that it hopes will change consumer sentiment.

In order for the NYT and the other newspapers to survive, they have to change the public's perception from this:

"If I don't support big media, I will still be able to get my information from other sources without cost"

to this:

"If I don't support big media, there will be no one left to watch the government and all of my civil liberties will slowly erode away."

I can't think of any other reason to have printed that article.

Update: Thanks for the link, Anchoress! For those of you stopping by, please have a click around. I've had a really fun week blogging and I think you might like some of it.

Update 2: Zounds! An Instalanche and a Powerlinelanche! I'm not worthy! Thank you both. If you're visiting for the first time, please have a click around. We do posts on business, religion, cats, humor and politics. If you have a sudden twitch in your hand and accidentally click on the left hand column, I won't hold it against you. :-)

Update 6/26/06: Follow up post here.

Technorati tags:


Anonymous said...

Possibly. Certainly a govt prosecution of the NYT would generate humungous publicity. But would it really change anyone's mind about the paper? Those of us that consider the Times to be suffering Bush Derangement Syndrome will have our prejudices re enforced. Those who see the Times as a faithful watchdog barking at govt evil doing will have their prejudices re enforced.
Papers are bought by Mass transit commuters to give them something to read on the way to and from work. Car commuters get their daily news fix on the radio from PBS Morning Edition. As fewer people commute on mass transit, circulation will continue to drop.

Anonymous said...

Good to have it expressed so plainly, but otherwise nothing new. There are at least two other aspects:

--All the newspapers and other mass media long since went to the "car crash" model, in which they depend on sensationalism to attract readers. The problem with that is acclimation: if you depend on titillation, every new presentation must be more exciting than the last. Comic books and porn have the same problem. Once Superman has saved the Universe, or the squad of naked cheerleaders has had sex with polar bears, the next instance is bound to be less interesting.

--They consider "journalism" to be a separate profession whose practitioners learn primarily that and little about anything else. Business went through the same cycle half a century ago with the "man in the gray flannel suit" saying that "a good manager can manage anything." It didn't work for James J. Ling, and we seem to be seeing the endgame for the Press. "Reporters" writing stories about subjects they know nothing about except what Walter Winchell said about it years ago ultimately make so many mistakes that no one can take them seriously.

Ric Locke

Bruce said...

Based on this argument, the worst thing for the NYT is if the case is not prosecuted vigorously, but slowly and with long drawn out delays. Do it just slowly enough so that it always remains simmering, but not enough so that it boils over. And then the Administration should constantly drive the point home about the need for secrecy and initiate various programs to provide checks and balances in a responsible way, with the Democrats being involved.

Anonymous said...

I've taken my protest one step further. My local paper the Oregonian, of course is extremelly liberal, and gets many of it's bi-lines from the NYT and LAT. I've launched my protest by cancelling my subscription. I refuse to support any of these anti-American rags.

Anonymous said...

I think it more likely that the NYT has given up on being a paper of broad appeal and instead is trying to solidify its position among a particular target market; i.e., liberal readers.

Anonymous said...

An excellent insight which should be taken into account by many of us. To illustrate my particular viewpoint, here is a copy of the email I sent to the NY times:

"If nothing else, you have let loose many thousands of capable American minds who, like mine, work countless hours thinking about ways to legally and legitimately destroy your publication and business as thoroughly and quickly as possible."

Of course, the idea that the NY Times is some sort of bulwark against government tyranny is specious, but I suspect there is much truth in your assessment.

Anonymous said...

"If I don't support big media, there will be no one left to watch the government and all of my civil liberties will slowly erode away."

Being a law-abiding gun owner, I've always viewed big media as an enemy of my civil liberties.

And they didn't do such a good job as a watchdog for the other civil liberties when Clinton (ie - their guy) was in power.

K T Cat said...

Wow. These are all outstanding comments and I've learned a great deal from reading them and the emails you've sent me. Thanks!

I would suggest that the MSM see themselves as pursuing a higher calling. They really believe that second value proposition, that the public would be in deep trouble if they were gone. How do you convince others of that fact?

I wonder if they get continually frustrated with us as they rip the veil off of one government program after another and we fail to rise up in horror at our government's surveillance techniques.

It's clear that they are totally out of step with most of the population. Like most of us, I'll bet they shake their heads in disbelief every morning and wonder how we could be so stupid as to disagree with them.

That having been said, if they don't change the perception that the source of your information has no cost to you, they're toast.

rhhardin said...

I don't have a good theory of the NYT. But.

The product of news organizations is not news. It is you. They sell you to advertisers.

The only reliable audience that you can produce for advertisers every day, news or no
news, is soap opera women, which constitutes a minority of women but a big one (40%).

So every story is written for soap opera, which is based on soul-searching, inner struggle
and everlasting frustration.

Anything different drives away the key audience.

This audience edits the news for everybody every day.

Crash photos page four is good for men, but you don't pick up enough men to pay the bills.

Everybody says they want hard news, but it's not true. Think city council meetings.
There's no other business model that will work than soap opera.

So it's women, and soap opera for every story every day.

In this spectacularly true analysis, there comes the NYT. My impression is that they're
there to show the left how to connect the dots, the same way every day, and they rely
on the left coming to see them connected every day.

I'd be tempted to say : political girls! This is what you say to your friends. Except
my impression is that men read the paper too. Perhaps that was the old days I'm thinking
of. My father brought the paper home in the 50s.

You can of course connect soap opera to the left in general, as to cause and effect.

K T Cat said...

On TV it's a clear proposition - the audience is the product. WIth newspapers it's a little more complicated. For one thing, some revenue is derived from subscription purchases. For another, it's much harder to figure out who is seeing which ad.

TV ads are seen by the people watching the show. That's measurable. Newspaper ads are seen by people reading that page. That's much more difficult to measure. Ads are priced by size and location in the paper and the circulation count of the paper. After that, it's strictly hit or miss as to whether or not they generate business for the advertiser.

ptg said...

Don't sell the NYT short. You'll dilute my position.

K T Cat said...

I want to thank everyone for posting such intelligent and pleasant comments. I was just scoping out the Kos-TNR blogwar and was struck by the difference.

I've got to go out and dig irrigation trenches in my yard now. I won't be back for a few hours. Can I trust you kids to keep it civil?

If I come back and find any naughty language, there'll be no more posts on the MSM for a week!


Anonymous said...

Here is a link to regional publications owned by the NYT, from the NYT web site. As it happens, I grew up in Lakelend, Fla., and have family there still. I have encouraged them to cancel the Ledger. I figure plenty of people who wouldn't buy the Times, and therefore feel they can't have an effect by cancelling a subscription they don't have, probably haven't thought about the fact that they can send their message by cancelling their subscription to one of these.

Anonymous said...

Congratulations to anyone who cancels a subscription to the NYT. Unfortunately, that is not what you will hear from talk radio, conservative papers, conservatives on cable and large parts of conservative blogs. Yes, they will say the New York Times (which is primarily responsible for breaking this story at NYT Online) is far kooky Left, irresponsibly ideological and even treasonous. But even conservative outlets are still part of the media and they will not suggest that you cancel your subscription, that you boycott those who advertise in this liberal rag or patronize and encourage those who will not (i.e. GM). Why read or listen to someone rail on about the NYT if there is nothing they propose to do about it? This should provoke a massive fallout led by media conservatives, but people in glass houses ...

Anonymous said...

Scandals are the only thing keeping the paper from tanking.

If you visit Alexa, you'll note that since September 11th, the NYT's traffic has been steadily on the decline. It is temporarily abated if they can muster up an anti-Bush scandal.

Anonymous said...

Somehow the end got cut off...

Anonymous said...

I see that the 5 year stock chart for the Daily News' owner News Corporation hasn't been a great investment, but it's at least held steady at about $20.

I believe the NY Post is privately owned, but the owner is one of the richest people in the world.

Boghie said...

Could these clowns be thinking they are 'deterring' current and future litigation regarding their earlier exposes?

Do they think that a ‘leak-a-month’ threat will stop impending litigation over the leak of the NSA wiretaps?

Maybe the impending reveal of what a NYT unimpeachable source really is; a high level government official, a … I know Jason Blair faked his. I know Jason Leopold faked his. I know Dan Rather faked his (when he called a quack unimpeachable)…

Is it a media MAD policy?

Don’t they know they are dealing with the Bush Administration?

Anonymous said...

Not so fast... Dow Jones, publisher of the Wall Street Journal and ardent supporter of this administration, has also seen its value decline to less than half its value since Bush was elected.

Click Here for a chart

I wonder if the WSJ's dwindling stock price has anything to do with its cheerleading for this administration.

Naa... Just like the NYT, every newspaper is competing for ad revenue with internet sites while losing subscribers who are increasingly looking to the internet for news. This is reflected in the price. Unlike News Corp., Time Warner, and other media companies, the NYT doesn't have much presence out of newspaper publishing.

Also Since March 2005, The New York Times has inreased daily circulation while the Wall Street Journal and New York Post both declined.

K T Cat said...


Yep, the business model for the WSJ is the same as the NYT. What matters is what each is doing about it and why.

The WSJ has been pro-Republican since Sinclair Lewis wrote Babbit. I don't see that having an effect here.

Anonymous said...

Actually, the WSJ editorials support Repubs. The newspaper has been analyzed as more consistently liberal than other major papers.
I used to subscribe--I agree with the analysis. The business news is mostly straight, the political news is consistently left. Why? No clue.

defiant_infidel said...

KT: No need for thanx for linking to your EXCELLENT speculative post... Hell,thank you for making it available and possible! I have added you to my ever growing list of outstanding blogs to be watched for similar great, factual material. I love it Hot and Spicy!

Oh, and BTW, I also appreciate you reaffirming my proclaimed status in your comment... I guess "once an Infidel, always an Infidel", huh? (Sometime I will kick around my plans for 'Terrorist Traps' on the battlefield... er, uh, battle-desert?)