At ILM 2014: Deseret’s Digital Transformation Test

Clark Gilbert is a respected authority on digital transformation — he’s studied it at the Harvard Business School and he’s put his ideas into action at Deseret Digital Media. Today at BIA/Kelsey’s Leading in Local – Interactive Local Media conference in San Francisco, Gilbert offered a checklist of milestones traditional media companies need to hit in order to declare themselves legitimately transformed.

No. 1: The average digital share of total revenue of a U.S. media company is 11 percent, according to Gilbert. “If that is all that it is, you have not transformed your company.” This lead to key indicator No. 2: “[Revenue] should be at least 33 percent from digital.”

Gilbert named three companies other than his own that are hitting that milestone. Forbes, Schibsted Media Group (a European media company) and Atlantic Media Group.

No. 3: Gilbert says a company should generate at least 50 percent of its digital revenue from sources other than display ads. Gilbert uses the term marketplaces. What falls into this bucket? Classifieds, deals, directories, listings, travel and booking. Another key, according to Gilbert, is to hire e-commerce experts, not digital advertising experts, to run these businesses.

No. 4: Gilbert contends a transforming business should be growing digital at by at least 15 percent annually. “If you are in single digits you have not transformed your business.”

Traditional media digital revenue growth has actually moved in the opposite direction, according to data Gilbert shared, showing digital growth declining from 10.9 percent in 2010 to 1.5 percent in 2013. “This is not a good trend line.”

Gilbert talked about the trap many media companies fall into, where they reach a “local peak” of growth through an approach of selling digital via the traditional organization, rather than building a new digital organization to grow the business, which is core to Gilbert’s playbook for digital transformation. At a certain point you can’t grow any more, Gilbert says, and the next move is to accept having to take a temporary step down (in order to change the sales model) in order to achieve sufficient long term growth.

Once disruption hits, less than 10 percent of the companies ever grow again from their peak, Gilbert said. Of those that do return to growth, he contends 100 percent have a separate sales organization to sell digital.

No. 5: Gilbert’s final key metric was 0 percent — the amount of time he says his digital people spend thinking about the traditional business.  “If you are not organized for that, you are not going to be able to adapt to the future.”

 

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At ILM 2014: Deseret's Digital Transformation Test

Clark Gilbert is a respected authority on digital transformation — he’s studied it at the Harvard Business School and he’s put his ideas into action at Deseret Digital Media. Today at BIA/Kelsey’s Leading in Local – Interactive Local Media conference in San Francisco, Gilbert offered a checklist of milestones traditional media companies need to hit in order to declare themselves legitimately transformed.

No. 1: The average digital share of total revenue of a U.S. media company is 11 percent, according to Gilbert. “If that is all that it is, you have not transformed your company.” This lead to key indicator No. 2: “[Revenue] should be at least 33 percent from digital.”

Gilbert named three companies other than his own that are hitting that milestone. Forbes, Schibsted Media Group (a European media company) and Atlantic Media Group.

No. 3: Gilbert says a company should generate at least 50 percent of its digital revenue from sources other than display ads. Gilbert uses the term marketplaces. What falls into this bucket? Classifieds, deals, directories, listings, travel and booking. Another key, according to Gilbert, is to hire e-commerce experts, not digital advertising experts, to run these businesses.

No. 4: Gilbert contends a transforming business should be growing digital at by at least 15 percent annually. “If you are in single digits you have not transformed your business.”

Traditional media digital revenue growth has actually moved in the opposite direction, according to data Gilbert shared, showing digital growth declining from 10.9 percent in 2010 to 1.5 percent in 2013. “This is not a good trend line.”

Gilbert talked about the trap many media companies fall into, where they reach a “local peak” of growth through an approach of selling digital via the traditional organization, rather than building a new digital organization to grow the business, which is core to Gilbert’s playbook for digital transformation. At a certain point you can’t grow any more, Gilbert says, and the next move is to accept having to take a temporary step down (in order to change the sales model) in order to achieve sufficient long term growth.

Once disruption hits, less than 10 percent of the companies ever grow again from their peak, Gilbert said. Of those that do return to growth, he contends 100 percent have a separate sales organization to sell digital.

No. 5: Gilbert’s final key metric was 0 percent — the amount of time he says his digital people spend thinking about the traditional business.  “If you are not organized for that, you are not going to be able to adapt to the future.”

 

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