Mini-publisher perspective: Measures of success and tracking progress in closing the gapsDouglas K. Smith, Quentin Hope, Tim Griggs, Knight-Lenfest Newsroom Initiative,
Bring together all the elements of success and sustainability in a mini-publisher “P&L scorecard”
The scorecard for a mini-publisher team has three parts: audience growth and value, market growth and share, and financial contribution.
The first two – audience and market performance – are based on earlier Table Stake scorecards: (1) the audience scorecard described in Table Stake #1; and, (2) the platform scorecard found in Table Stake #2. (See Section 7 of these Table Stake chapters.)
The financial portion of the scorecard measures a mini-publisher team’s contribution to economic and financial success – the P&L of that team’s effort.
This P&L is a managerial rather than strictly financial concept. It’s not aimed at complying with financial reporting obligations. Instead, it asks and measures how much cash does the mini-publisher team contribute to the enterprise as a whole – cash that’s left over after the costs of the team’s efforts are subtracted from the revenues the team generates.
For the mini-publisher scorecard this means counting two types of costs:
- Direct costs (e.g. staff assigned to the team or freelancer piece rate costs)
- Shared costs that can be allocated or attributed to the team’s efforts in ways that tie to the real work of the team as opposed to theoretically (for example, rent and benefits link directly while splitting and allocating the salary of the CEO does not).
If costs are controllable by the mini-publisher team and the choices they make, those costs should be allocated to them. Costs over which the team has zero control should not be allocated (again, for example, the CEO salary). Other costs to avoid allocating might include overhead costs for tech support, analytic services contracts, newsroom management, etc.
Similarly, two types of revenue should be attributed to the team’s efforts: direct and derived. Direct revenue is earned exclusively from the team’s audience, content, and other efforts, such as sponsorship of its content on a shared platform, advertising and sponsorship revenue on an exclusive platform, sale of content to third parties, and events directly related to the team.
Derived revenues are those reasonably attributable to the team’s efforts – for example, the team’s fair share of advertising on shared platforms based on traffic, digital subscription revenue from shared platforms based on audience loyalty and engagement factors, and splits of event revenue based on pre-agreements tied to level of involvement.
A team’s contribution to overall enterprise financial performance derives from comparing the expenses and revenues attributed to the team’s work. Mini-publisher teams, and the senior team to whom they report, can use the “contribution calculation” to track progress against team goals and objectives, identifying what’s working versus not working, and defining needed shifts and next steps.
In addition, the senior team should compare and contrast team performance across the entire portfolio of mini-publishing efforts to make and adjust critical choices for investment such as:
- Increasing investment for teams with high and/or fast growing potential
- Holding investment where the current audience is large with good contribution but low growth potential
- Reducing investment where the audience is large but has low value in terms of contribution
- Cutting or dropping investment if the audience is small and has low value in terms of contribution and growth potential.