It Looks Like The Business Side of Newspapers Is Finally Getting Its Act Together, Too

The American Press Institute (API), promoting an April seminar, sums up best what newspapers are now coming to terms with, “You’re facing the most challenging era media companies have ever known. Keeping your foot on the expense brake won’t make your year, and it won’t save your business. Newspapers face nothing less than total business reinvention in order to acquire new products, partners and audiences across multiple platforms that are changing business models.”

And it does seem that message is getting through. Newspapers are dealing with such questions as why, for instance, should a national advertiser pay more than a local advertiser? When newspaper advertising was at a peak why not gouge the out-of-town guys? Still true now that every penny counts?

Most rate cards charge a premium for national ads, but in truth many publishers now give it a wink and a nod, not so much because they like to, but rather the national ad buyers aren’t having that nonsense any more. And they know they are now holding the cards.

ftm background

USA Today’s Circulation May Have Dropped 1.3% In the Last Audit, But That Hasn’t Stopped It from Seeking a 6% Advertising Rate increase For 2007
USA Today has the highest US audited daily circulation at 2,269,509, but that’s a 1.3% drop from its previous audit. So how come it is asking its advertisers for a 6% increase for 2007?

Those Newspaper Publishers Who Believe It’s Business As Usual and January Means A 6% Hike In Advertising Rates Had Better Think Again
It’s a cycle that sees no end. Circulation drops, costs rise, revenues are flat and yet the business needs to maintain its 20% plus margins. But thankfully January is just around the corner so its fallback time -- raise those 2007 advertising rates by some 6%. But this time there’s a huge problem ahead -- many advertisers are going to give a whole new definition to the term “playing hardball”.

With Circulation Spiraling Down and Internet Advertising Increasing, What Is The Newspaper Industry’s Solution for a Financially Successful 2006? It’s to Hike Up Advertising Rates and Increase the Cover Price! When Will They Learn?
It’s really not rocket-science marketing. The number of eyes looking at your product is decreasing, and the advertisers who pay the bills are spending more elsewhere. In that type of environment what do you need to do to maintain and grow the cash flow? One might think the prime aim would be to entice new readers and new advertisers, but that doesn’t seem to be the trend as 2006 begins. The newspaper industry instead seems to be going back to last year’s formula that fell flat on its face – charge more for less.

Circulation Increases Four Times As Fast As The Internet Is Growing – No, Don’t Get All Excited -- It’s Visitors to Newspaper Web Sites. On the Other Hand, Maybe That Is Something to Get Excited About!
For all the really bad news about US newspaper circulation figures – down 1.2 million in the past six months – there was one piece of good news: the numbers show undeniably that newspaper web sites are the most frequently visited for news and information.

The Buzz Word for Newspapers Talking to Advertisers is No Longer “Circulation”; It’s “Readership” With “Quality” Close Behind
With many major newspapers suffering large circulation declines over the past few years, but still increasing their advertising rates, it seems only natural they no longer want to talk about circulation. No, the spin now is that advertisers should factor in how many people actually read a newspaper and whether they are the “right” people.

If a newspaper with falling circulation, and doing whatever it can to hold onto its large margins, won’t budge on its advertising rates, then there are plenty of other places that national ad go. If that means, for instance, that the newspaper now absorbs the agency fee for placing the ad, so be it.

In fact it all brings the very question of rate cards into question. At the best of times deals could be made outside the card, usually depending on volume, but publishers are no longer in the driving seat and to more and more any deal is worth more than no deal at all.

It’s rather like airplane seats -- once that plane has left the gate -- once that newspaper is off the press – there are no more sales for that flight/edition. Indeed it is the smart publisher who has learned from the travel industry and structures rates around capacity -- offering lower rates on those days that are usually weak like Mondays and charging higher on those days everyone wants in – Saturday, Sunday, Food Section day and the like.

In the past, publishers didn’t have to mess around doing things like that. Today, it is a whole new story.

And for those who still believe in holding to rate cards, then at least have a rate card that means something. If an advertiser wants a half page ad at $375 a column inch, how much does that cost? Beats me! Why not just have a rate card that says how much a half-page ad costs? And why not set up the advertising so it deals just in modular sizes like quarter page, half page, etc instead of column inches, prime placements and the like.

Those switches are already taking place. And it doesn’t take a born marketing genius to figure out that once you have a modular system you can adopt a pricing system that encourages the buyer to opt for the larger ads.

All the nonsense that aggravated buyers before about buying a premium space on discount, but they had to by a non-premium position, too, and all the like is starting to be thrown out of the window. Publishers are learning there really is something to the KISS principle (keep it simple, stupid).

The American Press Institute is in the midst of its $2 million study on simplifying the procedure for advertisers to spend money with newspapers. Advertisers are demanding easier ways of buying ads nationally for both print and online – one purchase for an ad printed in many group and independent newspapers and their web sites across the country. The problem, of course, is standardization.

The National Newspaper Association (NAA) has been working for more than a year on a project to come up with just such standardization but without success. “We’re just beginning to understand what those standards should be. One of the things advertisers mention when they talk about newspaper advertising is that they accept the value of it, but they say it is complicated to buy. There are 1,500 newspapers and lots of things are not standardized,” John Kimball, NAA marketing boss, said last year.

Interestingly, Kimball is part of a global Task Force that held its first meeting this month in Chicago to tackle the business challenges facing newspapers. According to Martha Stone, The World Association of Newspapers, representative, “We are addressing the ease of buying print but it’s too soon to talk about how this would be done since we haven’t polled the agencies yet for their feedback and partnership in improving the system.”

The Task Force has agreed to undertake a survey of hundreds of media buyers globally on their needs for a global print and digital metric, the results hopefully pointing the way to how newspapers and the agencies can work together for standardization.

Newspapers are already making deals with the “devil” – those very online classified sites that have taken so much of their print classified business away. Relationships have been announced with the like of Hotjobs (Yahoo) and Monster to cooperate via new joint web sites on a revenue share basis.

It all adds up to new ways that newspapers are conducting business. The key is looking at doing business from the consumer’s viewpoint. Publishers are beginning to ask themselves such questions as “What do you hire a newspaper to do for you?” and “Would you hire this newspaper to do the job for you, or is it just too difficult a sale?”

“Newspaper companies are on the threshold of a huge opportunity,” Steve Gray, managing director of the API project and a former managing publisher of the Christian Science Monitor, said when the API project was first announced. “If they (newspapers) move now to master the new ways that people can get and give information, they have the opportunity to meet more news and information needs for more consumers and businesses than ever before.”