The state of newspapers today

The Macy's mergers really killed papers in the Northeast, vis-a-vis advertising revenue.

 

The day of the merger, it has been estimated that metros lost 15-18% of their annual ad columns. In one day. Newspapers lost one whole chain. Then, the chain left standing, Macy's, had limited higher-end competition and not as much necessity to advertise.
Want a nightmare scenario? What if Macy's decides to shift their advertising strategy? Goes direct-mail only? Goes internet only? Goes Super Bowl only? Goes cable TV only?

EDIT: A friend and former sweatshop colleague sent me a note to tell me I was a little off on this one. It was about 15% of Section A's of Metros after the merger. He would know. And it makes plenty sense.

 

They already tried to cut back on their coupons and discounting strategy, but it failed. (Relatively) massively, too.

That's the only reason I don't see them dropping newsprint advertising in the near future. They've tried one major adjustment and it flopped. Think they'll be staying the course, for now.

 

That doesn't change the point that you can charge more for ads of any type if your paper has more readers. And if you have more readers you will have advertisers. Ad buyers want and need to be where their ads will be seen.

Do you seriously think that CraigsList has as many viewers as a metro daily?

 

Maybe. Maybe not. That's not the point.
Point is, that competition for classified advertising wasn't there five years ago. You can't charge more for a product fewer advertisers are willing to pay for.

 

The problem is not that the product is given away for free online. The problem -- and it's a problem for just about any industry that has held any sort of monopsony position -- is that when a disruptive change came along, the powers that be concentrated more on desperately holding onto what they had than adjusting to the new market reality. (In a stunning turn of events, many of newspapers' advertisers -- department stores chief among them -- fell to the same line of thinking.) Sure, now many are finally trying to figure out the Internet, but they also still act like clear-cutting the trees is the way to make the forest look more lush. Maybe every newspaper CEO and publisher needs to read, or watch, "The Magnificent Ambersons" to see how this story ends.

I feel for you, old tony, for being stuck in this position. But one thing going on, as well, is that newspapers can't necessarily charge more for ads, even if they have more readers, because a) the newspapers might not be the demographic the advertiser wants, and b) with so many other advertising options available, it's easier for advertisers to cobble together what they want in many different places for less than it might cost for a newspaper. And forget for a moment the free services like Craigslist, or places like eBay. You also have specialty sites like Sitter City, where you pay $39.95 for access to babysitters, nannies and the like who post their pics and resume online. How is a newspaper going to compete with that?

In almost everything, we are moving away from a model of one-size-fits-all -- witness the struggle of newspapers, department stores, legacy airlines and the like -- to mass customization, which the Internet has made that much easier. Someone ripped earlier on the effort for an online "paper" in Minneapolis, but what's to say that I couldn't go out tomorrow, start a site focusing on hyperlocal coverage of my little suburban area, build it to where I could sell ads from local folks, and make enough money to match what, say, the Daily Southtown would pay me to cover it? Talking Points Memo is a good example of a blog (BLOGS!) that developed into a newsgathering site with the specialty of left-leaning investigative work. Hey, with bookmarks or RSS, someone could add my hypothetical site to their daily reading, as well as whatever six or seven sites they like, and create their own "newspaper."

 

My dad was a career newspaper advertising man. Unfortunately, he's dead, so I can't ask him what he thinks about craigslist and all that. But he ran a classifieds section in his 40s and probably would have challenged the notion that it was "free money," as Fishwrapper says. The private-party ads were a bit labor-intensive because you needed to employ staff to handle the phones, type in the ads, proofread the ads. And, of course, there was only so much you could do to try to promote that kind of advertising and increase market share because you pretty much had to wait for clients to come to you. Most of the department's salesmanship energy went to servicing auto dealers and real estate agents, whose ads were considered classfied rather than display even if they were a full page -- and that money was no more free than any other display account. It took time, effort and skilled sales professionals to handle those accounts. What he called "free money" was the legal advertising -- because towns were required to run them and newspapers charge a premium for them.

My first lessons about the newspaper business, naturally, came through the eyes of an advertising man. We'd go on vacation somewhere and my dad would buy a copy of every local paper -- in those days there was daily competition in most markets. He'd say you could tell which paper was dominant by the size of its classifieds section. It wasn't always a direct correlation to the paper's circulation -- sometimes the papers were fairly even in size, yet readers still perceived one paper as being the better place to sell something because its readers were perceived as being wealthier. In New York, for example, the Daily News at one point had more than double the circulation of The New York Times, but the Times always had a much fatter classifieds section.

There was a lot written two years ago when the San Diego paper decided that classifieds were content that attracted readers -- a premise that I'm sure my dad would have agreed with -- and decided that in order to compete with craigslist, etc., that they would stop charging for private-party classifieds for merchandise under $5,000 -- a premise that I'm sure had my dad's ashes in an uproar, although maybe not since it wasn't his money being given away. I tried just now to Google and see how that was working in San Diego and I could see no recent followup, just some stuff a few months after the decision that declaried the experiment a success. However, I see on the paper's Web site that private-party classifieds for merchandise under $500 now cost $9 for three lines for three days. Why the switch back to paid? I have no idea, but I guess we can at least surmise that giving away the ads was not working for some reason, whatever that reason was.

What I take from it was that the price wasn't the issue. I think what we have is a world enchanted with a new technology and brainwashed to think that if you aren't in on it, you're going to lose out. It's understandable. It's new, people like new. But at some point advertisers have to ask themselves whether the most effective way to sell a product is on one of a gazillion Web sites or on what's still the largest local gathering point of any community, the local newspaper.

We're probably not going to get back the person who's trying to sell the waterbed he no longer wants, but I don't think that's such a big deal. My opinion is that the help-wanteds, auto dealers and real-estate agents will reevaluate their dalliance with online and realize that newspapers offer the most effective way to reach customers, as always. The legals have me worried, though. I think governments are going to decide that posting them on the town's Web site is just fine.

 

My father wasn't in newspapers. Couldn't tell you a hairline from a receding one.
Worked 33 years as a menial factory worker. A hardworking, high-school dropout. A proud man. He and my mother reared two upstanding sons.
On several occasions, it occurred to my father to sell the old [cog] that had been sitting out in the garage. He had one option. He picked up the phone, and for "$11 got 3 lines for 3 days."
See, Dad never had the option to list on EBay. Throw a paragraph on CraigsList. Or type up a few sentences for the community junk eboard.
In that sense, that monopolized, undivided sense, it was free money. Minus the typist, I suppose. But, nonetheless, the only game in town.

 

He did have the option of putting up a notice on the bulletin board at the supermarket. Lots of people did, and they sold cars and sofas that way and gave away cute little kitty-cats to a good home. And it was free. So there was always a free option besides newspaper classifieds.

Other people wanted to reach an entire community at once and they used a newspaper. Those people still do.

 

Oh, Frank. You're splitting hairs to support your argument.
Sure, he might do that to reach 117 people that might glance at a supermarket board. Those 117 people may or may not be interested in [cogs]. Or, he could list with the paper with an entire [cog] section with an audience going there searching for [cogs]. The choice an obvious one.

 

And they'll still find that the largest local marketplace is in the newspaper. That hasn't changed.

 

It is not giving it away for free that is killing circulation, it is immediacy.

For those looking to charge for it, your paper is going to get killed because it is losing its standing in the market as a vehicle to deliver news. I am at a family owned, our website is subpar and we are no longer a market leader in our news coverage. We still break important stories, but, we don't get credit for it anymore because only our subscribers can see it.

We haven't changed our news goals -- the quality is still there -- but we are declining. We no longer get the mentions on the radio, TV and people outside of our area have no idea who we are.

You have to put your content out there for free on the web to build branding and establish credibility.

There is no way around this. Our paper's profile has been marginalized the last couple of years because the website is there only because we have to.

I just think the fact is people don't think 50 cents is worth it anymore. It's the papers' faults. They aren't original and don't do interesting/investigative stories anymore. It's just information now, not writing.