A theory on the trouble at metros

[Frank_Ridgeway]

One thing I forgot to mention is that the recent fad of the daily newspaper starting "niche products" is a double-edged sword. On the one hand, it is an excellent defensive strategy in preventing someone else from starting a local mag, etc. But while it helps a company's bottom line, it hurts the bottom line of the daily. Each advertiser still has X dollars per year to spend on ads. If it starts spending in one of the niche products, usually at a far cheaper rate than the daily, there is a corresponding reduction of its advertising in the daily.

 

[Riddick]

Well, here's another one of my problems. ESPN and CNNSI are making money with their websites. Why aren't we?
I was talking to a stranger at a bar last night, and he said he's all for reading a newspaper on the Internet, but what good does it do us if we're not going to charge him for it.

 

[henryhenry]

content isn't the problem.

it's the business side. they're clueless.

 

[Sean Smyth]

Well, here's another one of my problems. ESPN and CNNSI are making money with their websites. Why aren't we?

Do we know that for fact? Or do the outlets in question view them as loss-leaders? Or do they benefit immeasurably for not trying to add a Web site onto an existing print business model?

 

[big green wahoo]

I think one of the key factors in how our industry and many others develop in the coming decade(s) is going to be who figures out how to make substantial advertising money off web sites. I have no ideas in that regard, however, and apparently most others are in the same boat.

Banner ads are just visual ``background noise'' and are rarely clicked on. Pop-up ads are either blocked or annoy readers. Emails sent to viewers who sign in are ignored or deleted.

I will be very interested to see who comes up with something else that works.

 

[Frank_Ridgeway]

Well, here's another one of my problems. ESPN and CNNSI are making money with their websites. Why aren't we?

Do we know that for fact?

I doubt they are. If they were, a newspaper would have kidnapped one of their employees and water-boarded him until he gave up the secret. And every newspaper would be doing it by now.

 

[Football_Bat]

Most of the suburbans I know are struggling too.

And you are exactly right about Alltel. We lost a writer right about the time K-Mart went tits up.

 

[2underpar]

in my shop, it seems they have gone away from local advertisers and trended toward national ads because they come in camera ready and it takes a lot of manpower hours to build the local ad for smaller businesse. also, they seem to have priced the little guys out of the market. I see tons of local advertisers and classifieds in the area shopper.

 

[pressmurphy]

Well, here's another one of my problems. ESPN and CNNSI are making money with their websites. Why aren't we?

Do we know that for fact?

I doubt they are. If they were, a newspaper would have kidnapped one of their employees and water-boarded him until he gave up the secret. And every newspaper would be doing it by now.

Big web sites make money. There comes a point at which economies of scale kick in and the difference in expenses between serving 1 billion page views a month or 1.2 billion are virtually nil. They sell the additional 200 million ad impressions at virtually no additional cost.

On the other hand, a newspaper whose circ goes up 20 percent incurs new expenses (newsprint at $700 per metric ton, additional mailroom hardware and employees, delivery fleet, etc.). Granted, there's a revenue upside as well (circ revenue, a pricier rate card), but the ROI still can't match the online ROI.

 

[pressmurphy]

content isn't the problem.

it's the business side. they're clueless.

I can think of some papers where content is in fact a problem -- too much wire, not enough hyper-local material that the competition can't match. The related question however is this: Did the content get worse because a business decision was made to cut resources, or did the resources get cut because the newsroom wasn't maximizing their use.

Don't let pride or ego cloud your thinking. I worked at a mid-sized metro that didn't do a very good job of getting the most from its newsroom staff and expense budget. Way too many writers who were doing their three or four stories a week when they could have been doing five or six.

That newsroom was virtually immune from personnel cuts at the same time circ and production departments were getting ravaged. It was only late last year that they started cutting newsroom positions, and there are still writers whose byline counts aren't where they should be considering what their beats and responsibilities are.

I don't mean to be ripping on writers or editors. I just think it's too convenient to blame the business side for being "clueless" when it's an indistry-wide problem (and not an isolated local one) that we're talking about.

 

[FuturaBold]

The ad people didn't do their forkin job. As times changed over the last 20 years, they didn't change their sales model and forked us all over. Instead, they became lazy, simply counting on advertisers to come to them instead of showing initiative, IMO.

I may be a bit biased because my dad worked in newspaper advertising. But he made most of his money on commission. He turned down a few feelers from larger papers because their salesmen received very small comissions while receiving much bigger guaranteed salaries than my dad did. He was confident in his ability to sell and did not want what was basically a company-imposed limit on how much he could make. But the fact is that newspapers that pay mostly by commission or pay mostly by salaries, they're both hurting now. Incentive doesn't seem to be making a difference. The fact is that my dad's old paper is a lot thinner because WalMart (etc.) has killed off the indy stores that were the bulk of that paper's advertisers.

I'm not an expert on advertising, but my understanding of my dad's creed was that a client wasn't someone to be fleeced, you wanted to advise them how to most effectively spend their advertising budget (and there is a yearly budget -- it is not a bottomless well). Just as reporters don't want to burn a source, a good salesperson is mindful of establishing and maintaining a relationship for the long haul. People here get pissy over an advertising department's inability or unwillingness to sell a high school football tab, but the fact is that the advertiser still is going to spend only X amount that year NO MATTER WHAT, and in some markets the football tab may not be the best use of the client's ad budget.

The other thing is there are advertisers that your paper really doesn't want. A free weekly started when I was a kid and my dad said, "Yeah, they have all the advertisers who don't pay their bills." (The weekly died pretty quickly.) You may see local stores that you believe should be approached by the ad department, but chances are that they know something you don't. A salesperson who gives away precious newsprint to a store that isn't going to pay for it isn't going to keep his job very long.

If he were alive, my dad would hate what's going on now because he was keenly aware that while some of his job was within his power, to some extent his effectiveness was enhanced or worsened by a strong news product, dependable delivery, quality printing. Cutbacks in the newsroom affect the product and affect the ability of advertising people to sell ads and circulation department to sell subscriptions, and then it becomes a vicious cycle of chicken-and-egg.

I'd place the blame higher than the advertising department.

I appreciated this post a lot, Frank ... the problem now in our shop is that there isn't much value on the salespeople building those relationships, etc. It's just "sell, sell, sell -- we need the money!"

Our ad rep came to me one day all in a panic (I'm the sports editor). "We've got to have something, anything to sell in June. What can we do sports-related that might sell? Corporate says we're short on revenue."

In that panic atmosphere, how is any ad rep going to come across looking like they care about their clients? All because corporate screams that we're not making enough $$$ to satisfy their investors... Yes, I'd put the blame higher up the chain as well...

 

[FuturaBold]

also, they seem to have priced the little guys out of the market. I see tons of local advertisers and classifieds in the area shopper.

again, I agree with this ... I'm on the leadership team of a local church basketball league. We wanted to run an ad promoting sign-ups for the next season. The league director wanted to make a "big splash". I looked into a quarter-page ad, at non-profit rate, at our shop and it cost like $1,000 (we're a non-daily). There's no way we can afford that. We went with a tiny, no-splash ad (still a hefty price) and focused on getting the word out through brochures, etc. at the schools...