What a difference a few years can make.
Imagine if the New York Times (NYSE:NYT) had been one of the first papers to sell front-page space to advertisers in 2005? It was one thing for USA Today (NYSE:GCI), a paper so totally comfortable with commerce, to put ads on Page One, which it did in 1999. But the Times - that was something other did, not them.
Now in January, 2009, in the belly of the beast, the Times' decision to start the year with a two-and-a-half-inches-high tasteful CBS ad prompts more of a yawn than anything else. Like the Times' dividend cut, its move to re-brand the International Herald Tribune online as the New York Times and its various moves to reach beyond the Times staff for content (Freakonomics and other non-staff blogs, now Times Extra), we can say "good, but what took ya so long?" Decision-making does appear to have picked up steam at the Times over the last year, and that's to the good, given the financial vise tightening each month around the company's neck.
According to the New York Post, the new front-page ad will fetch about $75,000 daily and $100,000 Sunday. That's good money; figure each ad can help pay most of the freight for the care and feeding of one reporter. That makes the decision an easy and a good one. In the past, the Times felt it could sniff and say, "we declined to do that because we thought it cheapened the front page," as new Washington Post (WPO) publisher Katharine Weymouth told AdAge in response to the Times' move. Now it is simply a case of the Times, famished for ad revenue -- it was down 21% in the November -- doing what a hungry person does: eat when offered food.
We don't know of course how much of the new ad revenue is really incremental; some's bound to be "switch," but some is. Wouldn't Times readers rather have kept some of the more than 50 editorial staffers let go in the spring, 2008 buyout, and have seen ads pop up earlier on Page One? Wouldn't Washington Post readers gladly trade an ad for a half-dozen or so reporters at the Post, which itself lost 100 editorial staffers to buyouts last spring as well?
There are hard, painful decisions to make in these dark days of daily journalism. Front-page ads, though, shouldn't be one of them. As readers, we get it. Newspapers need the money, and, readers are mature enough to know that putting one on Page One doesn't affect the integrity of journalism.
Whole categories of ads are falling by the wayside. Double-truck ads -- the gravy trains of years past -- have shriveled up. With the US car industry in the empty tank, there are so many fewer colorful "hot dogs-and-bring-the-kids down Saturday" car dealer ads as to make you nostalgic for the garish eyefuls.
Ironically, on the same day, the Times plopped an ad on Page One, JP Morgan plopped a 340-page PDF on the web, entitled "Nothing But Net." Outlining every nuance of online from rich media to Russia, it makes a point transcendently important to the news industry. Online in 2009, it expects pay-for-performance ads (largely paid search) to grow 10 percent to nearly $16 billion, while display ads (largely sold on cost per thousand (CPM), or we-give-you-the-eyeballs-good-luck-making-them-customers-basis) growing only 6.3 percent to $8.4 billion.
Those numbers -- part of continuing trend -- point out another key trouble for news companies in the next couple of years. In print and online, they've geared their sales to display, cost-per-thousand ads, selling first circulation, and now readership. The greatest growth, though, is in pay-for-performance in which ad sellers share more risk -- and may gain more reward -- with their buyers.
So, for now, good luck to the Times in selling more Page One ads; there was none Tuesday morning, on Day 2. It will need to grasp any advantage, every attention-getter for marketers now offered myriad choices in reaching customers.