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One-Third of Web Users Visit Newspaper Sites

You are right on the money Joe! Thanks for posting the inma link. I've been out of the biz for a few years now- had not seen the article. I am very familiar with the Denver operations....and the article was spot on!

One-Third of Web Users Visit Newspaper Sites

As always, you have to be sure you know something about the source of information. How the question is asked can lead to a desired answer (read "Nudge" by Cass Sustien). In this case, MORI has long been used by the newspaper industry to conduct surveys.

That being said, it is no surprise that so many internet users read online newspapers. Makes perfect sense. Information seekers are looking for information. Newspapers have a lot of new content every day.

The other truth, newspapers usually reach more homes in any market than any single TV, Radio, or other medium. Advertising in any newspaper will normally reach more homes than any other single local medium.

The problem with the web/print connection is that the ability to reach local customers with advertising in a meaningful way is still in transition. Web readers are looking for the information, and try to do it without intrusion of advertising (pop up blockers, RSS, and others). Print advertising had effectively priced itself out of the reach of small local business. The infra structure of the printed piece is just expensive, slow, and aging (many presses are over 30 years old). Without significant local advertising, a newspaper is forced to depend more and more on regional and national large budget advertisers. They are extremely volatile in a rough economy.

Right now, local newspapers are feverishly working to monetize local advertisers both in print and on the web. The hurtle is their recent past. The local effort was largely ignored for about 10 years, in favor of the large advertiser. Proof of this was in rate structure, which gave huge discounts to large budgets, and much higher CPM to locals. That gave rise to new competition, like shoppers, direct mail, niche weeklies, that have claimed a large portion of those small local businesses.

The survey shows about the same information as it has for the past 20 years....newspapers have lots of readers, and their advertising reaches lots of consumers. This information is about the same as it would have shown in the mid 90's. The NAA ran a self promotion campaign about 3 years ago touting the results of a survey similar to this. The issues remain exactly the same...how to get local advertisers back? It's obvious that this survey provided the newspaper information it wanted to hear, or else it would never have been released. In essence, nothing materially new in this survey. Slightly more depth, some different metrics, very similar results. The results will be rolled out to local sales staffs everywhere, as if this information itself will convince the local advertiser that they should abandon everything and come back. Been done many many times....It's not that the info is flawed, it's not. It's understanding that the information is not new- and knowing that using it same old way will not change anything. Current executives will feel good about the information, and likely presume that simply integrating it into local sales presentations is enough.

Unless the paradigm changes, nothing new will result from the use of the information. I hope they realize this before it's too late...newpapers used to be a stable business and good community partner. They will be missed....but they have to wake up very soon, or it will all be gone!

Bad News for the News Industry

When a 20 year old kid, with a $1,300 budget does what Mike Wallace and 60 minutes USED to do....it puts the entire decline in such a perfect box...tied with a bow. Why are the so called " real" journalists not asking deeper questions....why are they focused on the kid? What if the kid is CORRECT??? Why is the big budget professional media machine not looking real deep into the tentacles of ACORN...and more importantly, the politicians that have benefitted from ACORN. If there are none....is THAT not a story as well?? This story just puts a big huge spotlight on how inept media is now...and explains the declines without saying a word! Keep ignoring.....we will keep not buying your papers, and not watching your newscast.....

Newspapers: Three Nails, One Coffin

"Slight" erosion??? If you mean small loss between fasfax reports...that is slight. If you mean the steady decline over the past ten years or so....it's anything but "slight". It's catastrophic. Especially in metros. Check your most recent ABC circ numbers....DEDUCT all NIE, single copy, and non paid circulation. Compare to 1999. You are NSA, and are well known for removing single copy circ from your buys, and zoning out areas near the outer boundaries of the RTZ...because the density does not meet your clients desire for ROI

It is a long known that the farther you move from the City Zone center, the lower the circulation home delivery number, in the vast majority of cities. Many dailies have expanded their reported City Zone in their ABC to artificially inflate the suburb number, using the far denser City Zone numbers averaged out.

I will concede that the defined suburb will be different..., market to market. Amend "most" to "many". In major metros, the suburbs expand up to 50 miles away. In small towns, that distance is much smaller. In those instances, SOME of the suburbs might be legitimately within a City Zone. In most major cities, many of the most affluent suburbs are well outside the City Zone...and the Retail Trade Zone (EXCLUDING the City Zone, and NIE and all other Single Copy) are FAR below the numbers of the City Zone. Many dailies have TMC's that cover non subscribers because their density shrunk so low that they had to. Most national advertisers (and Media Buying companies) did not place ads in those TMC- because it was not paid.

Your customers wanted to trim expense, and believe that a lot of single copy just can't be verified as legit- due to NIE and event sales reported as average daily paid- (which artificially inflates paid numbers). They began zoning out single copy years ago. I've been out of the biz for several years, and the practice may have changed in some areas- but I suspect it has not.

Valassis is absolutely a competitor to newspapers- and they take as much national business as they can.. Newspapers were very short sighted during the rise of Valassis...and took them (and the national coupons) either free, or so cheap it actually LOST money.

As a sidenote...I no longer have access to ABC numbers, and do not have the vast research capabilities of the NSA...but I will take an educated guess that almost all newspapers have seen very significant drops in home delivered paid circulation. Advertisers vote with their feet...and judging by the draconian drop in the stock price and market caps of newspaper companies...they have voted.

Newspapers: Three Nails, One Coffin

The move by Valassis and movies are even more insidious...

When I was in the biz, many newspapers took the Valassis insert package for FREE. I knew of some that paid Valassis to get them! The reason was readership. Same with movies. Without the coupon package on the weekend, a very significant number of people will stop subscribing...which will increase the death spiral.

Moving to direct mail is more a function distribution control. Advertisers want high propensity geography, with minimal waste. Most newspapers now have less than 50% circulation in the core area, and less than 20% in the suburbs. Too much missed opportunity at too high a price. Right now, that works due to the ability of carrier route distribution. As the USPS becomes less viable, the government will be forced to increase prices dramatically- which will drive these advertisers online....and harm Valassis. It's not a matter of "if"....but actually "when".

Print Ad Losses to the Internet: It Ain't Over Yet

No question that currently the printed insert works much better right now. SEM (NOT SEO) will and is changing the game. SEO is "optimization". SEM attaches search parameters to information. Imagine if Best Buy suddenly decides that they can now target potential customers like this...."income over 100,000, TV over 5 yrs old, NO HD in home"....and then an email goes to them advertising all things HD TV and accessories, and the Geeks set it up TOMORROW. Or a supermarket that can find customers that regularly buy imported cheese..you get the picture. Right now, it still works to send out a mass advertisement to general population (I know that newspapers can "zone" but it still is not address or product specific) and it will take weeks for mass retailers to print and meet newspaper advance deadlines. The model of FSI begins to break down when critical mass is no longer a given. As circulation drops, that is inevitable. The best newspaper customers continually age, and drop out of the buying categories, That is also a fact, and inevitable. Urban areas have already seen it at faster decline rates. I live in the Pittsburgh area, and supermarkets are now out of both newspapers- have been for years. Several other traditional have followed them. They are now using marriage mail. That trend will continue and accelerate. The time is right now for newspaper execs to look in the mirror...accept that change is now here....and invest in the future. The good old days of market domination are not coming back. The sooner that is internalized, and real commitment to new emerging methods are started....the more likely they are to survive.

Family owned papers seem to realize this fact, and they seem to be moving quicker. Unfortunately, big media companies have bought most of those in the last decade. The exec there is very unlikely to champion anything that their superiors did not approve first. Innovation was squashed years ago, and the middle level possible innovators were either pushed out of companies, or made fearful of losing a job for speaking up, or act locally without bucking a large bureaucracy at corporate. And much worse- the high salary execs have been eliminating those people in their companies most likely to come up with the "new idea".

Time to re think the model. While there is still decent income and some time to do it. I predict that the immediate answer will be to fire another 10-20% of the workforce....because high salary execs will try the old way..."cut to profitability" without a real commitment to change anything of real substance. I've been out of the business for a few years, and it really hurts to see my industry commit suicide.


On Jul 15 09:38 AM NSA_Randy wrote:

> They are trying, but have found that nothing drives sales like FSIs.
> It is way too early to write off printed FSIs or newspapers for that
> matter. Email and SEO may be cheaper, but they drive a lot less footsteps
> to the store.

Print Ad Losses to the Internet: It Ain't Over Yet

Regarding FSI's....they are under extinction watch as well. Right now, traditional pre-print advertisers are aggressively looking for more effective and less expensive methods. Supermarkets entice by using membershop cards- and opt in email delivery of their flier. The real beauty- it's not a far leap to tailor that message to exactly the customers most likely to buy specific products. High end products to high end customers with a buying history for example (Wegmans already does this),

I get both Target and Best Buy in similar fashion. It is not very hard to merge that knowledge with SEM...and look out insert marketers.

Thank Al Gore again for giving the retailer a huge tax penalty (Cap & Trade) for using carbon to print and then truck the insert across the country. The cost of printing and trucking alone is in the billions annually. Even without Cap & Trade, the incentive to stop printing and trucking is HUGE!

What fraction of the savings will it cost to convert to opt in email, and search engine marketing to fund the conversion- especially if Cap & Trade passes? How many unemployed tech types are working on this right now? How many newpapers execs would not listen 5 years ago when the idea was brought to them?

Print Ad Losses to the Internet: It Ain't Over Yet

You mean all of our troubles are the fault of the internet? Thank Al Gore for inventing it...and then inventing the next cause of economic calamity- Global Warming...the biggest boondoggle ever perpetuated by uninformed media types. These weird sun spots...funny how the media just ignores the credible experts. (like the EPA and all others). Just like business ignoring the rise of the internet.

Sorry....the comment writer caused my victim reflex to engage. I'm glad to know that I am not at fault...it's the internet.

The internet has provided a new paradigm. During it's rise, most newspapers had the opportunity to own and control huge swaths of it. They had money, and control of the content. I actually had a newspaper owner tell me (in 1995) that the internet is the enemy- never bring it up again. We were being offered a partnership in an ISP that only wanted to place their servers in our warehouse! We would have owned all the content AND the only method of distribution...for FREE! I mention this, because it was a pattern I saw for almost 20 years with newspapers. Arrogance that they could always control or crush the internet. Continued raising of classified rates to private party, failure to use the content for the benefit of consumers and themselves caused new industries to proliferate (craigslist, angies list, and others). The internet is NOT the bad guy...it is the wave that changes the way we do business. We will adjust over time. The music industry is a great example of that adjustment- thank Steve Jobs for saving the business from pirates! But old time music execs want the "good ole days" back.

Like the famous song...."Arrogance Killed the Newspaper Star" and they have no one to blame but themselves. High level, no vision execs squashed innovation. The market will eventually flush them. Kind of like our current government execs with no business experience running the economy. That seems to be working well too...WE are to blame for that as well...not the internet!

Follow Mr Jarvis- his articles are really spot on 90% of the time! The other 10% is because he comes from the content side of the business- not the revenue generating side.

Saving Newspapers: Put Humpty Dumpty Back Together

Jbofen's comment is almost verbatim from a promo ad campaign designed by the NAA...Newspaper Association of America. I ran the campaign in my newspapers too. The numbers in 2004-2006 were in decline, and the campaign was designed to provide a wake up call for the advertising world....as you can see, it worked really well...and newspaper publishers believed it...so they continued to gut their content....you see the result.

Saving Newspapers: Put Humpty Dumpty Back Together

Full Metal has it exactly right. I have worked at several dailies over the past 26 years. Lee included in that mix. Also MediaNEWS. Ogden too. The corporate mentality at each of them varies significantly. Lee favors accountant types at the top layers of the company, and many of the publishers at their properties are accounting types. Controllers at Lee have had a huge say at each property. Accounting types have a bias to tight cost control first, and limited vision as to content, or community integration. They know how to preserve money, but limited vision as to serving their community. MediaNEWS has a very aggressive approach to the business. They know that local news is the key, and allow publishers at local properties to build good papers. Their weakness is over aggressive growth, too fast, and spread the resources. Dean Singleton has vision, and never, ever, be opposite him in a fight. He will bet the entire company on his vision, and his opponent will absolutely lose. He may also spend way too much to win, and cripple both newspapers in the battle. His newspapers have at their core the right concept. Own local news, and own the market. Ogden has an incredibly adept concept. Essentially, they are a family owned company- just bigger than most. Be a great local citizen, focus completely on the local community. Don't over reach....be fantastic at local, local, local. Think small communities, serve them well, think long term. They tend to be centrally managed from corporate (Wheeling Wv.) The top leadership keeps close contact and ties with each property, but each paper retains the local flavor of each community...meaning if the community has a right tilt, so will that paper....same for left. The managing editor and publisher have a more equal sway with corporate. An excellent company that no one knows well- but will likely come out of this in much better shape that their more glitzy counterparts- because they don't leverage their company!

Lee spent heavily on internet service, but has no real vision....so they are now paying the price for it, and will likely flame out as soon as creditors finally give up and stop delaying the inevitable. MediaNEWS has a great leader in Singleton, and if anyone can find a way to monetize the web nationally I'd put my money on him. If he hasn't over leveraged already- not giving him time to figure it out. Ogden will focus their web locally, and will win that war one small town at a time. It won't be glitzy or flashy, but it will work...and I'll bet they find a way to transition as their communities require or demand it.

Four Fundamental Changes to the Communications Industry

Hopefully a lot of people read this...because you are right on the money! I've been in the newspaper business about 26 years...having left about 2 years ago.

As a testament to the legacy of professional journalism- too many think that because it's in print, on paper or digital....it must be true. Very dangerous with the plain fact anyone with a computer can be a blogger.

THANKS FOR WRITING ON THIS!

A Sad Day for Newspapers

I worked in the newspaper business for about 26 years- most of it as an executive manager (Advertising Director). I can tell you from one sitting in the meetings with the highest levels of management, that the real reason for demise is those executives. The method and execution of decisions made back in the late 90's were the beginning of the end.

Family owned newspapers began to sell to corporations, like MediaNEWS, Lee Enterprises, CNHI, Thompson, and others. The long time seasoned (and mostly independent) journalists began to be forced into a more "corporate" posture in order to stay employed.

About 2002, due to the downward revenues caused by 9/11, those corporations began to shift the management direction. Prior to that, most upper level managers (Publishers and above) were primarily groomed from either the Newsroom or Advertising. After 9/11, most managers were advancing out of the Accounting disciplines.

Accountants are far more focused (because of bonus compensation) to operating profits for the next 12 months, and the current month. Trimming expenses added to the operating margins, and increased bonus. For the huge majority of those corporate owned local newspapers, the quality of content was not a high priority. They SAID is was the prime priority, in the closed door meetings, and to the public, but the actions and execution did not support that posture.

The accountantss were not willing to support the salaries of what a seasoned news professional earned at that time. They instead allowed those seasoned pros to drift away...the people that were the mentors for new journalists out of school. Most importantly, they were the editors at those newspapers, and made those new folks dig for facts that supported supported the story. Far less bias, far more quality information.

As a consequence of seasoned professionals leaving (in many cases, fired) those young (and much lower salaried) reporters are now elevated to editors- in some cases very high level editors. Low experienced editors are then forced to deal with a Publisher that is focused on expense reduction- which means they want to shrink the "news hole" in favor of a greater advertising to "non paid" space.

The new editor does not stand up for journalism, because they want to remain employed. They allow that corporation to eliminate as much cost as requested (the reporter and photographer). The smaller news hole is harder and harder to fill, so they begin to use more and more Associated Press (AP) and national syndication. The natural bias of an inexperienced young editor helps steer the choices of content to fill that news hole. The Accounting back ground Publisher or Regional VP does not care one bit about the content- only the expense saving, Operating Profit Margin of that newspaper or group of newspapers.

The short sighted high level execs focus only on the current month, quarter, and fiscal year for their own bonus. The internet begins to creep into slowly declining circulation numbers. The bleeding is very slow- so they do many short term and cosmetic things to make the circulation bleeding appear minor (Newspaper in Education NIA). The exec (who also gets a bonus for circ numbers) ignores the reason the newspapers' circ is dropping- which is content.

Finally, the slow bleeding has lowered the circ numbers to a point that superficial measures no longer work- and now the bleeding speeds up. The lowered circulation means less response for advertisers (who have paid higher and higher rates for less). A strong recession hits, which affects the advertisers that have carried the newspaper. The newspaper execs have long ago abandoned those other advertisiers....which caused even more expense cuts, which made the entire problem even worse.

Because the executive heavily leveraged the corporation to buy as many papers as possible. They did NOT buy them to control news- that is a fact. They bought them to make money...that leverage is now killing them quickly,

So....you'll find that most newspapers across the country are not trying to control the news- they don't really care. That is even worse. They have inexperienced people who suddenly have control of a message, and they have no idea of the responsibility that requires. The top execs just do not care- which causes the local consumer to cancel that subscription. Which makes it all worse!

Long...but maybe it helps readers and bloggers understand more. I am commenting on the huge number of local newspapers in the country- NOT some of the major metros, like NYT etc. They have very similar stories, but are sometimes controlled by very wealthy owners who simply want their viewpoint carried- and still make a profit. The much greater number of smaller dailies and weeklies are much more influential collectively.

Newspaper Ad Revenues Gaining Downhill Momentum; Online Struggling Too

As a 20 plus year veteran of the Newspaper industry...as an Advertising Management professional (Daily and Weekly, Shoppers, Family Owned, and Corporate Owned) I have an insiders opinion.

Newspaper revenues have been self inflicted wounds. Family owned newspapers in smaller markets are in much better shape than newspapers in markets owned by corporations or large groups. Many of the problems can be repaired, or at least the declines arrested.

The main issues can be laid at the feet of top executives and publishers. Therefore, the problems can be corrected by examining them, and probably removing most of them.

The problem....lack of long term vision, and the wrong skill set to correct them. Corporate newspapers have valued only the immediate months' Operating Profit, and designed compensation programs accordingly. Corporate directors receive bonus payments based on either annual or divisional factors. This system has focused on the very short term performance financially.

Virtually no focus is placed on the fundamentals of the business. Adding to this, high level managers at the local and corporate level have changed in professional fields of expertise. Over the past 10 years, most local publishers and higher corporate types are now financial managers- accountants- not Editors, Advertising, or Circulation types. Think of that for a moment, and you can begin to see a large part of the long term problem.

Newspapers have traditionally attracted people interested in reading news that is important to them. Advertising was strong, because local advertisers could rely on both strong readership of their ads, and affordable ad rates that reflected return on investment. Both have been seriously eroded, and may be too late to correct.

Readership has been eroded, because senior management directed focus on short term bonus' for themselves. Examples...the refusal to invest resources and time for local Circulation managers to build home delivery services of newspapers. Instead, a practice of artificially "puffing" circulation is the focus. Almost all newspapers now have NIE departments (Newspaper In Education). Sounds good on the surface, however, the main reason the departments exist, and the main responsibility, is getting large bulk sales to schools paid for by businesses. That is then called "paid circulation" and reported as such to the ABC (Audit Bureau of Circulation). Another practice is to "wrap" a newspaper with a "jacket" of newsprint with ads on it. That "jacket" is paid for by advertisers, then dropped at hotels etc, perhaps at major league sporting events or concerts. Then, that entire pressrun is counted as "paid" as well. Using a newspaper to help reading programs is not really the circulation Advertisers are counting on. Nor is a free newspaper at the hotel desk. Home delivery is the most important, with paid single copy sales next.

The problem? Real newspaper circulation is far less than stated. The consequence is that ads don't reach real readers, and ads don't work as well as in the past. This "puffed" circulation is the basis that ad rates are sold to advertisers.

Why does this matter? Many publishers receive bonus based on circulation increases, not the type of circulation. Ad rates have also faced similar issues. Circulation goes down, ad rates go up, and results for those advertisers go down as well. In the online area, Publishers refuse to re think the model. Classified ad rates were raised artificially and forced online, with no infra structure to give that online ad a chance to work. It was done simply to add revenue. Results for the customer were not considered. That inflated price gave rise to Craigslist, Monster, and many others that have eroded Classified ads.

Display advertising is no different. Less real circulation, yet higher rate. What other industry does that? Give you less, but charge you more. Very poor execution of the online revenue model. Many publishers try to count online pageviews as extra circuation. Marginally true, but the print advertiser gets NO benefit of it, and the online only advertiser gets no benefit from the print. So, not completely accurate to "spin" online pageviews as circulation to advertisers

In the newsroom, the head counts have been drastically slashed. The only reason anyone even buys a newspaper is to read the news. The problem is not so much the cuts, as WHO has been cut, or quit. The more tenured and experienced the newsperson, the more likely they are to be be gone from today's newsroom.

At some point, there will be an executive in one of the companies that will state the obvious, and make some bold decisions. If the CEO does not fire them immediately, the changes needed will be done, and the newspaper industry will recover in some form. Until then, the death spiral will continue. The market will crush many of them, and only a few will survive. Local family owned newspapers have a better chance of survival, because they tend to make better long term decisions.

Think of it this way...an NFL team cuts it's best quarterback, running backs, line, and defense, but KEEPS the rookies and third stringers! Then expects the team to win the Superbowl, and expects you to pay the full ticket price to watch em! Then, the executive is surprised by an empty stadium!!

A Silver Lining in the Newspaper Crisis

As a 26 year newspaper advertising manager....both family owned and publicly traded corporations...

The problems usually lie in two areas. Publicly traded companies are primarily motivated by profit margins. Historically, the margins have been 40%. In the more recent past those margins were near 30%. Now, newspapers are hoping for something near 20%. How many businesses out there would call a 20% profit margin BAD? Publicly traded companies put pressure on local publishers to deliver that margin...no matter what they have to do to achieve it. A great many publishers fear their own jobs first, and have NO long term plan or vision at the local level. This means simply "cut", without regard to what those cuts mean in the future....a future that can be as close as the next quarter.
Family owned newspapers tend to take the content and the long term outlook very seriously. Profit margins are just as rich as the others. They tend to cut in a very different way, and usually are hesitant to cut at all.

The second area is advertising. The main reason newspapers are in the state they are now in is due to shortsighted corporate demands of the last 8 years or so. As the internet began to rise, corporations refused to execute more customer friendly pricing, and realize the need for integration of the web. When the opportunity came to capture the revenues from local customers, they priced themselves out of reach for medium to smaller sized local customers. They refused to invest in the web in a meaningful way to bring the power of the web to those same customers.

Consequently, those local customers began to drift to other mediums. Now, when the newspaper needs those locals, they are not available to them. Many newspapers have resorted to selling space at firesale prices to prop up weak days or months. What was a rare "deal" is now so common as to make published rates only a reference point. This is also the fault of local publishers, and corporate directives. Instead of moving toward the local advertiser, the shortsighted greed of the early part of this decade carried forward until the bottom began to fall out in 2006. Most advertising executives were pointing this out as early as 2004. No one took the warnings seriously, and the collapse began in earnest early in 2007. In the last 5 years or so, many publishers come from the accounting or financial disciplines, where they used to be either Newsroom or Advertising professionals. Accountants tend to cut expense to reach the profit target. They do not have the vision, or temperament to take risk. Therefore, they cut to profitability. And they did, and continue to do. Unfortunately, at some point that approach reaches an end. When that end has been reached, that visionless publisher has cut most of the talent that could have kept the long term issues from becoming as severe- possibly avoid it altogether. Now, when they need the very best and brightest talent, that talent has been driven out of the business.

Now, they still refuse to believe that the web will eventually replace them. Unfortunately, they still have no long term vision...and think the recession is the problem. Now that current short sighted view drives even more away from them. If you own stock in publicly traded newspapers...don't expect any significant return to greatness in the near future!