Advertisers Meet Publishers p. 14

By: Dorothy Giobbe

Ad executives discuss ways of working together sp.

A PANEL OF advertisers visited the annual convention of the Newspaper Association of America in New Orleans this week to discuss mutually beneficial ways of working together.
The advertisers pulled no punches in a spirited morning session, as they offered up opinions on what works well about newspaper advertising ? and what doesn’t.
John Butkovich, senior vice president/media for Columbia Tri-Star Motion Picture Co., told the audience that, as part of his advertising strategy, he places about $67 million worth of ads in newspapers annually.
“The most compelling thing about newspapers for my industry is the ‘where and when’ quality,” he said.
“Utilization of newspapers, for me, is very, very important,” the executive added. “But the question is, is it as important as $27 million dollars per year, $67 million per year or $100 million per year?”
At Sears, advertising fulfills three functions, said John Costello, senior vice president and general manager/ marketing for the Sears Merchandise Group.
The first is to create a compelling image for the store and its brands; the second, to drive traffic into the stores on a short-term basis; and the third, to build long-term relationships with customers.
“Newspapers are a critical part of all of those because of your authority, your coverage, the unique role that newspapers play in the lives of our customers,” Costello told the audience.
The challenge, he said, “is whether newspapers, and all media, are evolving as quickly as the customer, to be as relevant today as, perhaps, we all were yesterday or two years ago.”
For the supermarket industry, newspapers are used as an “informative media,” said Anthony Gasparro, vice president of advertising for the Great Atlantic & Pacific Tea Co. Inc. (A&P).
Newspaper advertising is efficient, not only as a means of advertising weekly specials but of educating consumers about the different kinds of A&P stores, Gasparro said.
Bloomingdale’s uses advertising, first and foremost, to build loyalty among important customers, said Christine Miller, executive vice president/marketing.
“Our first job,” Miller told the publishers, “is to build relationships. We don’t use newspapers for that; we use catalogs and direct mail.”
Newspapers are used primarily to drive store traffic and sales, she pointed out.
All types of media offer advertisers opportunities to fulfill marketing goals, said Louis Schultz, president of Lintas Marketing Communications.
For Schultz’s clients, newspapers work best for specific retail or “disaster strategy.”
But, he said, “we have had a hard time, historically, dealing in many categories with newspapers from a brand image/brand development/brand positioning standpoint.”
Gasparro said newspapers tend to target A&P’s customers better than do other media because of the papers’ ability to provide message saturation on a weekly basis.
“It seems like it’s switching back to our opportunity to reach our stores’ profile best in newspapers, or newspaper products like TMC [total market coverage],” he said.
Schultz disagreed, saying, “Basically, I think that’s a lot of rhetoric. In the real world, that’s not happening.”
Schultz maintained that the large inflows of ad dollars to television indicate that marketers, as a whole, aren’t preparing for a more highly targeted marketplace.
The panel addressed the topic of cost-per-thousand (CPM) pricing, touted by many advertisers as a partial solution to newspapers’ loss of national advertising.
“We don’t care about mass circulation,” Miller said. “I have yet to find a merchant at Bloomingdale’s who has asked me the circulation of any of your newspapers. What we care about is relationships with our customers.”
Research by Bloomingdale’s indicates that 20% of the store’s customers drive 84% of all business.
“Why would we not focus most of our money and resources on getting more spending and more market share from that customer, by simply meeting his needs or her needs when they’re in the store?” Miller asked.
CPM pricing in itself won’t affect national ad decisions, unless there is a significant effect on the overall cost of advertising in newspapers, Miller added.
Bloomingdale’s, with 15 stores in eight markets, must pay a total of $122,000 to put full-page ads in all its markets. On Sunday, that figure jumps to $170,000.
“I’m not talking about CPM,” Miller said. “Nobody cares about CPM. They care about net budget, and when they have to spend $122,000 or $170,000, vs. $15,000, for a catalog page, there’s no choice to make. There’s simply not enough money to advertise for all of our markets . . . unless the newspapers can make it affordable through pricing and packaging.”
Butkovich agreed, saying, “The one thing I’m not looking for is brand loyalty; the second thing I’m not looking for is customer service; the third thing I’m not looking for is CPM.
“The one thing I am looking for is target marketing,” he said, and newspapers are “probably the most untargeted vehicle of all.”
Even if Butkovich were charged a CPM rate in newspapers, he added, he would “probably go spend the savings on television.”
Despite their often pointed criticism, the panel members did offer some suggestions that could help newspapers win more national ad dollars.
Miller described the “up-against” strategy.
Retailers tend to use the same types of media plans year after year, she said, partially because they’re risk-averse.
“Breaking a retailer’s habit is the first challenge for any media,” according to Miller. “If you do something different and it works, you become the ‘up-against.’ “
Miller suggested that newspapers can combat this by allowing retailers to “test things free. If they work, the newspaper gets the business next year.”
Newspapers should also offer “promotions, promotions, promotions,” to help drive store traffic.
“It starts with me,” Miller said. “It doesn’t start with, ‘Oh, my God ? I’m breaking my rate.’ “
Gasparro urged newspapers to make a better effort to understand the supermarket industry.
“We are quite complex,” he said, “and I truly don’t believe that many newspapers understand what our needs are.”
Butkovich said newspapers could help him by sponsoring focus groups with readers, to help identify his potential audience and customers.
Almost all the panelists mentioned advertising rates, noting the disparity between national and local rates and the difficulty of coordinating added-value programs and promotions in many markets.

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