By: Jennifer Saba
At newspaper conferences this spring, the subject of advertising ? often in the context of growing circulation worries ? swiped center stage. For the industry as a whole, much-needed gains in advertising revenue remain stalled. The retail category, the bread and butter of newspapers, inspires particular concern. But on the plus side, there’s been growth in free-standing inserts and climbing online ad dollars.
Newspaper execs and their ad people, as well as outside consultants, kick this around all the time. But the people with the most important (and final) word on the subject are the advertisers themselves. So E&P conducted a virtual roundtable of big advertisers and media buyers and asked how newspapers can better serve them.
Representatives from accounts like Lowe’s and Best Buy, in addition to big media-placement companies, answered a variety of questions ranging from where they stand on address-specific delivery (and if they would pay for it) to how they feel about readership as a metric.
Q What would you like to see offered by newspapers that you are not getting right now?
STEPHANIE STANTON Vertis Media/TNN:
Newspapers need to adapt to a retail environment and its constant change. Some newspapers are definitely right on the ball and can accept a last-minute ad and execute it. There are other publications that are saying, “Well, you’ve got an insertion order and you’re eight hours late, sorry, we’re not going to publish your ad.” They are actually turning away business. I had a conversation with a publisher yesterday and I asked, “You’re willing to walk away from this?” And he said, “Absolutely.” It was more on principle, and he was not going to make an exception for us. So we’ve not run the ads in his publication.
MARSHA LAWRENCE Best Buy:
To be at least at ZIP code-level distribution for both home delivery and single copy. A lot of papers still are not there. They need to invest in the hardware and software to enable them to do that.
And there are times that you mail or e-mail out a request for information and you may have to make two, three, or four follow-up calls to papers to get an answer. Basic customer service is an issue.
MICHAEL BRUCCOLIERE Vertis Media/TNN:
We still get papers that have 100 preprint zones and the best they can do is fax us a hard copy. We need to sort things and do cost calculations, and we get a fuzzy, grainy fax. In this day and age, that’s kind of a surprise to me. We see it everywhere with small and large papers. It’s kind of ridiculous.
BRITT BAUMEL CompUSA:
For rates to be lowered, that’s a given ? but I find a wide range of rates. We’re an insert advertiser, so I can understand different rates for ROP ads. At some newspapers, though, some of the small ones are really expensive and some of the large ones are really cheap.
Another thing: They need to get rid of zones. It hurts us and it hurts the newspapers. For one zone there may be 20 ZIPs and I may like three of them, but I’m forced to buy the other 17. That’s thievery. The more I can target the better. Only one or two [papers on the buy] have it down to the sub-ZIP level. That’s ridiculous.
JEFF PIPER Carat Press:
A couple of years ago I spearheaded an effort to standardize rate cards, contract levels, and qualification standards across categories and papers. After 18 months of multiple meetings and dealing with various newspaper associations, I basically threw my hands up in the air and walked away. It wasn’t going anywhere. That’s the first and most important thing is having standardized information. If you look at magazines, they have at least a starting point ? open rates, 3x rates, 6x rates, 9x rates, 12x rates. It’s a standard thing, and you can pretty much get that in 95% of magazines across the country. Newspapers have nowhere near that.
Second most important thing is making the product more exciting. A basic unwritten rule that goes across 95% of the papers in the country is that you can never have an ad that goes above editorial. Editorial has to be focus. My question is, why? If you look at people who get their news from the Internet, they are surrounded by banners. It’s still quality editorial written by quality writers, but the reader looking at it online is very comfortable looking at it in the environment that is surrounded by advertising.
BOB SHAMBERG NSA:
Fewer forced-buy elements, the ability to pick and choose where and when advertisers can place their inserts and ads so they can maximize their return on investment. Many newspapers would tell you there are capital investments that need to be made to accomplish that, which I’m sure there are. We’re disappointed that they haven’t been made sooner since it was clear it was coming.
GREG BOGICH Valassis:
I think from an ROP perspective there are new configurations, some creative applications in terms of watermarking a page, in terms of diagonal ads that are truly great eye-catchers. And if all newspapers made that available, they would be far better off.
We help advertisers because newspapers are so difficult. Now I will tell you from an industry revenue standpoint, it absolutely slaughters newspapers. Newspapers are not purchased other than nationally by most ad agencies and they have neither the capabilities nor the budgets to aggregate the data they need to do newspaper correctly, so therefore it isn’t even in the consideration set. It is under-utilized to a very significant degree. I don’t think there’s a medium around that generates the kind of response that newspapers do. More often than not, media planners ignore it at most major agencies because it is so difficult to buy.
QWhat do you think of readership as a metric? And is it working?
PIPER Carat Press:
I’m a huge, huge fan. I’m actually on the advisory committee for ABC and the reader profile tool. I think it’s really the way to sell newspapers going forward. If you start taking the reader profile tool ? which is gaining acceptance quite fast ? you can start analyzing newspaper apples-to-apples against other media. It’s much easier to sell.
STANTON Vertis Media/TNN:
We had some conversations with the L.A. Times that they might move to ROP based on readership, based on the day of the week, and all that. I don’t know if other publications are going to jump on that as well. We’re most concerned about [circulation scandals beyond] Dallas, Newsday, and the Sun-Times. Who else is going to come out of the woodwork at this time? What we’re challenged with is to make sure the audits are correct.
I think readership is a metric that understates the value of newspapers. The readership questions as a whole don’t take into account usage, which I think is a much better way to look at newspapers. I just conducted 10 focus groups across the country on preprint usage, with newspaper subscribers and non-subscribers. We found a huge percentage of non-subscribers still accessed newspaper inserts in advertising. Where if you were to ask them on a readership score, they would say they don’t read. If you were to ask if they use it, they will say yes.
QWould you be interested in address-specific delivery?
Our view has always been that if newspapers had the capability, it would give them an opportunity to generate a new revenue stream in competition with solo direct-mail marketers.
LAWRENCE Best Buy:
We have to get to the ZIP level first. A lot of papers aren’t there yet. They group ZIPs into broader zones, and so minimally they have to get to ZIP level. There are papers that are going beyond that, either to sub-ZIP or address-specific. But quite honestly, all the audits are done at ZIP level and all the tracking is done at ZIP level. We need to see that kind of information at the sub-ZIP level, and I don’t know if that will come into enough papers that are out there that could do it. It would be a bit difficult from an advertising perspective to be assured of the numbers you would be getting from the newspaper.
At this time, it would be too much for us. But in the future that would be great, especially with the Sunday paper ? not TMC products.
STANTON Vertis Media/TNN:
Lowe’s has a very robust [customer] database. If there is a way we would be able to merge the household information of subscribers to the Lowe’s database, we would be able to send a very targeted distribution program. The sky could potentially be the limit.
PIPER Carat Press:
I have been on record by telling every newspaper that has come to me with the whole idea of being able to go sub-ZIP code or addressability to drop the idea and not spend another dollar exploring it. Because basically you are never going to find an advertiser that is willing to pay the money to make that end of the business profitable. You are also going to further deteriorate any value that your editorial product has by customizing it down to that level.
A number of papers, short of going to specific addressability, have been going to sub-ZIP codes. Advo has been doing it for years. Advo charges less per thousand than the newspapers do already. You’re investing millions and millions of dollars to add equipment and process and logistics to compete with someone who already undersells you on price. You’re going to have to drop your rates to get your advertisers to run with something that is more targeted.
Let me put it this way: An industry that can’t even standardize their rate cards is not going to make money selling [a product] that is targetable on an address-by-address basis.
If you talk to insert advertisers, of course they are going to want that ? because if you think about it, what they are looking at doing is printing less pieces cutting out all the waste. If you look at it from the newspapers’ standpoint, a lot of waste is where the profit is. If you eliminate that, you’re putting in all this money to sell less copies of your paper.
BRUCCOLIERE Vertis Media/TNN
If the waste we are saving is offset with the premium they’re charging, then yes, it’s going to be worth it for us. If you could eliminate undesirable households and save on printing, we’ll gladly pay a premium.
We brought a new advertiser to the newspaper about 18 months ago ? IKEA ? and we worked with a number of newspapers who took their subscriber list and duplicated it with IKEA’s distribution list so we could actually deliver catalogues via the newspaper as opposed to direct mail. It saved the advertiser tons of money and it increased awareness. It was clearly a very productive use of the advertiser’s dollar.
The main piece that went into the newspaper went to direct mail. We measured both pre- and post-awareness and the intent to purchase with people who received the catalogue via direct mail and those people who received the catalogue via newspapers. We found a better response via newspaper.
QWhat are your thoughts about the increase of “other paid” circulation?
LAWRENCE Best Buy:
I’ve got very strong opinions on that. I think that third-party sponsored copies, what they call “intermittent circulation,” ? which I just love ? is a great marketing tool that we have taken advantage of for certain events like a grand openings and that kind of thing. Should those numbers be included in the top line of the audit? Absolutely not. That’s my opinion.
I would just like it to be identified. I don’t know that I want it weeded out because not all advertisers are created equal. That circulation can be very valuable to advertiser A and not advertiser B. What I would like is an identification of what’s what. If I know more about that distribution, I can then make more intelligent decisions.
QWhat do you think about the new ABC rules that require papers to report circ on a daily basis?
STANTON Vertis Media/TNN:
It’s been long overdue, and I think it’s great that they are moving in that direction.
It’s a good thing. It impacts us because we have advertisers who choose to advertise on different days of the week, and they sometimes move. The reality is, the difference between Friday and Wednesday is significant.
PIPER Carat Press:
You get to a point where you want the right information to make your decisions but sometimes the rules and things that are put in place just add more parts to the decision-making process without weeding out other parts. In light of recent events, it’s needed.
QDo you find that newspapers are innovative in offering value-added marketing programs/auctions to your buy?
Define “innovative” (laughs). I would tell you that they are some newspapers that are proactive and come back with new ideas, new innovations, and new products, and those are people we stay in touch with and probably at the end of the day do more business with. I will tell you that the vast majority of the newspapers when selling themselves are “rate, date, and do you want to have lunch?”
LAWRENCE Best Buy:
They’re starting to do that more ? and frankly, we’re starting to listen more. Often they tend to go with people who are better known to them, people who are in their community. It’s hard with a national advertiser, partly because they don’t allow enough lead time when they come up with these ideas. It’s also difficult to execute something different in each market and not have it scalable. We are starting to do more, though.
BRUCCOLIERE Vertis Media/TNN:
One of the things that I can think of is there was a trend lately where papers were coming to us with these auctions. I think it’s pretty cool. Some of our clients were more lukewarm on it. I understand the concept: You can get rid of some slow-moving stock in your stores and replace it with advertising space. We haven’t had an advertiser take advantage of that. I thought it was a pretty good idea.
PIPER Carat Press:
I just had a meeting with a number of publishers with the big publishing groups this past month about that very topic and the fact they are not being innovative to much of any degree. But all of the big publishing groups, as an example, all realize that they need to be more innovative and they are all working toward that, the most I’ve seen in years. Newspapers over the past couple of years, with the growth of inserts, have pretty much become to some degree just a carrier for inserts ? which really diminishes the value of the editorial product of the paper, which is really the strength to begin with. So they are realizing they have to be more innovative to get people to actually run in the pages of the newspaper again.
Q Are you concerned that young people aren’t reading the paper?
I think sometimes the industry gets sensitive about the demographic that is reading their product because it’s not young. The reality is, it’s a really good demographic and a really broad demographic. So that’s a selling point, but you can’t ignore the fact that younger readers are important and their habits are important ? it’s going to get less attractive unless they bring some new blood into the pool.
It’s a huge issue for a lot of our advertisers ? the decline in usage of the vehicle by younger people. Our way to respond to that is to find alternate newspapers, to find the commuter papers, to find college newspapers targeted at the 18- to 35-year-olds.
PIPER Carat Press:
The answer that most papers have come up with ? and there are some really good ones out there ? is the separate paper that targets that 18-to-34 segment. It’s a separate product that has no ties to the parent paper. Does that reader then evolve into the main paper? I don’t think they do, and I don’t think the numbers support that they do. Is there a better way of extending the brand of the parent paper rather than creating a separate [product] with a separate name and a separate writing staff? Perhaps they should be including more of the elements of the main paper.
QWhat frustrates you most about newspapers?
LAWRENCE Best Buy:
Probably the fact that you can talk about these things for eight years and then they will finally do them. You feel like a little dripping faucet.
The industry in general has not been aggressive to provide value in their product, improved value, year to year, looking at how to make this a better, more valuable, and easier product to buy for their advertisers. The economics in their price/value relationship has declined. You are charging more for less. You’re talking to fewer people and you’re charging more for it.
I think the quality of the product is important [from an editorial standpoint], but I don’t necessarily believe there is a direct link to why people are buying newspapers and how they’re reading advertising. It’s not simply based on whether it’s a really high-quality newspaper and whether they have a lot of Pulitzers. It’s a case of how many people are reading it versus how many people are using the Internet or listening to radio or reading their direct mail. How can I, as an advertiser, buy your product? How can I target it? How can I assure I’m delivering it in the most efficient way possible?
The one I always point to is the TMC product. We would love to see industry- wide research on the readership and value of TMC versus paid home delivery. We get asked that question by advertisers, and we can’t find one quality study.
I think the industry is myopic. I don’t think that they are forward-thinking. I don’t think they address the advertisers’ needs, as an industry.
Just having come back from the [NAA Marketing] conference in Dallas, I thought it was reprehensible the way the advertisers they had up onstage basically derided the product. And I sat watching the guy from Zales just steamed because I think the newspaper industry could do marvelous things for them, but I don’t think that anybody in the industry has addressed his needs properly.
We don’t take the time as an industry to listen to customers and respond to customers. We take the time to say, look, it’s cheaper than direct mail or more effective than doing broadcast. And that’s how we approach it. You know what? Your attributes shouldn’t be the other person’s shortcomings. I don’t think there was anybody from a progressive standpoint saying, here’s how newspapers work most effectively. I don’t think there was any kind of light at the end of the tunnel. The only light at the end of the tunnel at those presentations was the train, and it’s not if we’re going to die, it’s when.
And I think that’s wrong. I think the industry doesn’t do itself justice. The marketing conference didn’t get me excited ? it got me worried. That shouldn’t happen.