By: Stacy Jones
A POPULAR song in the 1980s declared “the future’s so bright, I gotta wear shades.”
Newspaper executives were singing a similar tune at the recent Newspaper Values and Finance conference sponsored by Kagan Seminars.
The newspaper business “is hardly obsolete, hardly being replaced by the new media,” Paul Kagan told the audience of analysts, stock brokers, bankers and newspaper company executives convened in a ballroom at the Park Lane Hotel in New York City. Instead, he said, the industry “has turned a corner.”
With that pronouncement, the gathering moved to its first, and most interesting, panel discussion on defending newspaper market share in these competitive times.
The industry included Miles Groves, Newspaper Association of America vice president of market and business analysis; Media News Group CEO Dean Singleton; and Joel Stark, Providence Journal Co. vice president of business development.
Issues focused mainly on the impact of new media on newspapers, how the consolidation in television and radio will affect newspaper ad spending and trends in display and classified advertising.
Concerning the emergence of the Internet and online services, the panel could barely contain its collective yawn. As Singleton put it: “The threat is somewhat of a big myth.”
He compared the situation to past, and, ultimately, incorrect predictions on the cable industry, which was supposed to eclipse traditional media and create a revolution in communication and entertainment.
In truth, ad revenues ? one of the fuels for any medium ? amounted to about $67 million for the budding industry.
“That’s a rounding error in my business,” laughed Singleton, who said, the new media business “is a long way from getting into our pockets.”
Newspapers, continued Singleton, are in a better position than all other media to do well against the online onslaught because newspapers have the databases and technology already in place, thanks to decades of storing, compiling and presenting information.
Singleton’s point was expanded by Groves, who said many papers have already put their stockpiles of information to a more advantageous use by offering public access to newspaper archives through the Internet or partnerships with online services such as America Online or CompuServe.
Advances in distribution and advertising methods, with a focus on customers, have also helped to make newspapers competitive, vital and necessary for many advertisers and readers, insisted the panel.
These successful techniques range from more sophisticated databases that can pinpoint market targets, to giving advertisers the option of reaching a specialized audience, to production technology that allows 17 versions of a Sunday preprint flier to be deliverd to different branches of a local supermarket chain.
“When you get down to street level, that’s what a distribution advantage means,” said Stark.
At the Providence Journal-Bulletin in Rhode Island, Stark said innovations include rearranging the ad department’s “hierarchical, product-based” arrangement into 11 selling teams, which participate in consultative selling. In this new setup, ad teams sell clients a package of advertising ? newspaper, television, radio.
Stark sees no harm in admitting the competition may serve some needs of some clients better. The advantage, he says, is that the paper’s ad teams “control the process.”
“By being in control, [newspapers] can get the biggest piece,” he said.
Such modifications are important if newspapers are to remain profitable, because as Stark sees it, “We’re moving away from the mass, one-size-fits-all type of marketing.”
The one off-note from what Kagan referred to as a “relatively feel-good panel” dealt with the drop in aggregate newspaper circulation. Rate increases were determined to be the cause of the decline. As newspapers raised circulation rates to protect profits, marginal readers were pushed away, concluded the panel.
The assembled experts offered another prognosis as the session came to a close: no end in sight for the industry’s upward economic swing.
“There’s a long run left in this economic cycle,” offered Singleton. “We’re talking years, not months.”
?(The online threat to newspapers “is somewhat of a big myth,” Dean Singleton says.) [Photo & Caption]