By: Jennifer Saba
Microsoft’s Steve Ballmer can blithely predict that print will be dead in 10 years, but any newspaper operator knows ink on paper is still the lifeline of the industry. Online revenue will not even begin to seriously make up for the revenue shortfall of print for another five or six years down the road, and perhaps not even then.
In the meantime, the name of the game is stanching print advertising losses ? since that revenue still represents more than $45.3 billion (or 90% of the industry). The Newspaper Association of America quietly reported in June that industry print ad revenue in Q1 was down 14.3% to $8.4 billion ? the worst quarterly drop since 1971, when the association started measuring quarterly results.
The pressure bearing down on publishers is immense, but many are now moving to readjust the print product to align with the new realities of the business.
The Sacramento Bee, for example, is cutting its business section and moving it to metro ? one of many changes the California paper is undergoing, according to Editor Melanie Sill.
The Dallas Morning News decided its average daily circulation of about 369,000 just isn’t passing muster in a city with a population of about 1.2 million. The company decided the best course of action in reaching more of the Dallas core market is to launch a free home-delivered product. Come August, 200,000 copies of Briefing will land on the doorsteps of non-subscribers Wednesday through Saturday.
And then there’s Tribune. The once buttoned-up, now hell-raising group under the new ownership of Sam Zell, announced it would reduce its ad-to-edit ratio to 50/50 by September in order to save money.
Tribune’s Chief Operating Officer Randy Michaels explained the strategy on a June 5 conference call. “We decided just as a sort of an arbitrary starting point that a paper looks pretty good at about 50% advertising, and that’s ignoring the classifieds or the all-ad sections,” he said. “And if you had said there was a minimum number of editorial pages that each of our papers needs to give the consumers what they want and use that as sort of a floor, and then targeted producing 50% editorial content, sitting on a base of the advertising we have now, what you’d find out is that we could take about 500 pages a week ? 500 editorial pages a week ? out of our newspapers and get a 50-50 ad-to-content ratio.”
Tribune declined to comment further to E&P on embracing this new strategy.
The Orlando Sentinel is the first paper in the Tribune stable to undergo metamamorphasis. On June 22, the paper’s redesign was unveiled to fulfill what the Sentinel had promised: “innovative ways to tell stories, better informational graphics, and more interactivity with readers.” The new front page packs more information and teasers in the banner, reducing the size of the flag. It is divided into fewer elements, giving more space and breathing room to stories: Two big boxes contain stories on the top, with two smaller boxes on the bottom (one is an ad).
The Orlando Sentinel was short on details as to how the new look will drive advertising revenue. “Our advertisers will continue to have the opportunity to run their ads in unique, visible places in the paper, such as the front page,” John D’Orlando, vice president/ director of advertising, said in a statement. “We’ll also pursue other unique positions throughout the paper that will allow their messages to stand out to our readers.”
Traditionally, newspapers’ ad-to-edit ratios are known to vary widely. According to John Kimball, the NAA’s senior vice president and chief marketing officer, that ratio tends to be a general starting point. “You know how much advertising is going to be in the paper, and you start to build the newspaper around that within the general guidelines of the predetermined ad-to-edit ratio,” he explains. “As you would imagine, there are thousands of ads in the newspaper jigsaw puzzle.”
On his “Content Bridges” blog, Ken Doctor raises the notion that less newshole won’t exactly please advertisers who are trained to run in the A section and don’t like bumping up against other ads.
Alan Jacobson of Brass Tacks Design, a company that specializes in newspaper redesigns, says the ratio he’s most worked with is the often-cited industry benchmark of 60 ad/40 content ? which includes classifieds. “To get to the larger issue, all of these things are about cutting back,” he says. “I don’t see how you can decrease the product and increase its appeal.”
Advertisers, meanwhile, do monitor the level of content. “The ad-to-edit ratio is very important to advertisers,” says Deborah Armstrong, senior vice president/sales and marketing for Mediaspace Solutions, a company that places newspaper advertising. “The point of equilibrium is different for every advertiser.” She notes that whatever that ratio happens to be, advertisers actually prefer it to favor content.
Here’s why: “Newspapers are the must trusted news medium. That sense of trust helps your ad when readers see it,” she says.
When too many ads clutter up a space, advertisers get leery. Heath Griffith, brand media planner at advertising agency the Richards Group, takes the editorial- to-news ratio seriously. “We look at all the content in the paper,” he says. “We are about buying newspapers for their product ? which is the news.”
One thing that Griffith has noticed recently to his delight is that newspapers are more flexible with the types of ads they allow. “I think that’s a good move,” he says.
When asked about the shift in news-to-edit ratio, Bryan Jackson, director of newspaper investment at Mediaedge, was more troubled by something else: “I’ve spent as much time trying to get newspapers to run my ads correctly,” he says. “It’s sloppy lately. I’m trying to give you money. That has been more my issue ? babysitting.” He adds that editorial quality has to remain high, and there is some concern that the highly popular A-section is becoming “AP’d to death.”
The morphing of the Daily Miracle for the most part is not considered a bad occurrence. For Brenda White, senior vice president at Starcom USA, wants the changes to come even more quickly: “I applaud newspaper publishers for stepping back and taking a look at the entire operation. We are pushing the industry to prove their value that partnering with newspapers is still working.”
White is most interested in integrated buys (online and print) and says Tribune “gets it” in that department. She’s fine with any change but the consumer has to be top of mind, “as long as it’s rooted in research and it’s going to give the consumer value.”