Ka-ching. Papers ring up e-retail ad sales

By: Ken Liebeskind

Numbers of dollars spent on ads show gap in this segment being closed between newspaers and TV

As the holiday season approaches, newspapers are winning e-retail advertising
at an unprecedented rate, challenging TV as the favored medium.
Newspapers still trail TV by a large margin in the broad category of dot-com advertising, but are much closer in the e-retail segment. From January to August, e-retailers spent about 74 million dollars on TV and 60 million dollars on newspapers, according to Competitive Media Reporting.
They are choosing newspapers for three main reasons, said Rishad Tobaccowala, president of Starcom IP, an Internet marketing unit of the Leo Burnett Co. in Chicago. They are good vehicles because of the announcement factor, with start-ups reporting details about their new sites in print; short turnaround times in comparison to other media, which is vital for e-retailers in a fast-paced competitive marketplace; and precise targeting, with advertising in not only local papers but zoned editions of local papers.
Newspapers also will be used more frequently during the holiday season because there’s no TV time left to buy. “The fourth quarter is sold out,” said Harpret Ahuja, executive director at Mediacom Digital, a division of Grey Advertising in New York.
E-retail advertising will be high because consumers’ e-retail buying could reach 12 billion dollars this holiday season (a growing chunk of an estimated 170 billion dollars in traditional retail sales).
E-retail ads frequently appear in stand-alone high-tech sections of newspapers. The San Francisco Chronicle ran “The greatest of E’s,” a 24-page section, on Nov. 7 dealing with the effect of e-commerce on the Bay Area with 60 percent advertising. “We sold 600,000 dollars to 29 advertisers,” said Ernie Pricco, the Chronicle’s national advertising director. Mercata.com, Petsmart.com, Driveoff.com, and Buy.com were the e-retail advertisers.
The Chicago Tribune ran its first eBusiness section Nov. 8 with 54 pages and 65 percent advertising. The e-retail advertisers were
Harrods.com, Officedepot-.com, and Mypoints.com, said spokesman Jeffrey Bierig.
At The New York Times, a tech buyers’ guide (Nov. 18) and a special gifts section (Nov. 28) are expected to see extra e-retail activity, noted Jill Holzman, senior vice president of advertising.
Of course, e-retail advertising doesn’t just run in special sections. “It’s coming in across the board,” Holzman said, explaining that the ads appear in all sections for all kinds of products, from fashion to electronics.
A spokesman for The Boston Globe, Rick Gulla, said heavy spending by
e-retailers for the holidays will include run-of-press (ROP) and pre-printed ads from Amazon.com as well as ads from Value America, Mercata.com, and Shop.now. The paper has earned “in the low seven figures” from dot-com and e-retail this year, said Gulla, who declined to predict how much more it would make over the holidays.
At The Dallas Morning News, Doug Olsson, general advertising director, said, “We have several commitments from e-retailers for the holiday season,” including Value America, Mercata.com, Petsmart.com and Officedepot.com.
Larry Green, vice president of advertising for the Chicago Sun-Times, notes that two kinds of e-retailers are buying space: purely online businesses, such as Amazon.com, and brick-and-mortar retail stores, such as Walmart and K-Mart, that are now selling online. Online selling is “another channel of distribution for traditional retailers,” Green said.
Nordstrom, the Seattle-based retailer with 103 stores, launched NordstromShoes.com, an extension of its online store, earlier this month. It is being supported by a 17-million-dollar multimedia campaign, including ads in USA Today, The Wall Street Journal, The New York Times, and the Los Angeles Times, said Colleen Chapman, a Nordstrom spokeswoman.
Traditional retailers often use separate agencies to buy advertising for their e-retail operations, said John Rowe, the account executive at the Chicago Sun-Times who handles e-commerce accounts.
The result may be double the advertising, with separate ads for the store and the online business, some running the same day, others a month apart, Rowe said.
To secure the business, the Chicago Sun-Times and The New York Times added salespeople to their staffs who handle only e-commerce accounts.
Rowe said he tries “to develop packages for the e-retail clients,” often bundling ROP ads with ads on the Sun-Times Web site.
While e-retailers often say they buy TV because it is the best medium for branding, Rowe’s clients brand their products with innovative print ads. “The agencies creating the ads come up with crazy ideas to use the newspaper as a platform for their campaigns,” he said.
One of Rowe’s advertisers ran a four-color print ad that blended with the editorial content at the top of the page. The ad had no straight lines, like a typical ad, but wrapped around the editorial, creating a unique effect. “E-retailers and especially start-ups are willing to go against the curve,” he said. “That’s what I love about this industry.”
If there’s anything not to love about the current situation for the newspaper industry, it’s that only the largest papers are getting the business.
“The Wall Street Journal, The New York Times, the Chicago Sun-Times, and the other top markets are running this business,” said Bob Schoenbacher, president of Metro Suburbia, a rep firm that sells advertising for Newhouse, Gannett, and others.
“Only the top 10 markets are getting the business,” said The Dallas Morning News’ Olsson. (Fortunately for him, Dallas
is ranked seventh among U.S. markets.)
Exceptions to this rule are papers in smaller markets with a high Internet presence. The 180,000-circulation Austin (Texas) American-Statesman has had 51 dot-com and e-retail advertisers since March, said Jack Puryear, national manager of major accounts. Advertisers are flocking to Austin because “we’re No. 2 on the list of the most-wired cities in America,” he said.
(Editor & Publisher WebSite:http:www.mediainfo.com) [Caption]
(copyright: Editor & Publisher November 27, 1999) [Caption]

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