By: Dorothy Giobbe International Newspaper Marketing Association hears state of the industry report sp.
NEWSPAPERS' EMBRACE OF new technologies, new techniques and "most importantly, new attitudes," combined with an improving economy, make the outlook for the next five years "about the most positive in newspaper history." That was the message delivered by International Newspaper Marketing Association president Shaun Higgins in the first of what is to become an annual State of the Industry report given to attendees of the organization's annual conference. Higgins delivered an extensive overview of industry developments over the past few years while offering a partial view of the future. Over the past five years, "newspapers have become the most innovative and responsive of all major media," Higgins said. Higgins outlined five major areas where newspaper innovation has "improved the image of performance of our medium." Interactive electronics, new programs involving rates and integrated marketing plans, "state of the art" database marketing initiatives, the formation of new sales networks and inter-media alliances, and the return and growth of "impressive merchandising" are all elements that have "propelled . . . newspapers to improved product margins and advertising revenues in 1993 and 1994," Higgins said. Some of the improvement is due to cost savings and lower newsprint prices, Higgins noted, but "we also saw significant revenue increases, consumer confidence rebounded, and inflation rates remained low." He added that Canadian and Australian newspapers also saw improvement, "although the mood of newspaper managers in those countries is still somewhat less positive than here." Over the next five years, Higgins said, newspapers will experience further improvement due to continuing strong levels of consumer confidence, generally low inflation and interest rates, the "fracturing of electronic media, particularly in the broadcast and cable television areas," and "continuing innovation within the industry, particularly in response to the needs of direct mail advertisers. "The media-buying tide is turning in our favor," Higgins said. "Savvy media buyers are increasingly putting their clients ad dollars where the buyers are: in newspapers." Between now and the year 2000, there are a number of areas where newspaper advertising will prosper, said Higgins. He forecast a 50% to 100% growth in political and advocacy group advertising. Also, he expects increased national brand image advertising, fueled by demographic shifts and "the creative repositioning of newspapers in buyers' minds." Higgins also forecast a 2% to 3% growth in employment advertising and an increase in ads aimed at the 50-plus age group. Growth in home electronics advertising will be spurred by technology developments which will beget upgrades and replacement buying. As newspapers become healthier, Higgins said, "they will also become increasingly more hybrid," adding more electronically interactive elements. He noted that already, many newspapers have interactive voice personal ads, ad-supported audiotex services, consumer on-line services, fax-based information services, and alliances with national services such as Prodigy and America Online. About a quarter of American dailies are involved in database marketing initiatives, Higgins said, which insures "that no one knows our markets better than we do." Database marketing and interactive services are two of the "major new weapons in our media arsenal, allowing papers to go beyond selling space alone, and offer a broad array of marketing solutions" for advertisers. Also, they help to establish new user-supported revenue centers, "which enable newspapers to extend the value of the information gathered by their newsrooms." Higgins stressed the importance of a free press for newspaper marketing. "As marketeers, we must be concerned when press freedoms are lost, because marketing exists as a profession only in politically free environments, and because where there are no newspapers, there can be no newspaper marketing." To support press freedom worldwide, Higgins announced that the INMA board will support the newly established World Press Freedom fund of the International Federation of Newspaper Publishers with a multi-year pledge of $5,000. Globally, Higgins said, "the computing, publishing, entertainment, broadcasting, and telecommunications industries have converged." Increased competition creates a "media environment of ambiguity where partners are competitors . . . our missions, our goals and our alliances are transmuted in a number of seconds." While the information market is a global market that is driven by global players, information needs vary among countries, Higgins said. In the developed world, declining readership and advertising share are pushing U.S. newspapers to seek new markets for information, and technology offers the means to distribute information beyond traditional areas and methods, at a lower cost. Higgins said that in other parts of the world, many opportunities in traditional publishing exist. Advertising is on the rise in countries where technology and changing economies and governments have created a boom market. As circulation in these countries grows, Higgins said, advertising potential grows. In nations with a highly developed press, newspapers will likely become a guide to all of the media and information options offered by the publisher. Readers will be able to get as much or as little information about an event as they want, when they want it. Standing features or articles in the newspaper will have tie-ins such as the telephone, faxed information and computer. "For each of these applications, we can now find them somewhere in some newspapers," Higgins said, "but no paper today has the comprehensive interactivity of the newspaper of tomorrow."