At NAA Conference, Macy's Exec Tells Papers How to Win Back Business

By: Jennifer Saba An executive with one of the newspaper industry's largest advertisers told a room full of publishers to change the product or get left behind.

Anne MacDonald, president and chief marketing officer, Macy's corporate marketing, delivered a blunt and critical analysis of the industry during this morning's presentation at the Newspaper Association of America's annual conference, now in its third day, here.

"To win our ad dollars, you need to be winning in the marketplace. But that is not the case," she said.

MacDonald, a self-confessed "newspaper junkie" who reads several local, national and international papers, said that Macy's business decisions "like yours are driven by facts and results, not emotions."

Her company is very "concerned" about the declining readership and circulation at many newspapers throughout the country. "My company and I are not happy to see newspapers in decline. Newspapers deliver an immediacy that isn't possible ? newspapers help us cast a wider net than direct mail efforts," she said.

But the inability of newspapers to hold on to current readers and attract younger ones is causing the giant department store to look at different media to reach them. "The readership and circulation data is causing retailers like us to shift our ad dollars," MacDonald said.

MacDonald compared the current flux of newspapers to the retail environment that has been undergoing its own transition for the better part of two decades, MacDonald explained. "We can opt to stay the course and complain all the way down ? choose short terms fixes like cost cutting" an option that generally doesn't work, "or we can select a different path by aggressively reinventing the business model," she said. "That's what I assume and hope that all of you are doing."

Macy's wants to project a more "upscale and fashion-forward image," she said and increasingly, the retailer is turning to national fashion magazines, the Web, and TV to build a national brand. Local and national newspapers are still important to Macy's especially as a vehicle to advertise specific items and prices.

"The daily newspaper remains a very good tool for Macy's, that's the good news," MacDonald said adding, "The problem is our customer is not picking up the newspaper as much as we would like ? We need to make sure we are not spending more to get less."

"Macy's is taking steps to increase [customer reach] and the efficiency of our spend. In this environment, newspapers will get left behind."

She offered some suggestions she would like to see newspapers implement:

-- Newspapers must maintain and increase circulation and readership among Macy's core customers, women 25-to-54. She said that 30% of that customer base is African American, Hispanic or Asian and that Macy's is advertising in niche media to reach them. "There is a lot you are doing in this area but more must be done," she said.

-- MacDonald said that newspapers should push local, not national and international content, to the front. "That is your differentiation but that is not what someone sees," she observed.

-- She is surprised by the lack of marketing done in the industry, especially since newspapers have unique content with high journalistic standards that sets the medium apart.

-- And she brought up the fact that newspapers need to work together and coordinate services across markets. It is not productive for Macy's to have to work with each individual paper to place a national ad, she said.

"I'm in the bleachers cheering for you," MacDonald said.

***

Related E&P coverage: GM Chief: Ads Going to 'Where Our Customers Are Going' -- The Internet