HOW TO SELL ADS IN A DOWN MARKET

By: Joe Nicholson E&P's Strategies For Newspapers


Editor's note: This story is one part of a package of tips for
publishers and advertising executives that appears in the June 4
print edition.


With newspaper advertising sales sinking in one of the worst
industry recessions most publishers have ever seen, ad directors
are seeking ways to raise revenue now. One ad sales expert has
even warned that this downturn -- different in fundamental ways
from past slumps -- could last into 2003.

The ad famine has forced newspapers to become more creative, even
daring, because they cannot bank on a quick market return. There
is no new dot-comlike ad category on the horizon. Structural
changes in several major retailers have centralized a lot of ad
buying that once offered inventive opportunities on the local
level. Some retailers have gone out of business. Others have
closed stores. And employment advertising -- an increasing source
of papers' revenue over a decade of growth -- will not become
robust again until the economy does.

"Right now, I'd have to say I don't see this slump being any less
than a couple of years," declares Gary Moore, president of Vista,
Calif.-based Insight Edge, a newspaper and advertiser training
and consulting firm. "I don't think we have seen the whole slump
yet. This is just the beginning." Moore, a former ad director at
The San Diego Union-Tribune and The Modesto
(Calif.) Bee, suggests newspapers think of the slump as a
lasting condition rather than sit tight and wait for it to end.

While Moore's pessimism may not be common among other industry
experts and economists, prognosticators have been forced to scale
back expectations repeatedly as the slump drags on. In many
markets, the downturn hit with unexpected fury, and the impact
has reverberated across almost all markets, with scattered
exceptions in parts of southern Florida and patches in the
Midwest.

Display advertising linage was down 12% in January and 8% for the
entire first quarter at major-market newspapers, according to
Chuck Paul, director of client services and major accounts
manager at New York-based Competitive Media Reporting. Some
categories have absolutely tanked: drugs, toiletries, and fitness
ads dropped to $3.8 million this January from $13.7 million last
January. The bellwether help-wanted classified category dropped
2% in January, 26% in February, and 38% in March. Paul calls that
plunge "very concerning, certainly to newspapers, which are a
medium that gets a good revenue stream from that type of
advertising, certainly more so than broadcast."

Survival strategies

In interviews with more than a dozen publishers, ad directors,
and sales experts, various strategies were offered for keeping
sales up in a down market. Highlights include:

Get the publisher on the horn. A publisher or owner can do
things that a sales rep, or sometimes even the ad director, can't
-- such as get in the door of a big prospect. Especially at
smaller papers, the publisher can schmooze with major advertisers
to show respect and appreciation.

At smaller papers, publishers, especially those from a sales
background, can pick important occasions to join the ad director
or even a rep on calls. "If nothing else, it's important they go
in there with you," says S.W. "Sammy" Papert III, chairman of
Belden Associates, a Dallas-based newspaper research firm, and a
former rep firm executive. "It makes [the staff] feel better,"
adds Papert. "Pumps them up."

Chase real estate. Knight Ridder Chairman and CEO Tony
Ridder tells E&P, "Where we really can control [classified
advertising] is in real estate. Homes are not moving as fast.
That presents us with a real opportunity to get out and talk to
Realtors and new-home developers about the power of newspapers."
With a buildup of housing stock for sale, Ridder says real-estate
agencies "are more in a frame of mind to advertise where they
have been basically, in a lot of places, selling as fast as they
could put housing on the market."

Go for help. Dailies in New Jersey and Florida have had
marked success with programs to generate additional revenue from
employment ads, which have been the most battered category at
many newspapers. Knight Ridder recently reported that employment
advertising was down as much as 30%, 40%, and even 50% in some
markets.

"We got hit pretty hard in January and February, but we had a
rebound in March and April -- and part of it was due to some of
the aggressive things we were doing," says Keith L. Dawn,
publisher of The Press of Atlantic City in New Jersey.

Dawn has run semiannual special employment sections, with ads
making up more than 60% of sections of about 50 pages, published
in conjunction with a career fair sponsored by the paper. With
employment ads lagging this year, Dawn increased the frequency
from two to three times a year, and the first section was so
stuffed with ads that Dawn says it took employment ads sales on a
"roller-coaster" ride from down to up, at least temporarily.
Going up from two to three specials a year "seems odd to do this
year," says Dawn, "but it was very successful."

What's the frequency? In Florida, Roland Weeks III, vice
president for advertising at the Bradenton Herald also has
come up with ways to rebuild his help-wanted ads, which had
dipped by double digits. Weeks says he launched a help-wanted
initiative after he "discovered a lot of my business used to run
15 days, and they'd cut back to two or three days."

To persuade advertisers to go back to running ads for 15 days or
more, Weeks created a "Red Hot Jobs" slot at the beginning of his
classified section and is offering a free ad in that slot to
employment advertisers who agree to run their ads for at least 15
days in the regular help-wanted section. Since making the value-
added offer in March, Weeks has been running ads for about 20
"Red Hot" takers a day.

Weeks also hired an employment ad specialist in April to focus on
using volume discount offers to get current employment
advertisers to agree to boost ad frequency. When Roland's reps
are told a company isn't hiring, they urge the firm prepare for
future staff recruitment with an ad promoting their office as a
great place to work.

Turn up the volume. Weeks also offers what he calls a
"business builders" program to help small businesses that can't
afford to match the advertising of chains. Since the year began,
he has signed about 30 small businesses -- including restaurants,
men's clothing stores, plumbing firms, and law practices -- to
contracts that enable them to run three six-inch ads a week for
52 weeks for prices that average $8,000, substantially less than
those ads would have cost without a volume contract.

Grow market share. The San Diego Union-Tribune
launched a campaign in April to attack the market's estimated
$500 million in local TV and radio ad spending. While growing
market share is a key objective during down markets, the
Union-Tribune had been preparing its program before the
slump appeared. "It was probably fortuitous that we had a plan on
the books already because you couldn't launch it quickly," says
Scott T. Whitley, the highly regarded ad director at the
Union-Tribune. "I'm glad we had planned it already because
it is certainly well-timed; it certainly fits a downturn.

"When you look for ways to increase revenue, you want to look for
the biggest pools of money," says Whitley. "We put our sales
staff through a year of intensive training on how to sell in a
broadcast environment, teaching them the terminology, the
strategy."

Whitley's reps evaluate advertisers' TV and radio buys "and look
for inefficiencies." Some advertisers buy so much broadcast, he
says, that they reach "a point of diminishing return."

There are advertisers who become enamored of seeing themselves in
TV spots and fail to realize that increased TV buys are doing
little to move cars off their lots. The Union-Tribune
demonstrates to TV and radio advertisers that they could move
more merchandise by switching to the newspaper that part of
electronic spending that gets diminishing returns.

Get more direct. Whitley also has launched a campaign
against direct marketers by offering single-sheet inserts at
"competitive" rates for distribution as newspaper preprints and
with the paper's total-market-coverage (TMC) publication,
products that complement each other and provide comprehensive
reach. With more than 100 sales reps, Whitley has the troops for
his two-front war.

Whitley's strategy is designed to boost sales, but it also may
have the effect of crippling local direct-mail competitors, whose
overall revenue reaches into the hundreds of millions of dollars.
He says the paper can offer "the same level of market coverage or
selectivity that a direct-mail competitor can." Early success in
the assault on direct mailers has led that campaign to "to double
our expectation for the year. ... Every dollar we take out of
broadcast and out of direct mailers," says Whitley, "is a dollar
we would not have gotten in the newspaper otherwise."

Boost supply side. Whitley offers another suggestion for
coping with the down market. Several weeks ago, he created a
"new-business-development department" to go after nontraditional
newspaper revenue and expand a vendor section, which has been a
very successful feature.

Reps who handle the vendor section select a particular
advertiser, such as a furniture store, and get it to agree to let
the paper contact all of the advertiser's suppliers and put
together a special section for the advertiser and its suppliers -
- with the suppliers paying for the section.

Post a bounty. Moore, the former ad director who runs the
Insight Edge consulting and training firm, recommends offering
reps a bounty for boosting advertising by firms that are
underspending on newspaper and overspending on other media. "Put
a bounty on those customers," he says, referring to advertisers
such as furniture stores or real-estate agencies who spend 90% of
their budget on broadcast while their competitors in the market
do most of their spending on newspaper.

Moore's bounty idea demonstrates how important it is for
newspapers to keep track of where local advertisers are putting
their ad dollars. Most bigger newspapers hire Competitive Media
Reporting to help them follow local ad spending, but smaller
papers that can't afford an outside firm can follow local
spending on their own. They should assign each outside rep to
listen to a particular radio station while he or she is on the
road, Moore suggests. "Have them keep a log," he says.

While Moore says many smaller papers have used this technique
"off and on" over the years, it is particularly important during
a down market to do this sort of unglamorous work. As an
alternative, Moore says some smaller papers have hired residents
in senior-citizen housing to write down the names of radio and TV
advertisers and keep track of how many electronic ads they are
running.

King Harvest will surely come

With so many money-generating tactics and strategies to exploit
during the down market, there is no reason to delay and ponder
whether King Harvest will surely come this year or next -- or two
years from now.

The boom economy over the last decade should be regarded like a
talented ball player's days in the minors, where it was easy to
hit the ball out of the park, and even the pitchers looked like
hitters. Now, in the downturn, everyone has to be able to hit big
league pitching -- but if you can get around on the fast one and
time the curve now, under these conditions, you're going to be a
league leader in better times. Play ball!



Joe Nicholson (jnicholson@editorandpublisher.com) is an associate editor covering marketing and advertising for E&P.

Research contributed by Adweek Research Editor Jim English.



Copyright 2001, Editor & Publisher.