SAGE ADVICE: Ads May Pick Up As Consumer Spending Increases in June

By: Leo J. Shapiro, Eric Shapiro, and Steve Yahn In theses turbulent times, newspapers need fish for advertising revenue in troubled waters.

Two potential sources?retail advertising and political ads?suggest potential based on strong consumer interest in our Leo J. Shapiro and Associates national poll in June.

Consumers pull back from spending across the board. The percent shopping for housing, new cars, furniture, appliances, medical expenses and gasoline all tick down.

Their concern is not income. The percent of consumers who see their incomes keeping up with or staying ahead of rising prices remains stable at 26% month to month.

Nor is inflation the concern. The percent who expect prices to rise at the same or a steeper rate edges down two points from 43% in May to 41% in June.

Consumer spending has been inhibited by their efforts to save enough to keep their family finances in balance. That parsimony is now paying off.

Early reports of June retail sales are encouraging. The index that tracks consumer satisfaction with the balance between their income plus savings versus their debt and spending rises from 95 to 99 between May and June.

As consumer finances come into balance, their reluctance to spend may be nearing a turning point.

BOTTOM LINE

As the turning point in consumer willingness to spend comes into view, newspapers need to show their advertisers how to tempt consumers to relax restraints on spending, much as one encourages a convalescent to begin to eat by tempting them with tasty food.

This is the time for newspapers to go back to their roots and offer creative services in return for advertising revenue. Lithographers pioneered advertising by giving the image away in return for getting the print order.

Politicians, meanwhile, should buy newspaper advertising to reach the interested and motivated readers who are spending more than a New York minute getting information to guide their voting decisions.

The on-line media have learned to locate advertising near content relevant to potential customers. It is not too late for newspapers to learn to do the same in their print and on-line editions.