Scratching a Niche for New Revenue

By: Jennifer Saba For years, newspapers halfheartedly tried to sell advertisers on the idea of reach, but paid circulation prevailed. Then paid circ started plunging. Add cratering advertising revenue to the mix and new debt loads, and today it looks like the industry is facing a speeding train ? whereas before, it was merely chugging.

On the plus side, newspapers are reaching more people than ever, thanks to expanding portfolios in print and online. During the December financial presentations hosted by UBS, A.H. Belo, for example, revealed the company's niche products accounted for more revenue than online. Its new Briefing ? a targeted product aimed at non-subscribers ? brought in more than $1 million in revenue during its first 13 weeks. That revenue was new revenue, Robert Decherd, A.H. Belo's CEO, was sure to point out to investors and analysts.

Over at McClatchy, the company is retraining its sales people to think in terms of "audience," not product. The idea, says Vice President/Advertising Stephen Bernard, is "to move away from the culture of selling just the newspaper printed copies to total audience."

For the past year, McClatchy has been working on programs to train sales reps in responding to a customer's wants. "We sold multiple products separately for years," Bernard says. "Today you provide multiple products to the customer to meet their needs."

That, of course, involves targeting. Bernard explains that advertisers looking to reach women 34 to 55 could do so through the main product, the local Web site, the special fashion supplement, and so on, with each product building on the depth of the demographic. "We are isolating the customer on how they use our products and show them how to run ads," he says.

So far, training has taken place at The Sacramento Bee and the Miami Herald. Alexandra Villoch, the Herald's senior vice president of advertising and marketing, says that all of the paper's sales people went through the training session in the summer. "We made every single manager and sales rep" take part in the training program, she says, adding that in the past, only a new hire would have to go through the process.

Sales people learn the No. 1 takeaway is to ask the advertiser (or potential advertiser), "Who do you want to reach?"

Villoch relays the story of how one advertiser ? a consortium representing the city of Miami ? gave the Herald the brush-off at first, until they heard what the paper had to offer. The group was looking to promote Miami as a destination; they thought the Herald only reached locals.

Not so, says Villoch. People in Europe, Latin America and other parts of the U.S. like New York, access the Herald online. Once this was explained, the paper got a piece of the $2.5 million campaign.

He says the Herald also made some big changes to the way in which sales people were compensated. Reps now have a bigger base salary and commission is doled out by sales goals, which could include a combination of print and online, for example ? not just one of those products.

Villoch feels raising the base pay and not tying the commission structure that gives one product (like print) an advantage over another (say, online) helps the rep engage better with the customer: "We want them to sell the right product, rather than the product with the biggest commission."