To Stay Ahead, Newspapers Become a One-Stop Shop

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Smart publishers already know the consumer will not save their local newspaper. The limited attention span of the digital information consumer keeps local papers from pinning their hopes on subscribers. Without a robust number of subscribers, display advertising suffers.

The COVID-19 pandemic only accelerated the cutting at most newspapers despite the demand for information. Publications responded by cutting staff as advertisers cut their budgets.

The traditional print advertisers—older, local, mom and pop retailers, restaurants, and bars—cut their advertising budgets in an effort to keep their doors open, in most cases.

A few advertisers actually started buying print advertising in 2020, according to the latest survey by Borrell Associates, Inc. They surveyed more than 2,200 businesses that bought advertising in 2020, 976 of which bought print advertising in newspapers. Of that 976, 7.4 percent more said they bought newspapers this year than in 2019.

“Back in April and May, we were bombarded with the message, ‘We’re in this together,’” said Corey Elliott, vice president of research for Borrell. “There’s credibility linked to newspapers, and when I get a story about my business in the newspaper that we’re here for you, we’re doing curbside pickup and we want to make sure people are safe, there’s a level of credibility with that. That could be why we saw an uptick.”

But nearly a quarter of these newspaper advertisers (NAs) said they will not be advertising in print this year. Does that really matter?

It has taken decades for newspapers to adjust to the digital transformation and some are still struggling. Those that have embraced it have figured out their place in the marketing funnel and determined they have a new path. They have evolved from a marketing channel to a marketing partner.

Finding Value

The businesses surveyed by Borrell are squarely in a newspaper ad rep’s sweet spot. More than 60 percent came from retail, health, arts and entertainment, services, and restaurants. They’re small businesses with 80 percent having fewer than 100 employees. Nearly two-thirds have been in business for more than 20 years; 84 percent are independent; 94 percent serve consumers; and their average gross revenue is just shy of $1.5 million.

So, it’s not surprising to see a relatively high percentage of the 2,262 survey respondents saying they bought newspaper print advertising in 2020. Newspapers ranked sixth by percentage behind social media, email marketing, website design, search engine optimization and online listings. Newspapers ranked 13th for average annual spending at $21,034. More than 230 of those newspaper advertisers, or 24 percent, said they don’t plan on buying print ads in newspapers in 2021.

Advertisers all plan to cut their spending on local magazines, newspapers and print directories. Print products were the only ones slated for budget cuts. Streaming video/OTT, social media and email are where the top budget increases are planned. Eleven of the 16 channels where advertisers expect to increase their advertising spend are digital.

“I think this is a good survey that can provide insights into the behaviors of local advertisers, but it is limited in providing a clear understanding of the use of newspapers, as many newspapers lead with digital,” said Dean Ridings, CEO of America’s Newspapers. “Print is just one component of the newspaper’s offerings, so it is difficult to understand advertisers’ behaviors when measured by print. Any of my members in virtually any newspaper in the country is doing as much digital as they are print. In the mid-sized markets and up, they’re probably doing more digital.”

He said the majority of his association’s 1,600 members have adapted to the changing landscape and are viewing themselves as marketing partners.

“They want to provide complete solutions to their advertisers so that they get better results, and that means a buy that’s a combination of print and digital,” Ridings said. “And even on the digital side, it’s not just banner ads. It’s by far more than that. There are emails and search. Many of the newspapers around the country are really serving as agencies.”

A One-Stop Shop

The newspapers in the Shaw Media family were doing well according to vice president of revenue Jason Hegna. Headquartered in Crystal Lake, Ill., the company—one of the oldest chains of family-owned newspapers in the country—has more than 40 publications in the Upper Midwest.

Hegna said Shaw has been “pretty progressive” operating in that space when he joined the company more than seven years ago. But he wanted to do something to help the sales teams who had limited resources.

“I wanted to put together a platform that ultimately have the reps do a needs analysis. They put the information into the platform, and then within 24 hours they get a full-blown presentation with recommendations,” Hegna said. “I did the training the first or second week of March, and then everything hit the fan.”

He said in hindsight the timing couldn’t have been better. It gave his team of 35 sales reps a chance to learn the system and develop proposals in the new platform. Print is now just a piece of what they can offer. Their owned and operated properties include digital ads, inserts and special sections. They also sell programmatic audio, digital out of home, programmatic site retargeting, and geo-fencing.

“I’m trying to get the rep’s mindset away from thinking that they’re just newspaper reps,” Hegna said. “I want them to be marketing consultants, and provide solutions that are customized for the individual client to drive the results that they're looking for versus just going out and saying, ‘Hey, do you want to buy a full-page ad?’” That's really one of the big things that we're trying to get away from.”

He said they sometimes have to fight the perception that all they do is newspapers when people tell them they’re taking newspapers out of their budget.

“What’s interesting is that our clients are being forced into being digitally savvy versus just sticking with the tried and true that they've always done,” Hegna said. “We feel that we've cycled through the clients that are done with print, and the clients that we have running in print in all of our traditional products, we feel pretty confident that's a solid group. What we're ultimately finding, as well, is we're starting to compete against other media companies from a perspective of broadcast.”

He gave the example of a client that had run print for a number of years. They were looking to build out a more integrated marketing program that included several different tactics. They told Shaw they were switching to iHeart Radio.

“Because of the solutions that we have through a company called AffinityX, we were able to go in and sell them our digital O&O, print, along with several other tactics, including the geo-fencing that I was talking about,” Hegna said. “They're also doing programmatic audio and pre-roll video with us. By really becoming more of a one-stop marketing agency, we were able to win that buy. They were spending probably about $20,000 a year with us. We were able to make that a $100,000 a year buy.”

Hegna said there is still plenty of educating to do when clients and potential customers start conversations with, “We’re cutting newspaper out of our budgets.” But there is educating to do inside Shaw as well.

“It’s an 80/20 split really,” he said. “You have 20 percent that are getting it and doing it right. Then, you have 80 percent that it makes them nervous and they’re not quite sure how to approach it. It’s really getting them to see themselves more as marketing consultants versus, ‘I’m here to sell you a print ad today.’”

Leveraging Local

The local newspaper plays a unique and valuable role in the community. It can serve as a bridge between the businesses in the community and the consumers. Borrell’s Elliott said from an advertising perspective, executives need to understand where they are in the marketing funnel, then make sure their people are on the same page.

“Any salesperson will do exactly what you pay them to do,” he said. “You can have all the best philosophy about newspapers and where they fit. But when you turn around and say, ‘OK, you get a bonus for selling the double-truck this weekend,’ then all that stuff flies out the window and they just go into sell mode, and that’s a hell of a wheel to get on.”

Hegna said it’s up to the publishers to find different models that are not so reliant on consumer revenue. Newspapers shouldn’t focus on businesses to the exclusion of consumers, but the greatest potential lies with the small and medium-sized businesses that don’t have the marketing savvy or tools that the local newspapers have.

"We need to continue being a marketing arm for our SMBs. To do that, we need to evolve with the times and deliver the solutions that are going to get the leads. Our clients want leads. They want actionable results,” he said. “Ultimately, we're putting together tools in place to create actionable results for our clients. With the push for consumer revenue, we just launched the Washington Post Arc CMS platform about three and a half weeks ago. We're putting a lot of energy into the digital experience, for our readers, where we've redesigned our whole structure for our editorial team. I think with that there's going to be additional opportunities that come out of our owned audience for our advertisers. One of those areas that we're really pushing and developing a lot of is newsletters. We’re getting advertisers to sponsor those. We’re also building our own database. It’s a strong database. We’re going in the right direction. It’s evolving very quickly.”

Sean M. Wood is a freelance writer and editor and owner of Three 8 Communications. He spent 19 years as a print journalist and was a senior business reporter for the Fort Worth Star-Telegram and the San Antonio Express-News.

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