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Archive for April, 2009

Advertisers love newspapers…on certain days

Friday, April 17th, 2009

When newspapers start cutting the number of days they publish, what happens to the dollars advertiser would have spent there? Saving this money is a tempting option, but as Henry Ford said, “Cutting your advertising to save money is like stopping your watch to save time.”

We did a little research to see what advertisers in Detroit, Ann Arbor and Seattle might be thinking as the newspapers there either stop publishing or cut back on the days they publish. Speaking with several advertisers this past week, it is apparent that a lot depends on which days the newspaper eliminates. Thursdays, Saturdays and Sundays may prove to be important to the businesses. This is likely to make the advertisers keep their budget the same for their newspaper advertising endeavors. (At least that’s what they’re telling us.) In Ann Arbor, the big advertising days will remain intact. One real estate advertiser in Ann Arbor said he would spend the same amount of money with the umbrella company of the Ann Arbor News, be it in print or online. The main reason was that publication days coincide with when he typically advertises. Similarly, a Detroit car dealership plans to invest leftover dollars in the Detroit Free Press’s online product. “It’s still a viable advertising opportunity,” he told us.

While businesses will continue investing in whatever product the newspaper has to offer, others are not so eager. A real estate agent in Ann Arbor told us he’s moving away from print and toward online initiatives. Therefore, any money left from newspaper spending will go to different areas of online. We received a similar answer from another real estate company in Detroit that plans to put a small portion of what they would have spent with the newspaper toward online, and save the rest.

Overall, the consensus is that these advertisers are planning to invest more dollars in the Web and save whatever else they can.

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Why some local news outlets are failing

Saturday, April 11th, 2009

The news last week that WYOU-TV in Wilkes-Barre, Pa., shut down its local newscast underscores the fact that the real problem in local markets is that media outlets are oversupplying their communities with local “news.” The deluge of edited, polished local news is causing newspapers to shut down or cut back, and is now beginning to cause some of the third-rated TV newscast in many markets to fade to black while people’s attention is diverted toward a more interesting “W-YOU” – things like YouTube, Facebook and Myspace.

Don’t get me wrong — local news has its followers, and the audience is massive for newspapers and TV stations. In fact, the Internet’s hasn’t put a dent in people’s preference for getting local news from TV and newspapers. TV still remains the #1 source, and newspapers the #2, according to Pew Research. The percentage of adults getting news from those two legacy sources hasn’t changed much since the Internet came along. It’s just that people only want so much local news. A second major newspaper or a third TV station offering local news is about as useful as the left back pocket on your pants.

I’m still amused at the rush to put local news online, and the saber-rattling from publishers who threaten to charge for access to local news. Go ahead, charge for access to those stories. You’ll soon find what WYOU found – that there are many other (free) outlets for local news, and that someone else has already figured out that it’s not about YOU, it’s about THEM.

(See the story in Broadcasting & Cable )

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Impact of the Economic Crisis

Monday, April 6th, 2009

The chief executive of a major newspaper company made a profound statement last week. He said he believed the economic crisis was having a positive impact on the business, in that “the number of players will diminish, but the strongest players may be stabler after the crisis.”

The statement came from Mathias Döpfner, who heads the German publisher Axel Springer.

Remarkable things are happening in Europe, where Springer reported its highest profit in its 62-year history. At other European publishers, the Internet delivers about 25% of the revenue (as opposed to about 7% in The States), and one Norwegian newspaper Web site rivals Google as the most popular in the country.

Is this a purely European phenomenon, or are there lessons to be learned in The States?

Europe is more than 20 countries, almost none of which speaks the same language and few have populations larger than a mid-size American state. To compare them with the U.S. and its newspaper challenges is unhelpful. But what this story does underscore is that while the newspaper business model is highly stressed, it isn’t broken.

Indeed, in the history of modern media – the last century, say – no medium has ever been killed off by another. Newspapers still have a strong value proposition – delivered to your doorstep, pre-packaged and convenient, lightweight, disposable, and NOT dependent on electricity to read – perfect for the breakfast table, sitting on a plane, relaxing on the beach. The dying off of dozens of evening newspapers back in the 1970s and 1980s didn’t signal a death knell either.

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