Newspapers

Circulation is flat or declining, while paper costs and other resources con tinue to drive ad rates up. As if these factors weren’t enough, Internet and Radio are encroaching on the industry’s traditional turf: classified ads.

To some competing advertising media, it must sometimes seem as though newspaper advertising is leading a charmed life. Consider the facts: Newspapers lost nearly 5.5 million readers between 1986 and 1996.¹ Studies show steadily declining readership until just recently (the industry posted a six-month circulation increase of 0.072% in March 1998 – its first sign of growth in a decade – but the slide has now resumed), and those who do read the paper typically spend less time doing so than in times past.² Readers under the age of 35 are spending less time than ever with their local paper. In many markets, circulation is flat or declining, while paper costs and other factors continue to drive ad rates up. As if that weren’t enough to drive most newspaper owners to the aspirin bottle, other media such as the Internet and Radio are encroaching on the industry’s traditional turf: classified ads. A bleak picture, to say the least.

And yet, despite the mountain of problems, the newspaper industry somehow manages to keep racking up increases in ad revenue. Preliminary figures from the Newspaper Association of America projected that total ad sales revenues for 1999 would grow to $46.6 billion3, an increase of 5.2 percent over 1998.4 This growth may be due in part to newspaper sales staffs’ changing their traditional “order-taking” approach and prospecting for new business more proactively.

However, challenges remain. The phenomenal growth of the Internet has given the newspaper industry new competition for classified advertising, a $17 billion-per-year category representing 30 to 50 percent of total ad revenue for many papers.5 Employment ads in particular are being targeted not only by Internet companies, but also by enterprising Radio stations seeking a slice of the recruitment pie. Indeed, recruiting on Radio is more effective than traditional channels when the economy is strong and unemployment is low. To continue to compete in a changing environment, newspapers will be forced to establish online presences of their own. Not to do so would mean risking the loss of that famed loyalty newspapers enjoy among their ad clients and readers alike.

Advantages

Disadvantages

History: One of the oldest, most highly regarded media in the U.S. Among its loyal readers, it enjoys a high degree of familiarity, acceptance, credibility, and respect. Visuals: The newspaper’s combination of text and graphics, when used effectively, can create visual appeal that reinforces the messages of its advertising. Mass Audience: Newspapers reach a relatively large mass audience throughout the market with a single exposure. Ad Variety: The medium offers a variety of ad sizes that allows advertisers to meet their budgetary constraints. In-depth: Newspaper ads have the ability to communicate lengthy, complex, or detailed information and descriptions. Ease of Tracking: It’s relatively easy to track response, primarily through couponing. Lead Time: You can place orders and copy with a relatively short lead time. Exposure: The reader controls the amount of exposure to a given ad. They can spend as much or as little time with an ad as they like.

Decreasing Market Penetration: In most markets circulation is less than 50 percent of all households6, (please ask to see the RAB Newspaper Performance Report based on Audit Bureau of Circulations data for your local market). Passive: The paper supplies retail information once the decision to buy has been made, but it does not build brand awareness or create product demand. Newspaper advertising thus works mainly for comparing prices. Browsers, not Readers: Most people really don’t read all sections of the paper every day. An ad placed in a specific section reaches only the people who look at that section. Readers Don’t See Ads: On average, only 42 percent of readers will recall noting a full-page ad7 (for specific ad noting factors, see your market’s RAB Newspaper Performance Report). Can’t Target: It’s difficult to accommodate selective approaches that improve your cost efficiency and enhance frequency against clearly defined, high-potential customer segments. Couponing is Declining: Despite increased coupon face value, redemption has been declining for years. Ad Clutter, No Separation: Atypical daily newspaper is 60 to 62 percent ads; the Sunday edition carries 68 percent advertising, not counting free-standing inserts. Your ad placed next to your competitors’ can only be an advantage if your price is absolutely the lowest. New Competition from Outside: One of newspaper’s strongest ad categories – classifieds – is under attack not only from companies on the Internet, but from savvy Radio stations, too.