Newspapers stay on message in tough times

August 5, 2009

It must be hard to churn out positive messages about the newspaper business when papers are losing their advertising revenue at alarming rates and the Internet is not yielding up any easy secrets for survival.

Don’t underestimate the Newspaper of Association of America’s ability to stay positive. Here’s part of a press release that it issued today:

Newspaper Web sites attracted more than 70.3 million unique visitors in June (35.9 percent of all Internet users), according to a custom analysis provided by Nielsen Online for the Newspaper Association of America. Newspaper Web site visitors generated 3.5 billion page views during the month, spending 2.7 billion minutes browsing the sites over more than 597 million total sessions.

“The newspaper audience continues to expand as publishers aggressively capitalize on their investments in digital properties, adding robust features and launching new products to attract a highly valuable consumer audience,” said NAA President and CEO John F. Sturm. “Advertisers who want to reach consumers ready to make purchasing decisions continue to use the trusted newspaper brand to ensure their messages are heard through the crowd.”


The latest Nielsen numbers come as early data from a MORI Research survey of 3,000 adults, indicates that newspaper advertising remains the leading advertising medium cited by consumers in planning, shopping and making purchasing decisions. The study, part of a series entitled “American Consumer Insights,” also found that 82 percent of adults said they “took action” as a result of newspaper advertising – from clipping a coupon or making a purchase to visiting a Web site to learn more.

Along with that came this pitch from the NAA spokesman, Jeff Sigmund, a guy who could claim political asylum in most industrialized nations after the pain I’ve foisted on him for the past few years (I’m sorry, Jeff, I can’t help it!):

I think it makes a compelling business story – the research and Web audience figures coupled with the latest financial news from the industry (reports that ad revenues are beginning to stabilize, and that Gannett and McClatchy are poised to beat profit estimates for the next five or six quarters).

Would that it were so!

The research and Web audience figures are good, and point to the possibility of survival for traditional media companies — but not all by themselves. The fact is, print ad revenue is still off by 25 percent or more at many papers, with classified revenue down as much as 60+ percent in some categories, when comparing quarterly results to last year. Online revenue has a ways to go before it can make up for those print declines, and no one is sure that it will, so those numbers, while good, don’t change the perception of papers as being in mortal danger.

Also, publishers did largely beat profit expectations that Wall Street had for the papers, but not because their businesses improved. It’s because they cut costs so drastically that they managed to please Wall Street for one more quarter. That — and short sellers forced to buy back shares of newspaper publishers that they had sold in the hopes that they would fall further, thus letting them reap a big profit — are reasons why newspaper stocks have risen and stayed up. As I explained in a recent “analysis” story, that trend might not last long.

Remember what that really means: Publishers cut the heck out of their ad staffs, their newsrooms and the paychecks of those folks who still have a job. One imagines you can hear the echo of your footsteps much better in the hallway at your average daily paper these days — there aren’t as many people there to drown out the sound. That’s a compelling business story, but not in a good way.

(Photo/Reuters: EW Scripps CEO Rich Boehne, announcing the shutdown of the Rocky Mountain News in Denver, Colorado, earlier this year)

One comment

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It is true that newspaper companies cut their way to improved results. It is equally true that in their slimmed down state it would not take much of an increase in revenue to increase profits even more. The economy will improve, perhaps not tomorrow, but it will happen.

Moreover, many newspapers have figured out that their reliance on a small group of relatively big and once lucrative advertisers made them vulnerable in this downturn. Increasingly these papers have started to appeal to the small businesses they once ignored with a combination of special low rates and niche content that creates a positive selling environment for local businesses. This generates new revenue for the papers and cost effective ads that drive traffic for local retailers and service businesses.

Writing off newspapers in general and smaller market newspapers in particular could be a very costly mistake for the shorts you site above.

Posted by Paul Camp | Report as abusive