Newspapers

Declining ad revenue, decreasing circulation — it’s a one-two punch that one would expect to knock newspaper out. How- ever, the position most newspapers enjoy in their local markets won’t disappear tomorrow. Many advertisers still swear by this medium — even if it’s from sheer habit.

In general, newspaper circulation has been declining since the end of World War II, and the amount of time readers spend with their papers is slipping as well. According to Veronis Suhler, Americans spend 151 hours per year (2.9 hours per week) reading the newspaper, 15 hours less than in 1995 — and that number is projected to drop another 7 hours per year by 2005.1 Moreover only slightly more than half of all newspaper readers look at “Section I” of their paper (the front page section), and that’s far and away the most heavily read part of the paper. Younger readers don’t depend on the print media the way their grandparents did. Readers under age 35 are spending less time than ever with their local paper. In most markets, circulation is flat or declining, while paper costs and other factors continue to drive production costs up — and that leads to bigger ad rates for smaller impact. After increasing 6.8 percent in the second quarter of 2000, newspaper ad revenue dipped 8.4 percent for the same quarter in 2001, according to preliminary estimates from the Newspaper Association of America (NAA). The situation had worsened from the first quarter, when expenditures slipped 4.28 percent to $10.4 billion. This put the figures at a 6.5 percent decline for the first half of 2001 to $21.4 billion.

According to the NAA, newspaper advertising accounts for 20 percent of the total U.S. advertising pie, a percentage matched by no other medium and approached only by broadcast television and direct mail. Faced with declining circulation, the newspaper industry has dramatically redefined what counts as “paid circulation.” Now, copies sold for any price (even a penny) count as much as copies sold for full price in newsstands or through subscriptions, according to revised guidelines from the Audit Bureau of Circulations, the newspaper industry’s circulation “watchdog.” In addition, other challenges remain. The Internet has given the newspaper industry continued competition for classified ads — a $19 billion category in 2000 representing 30 to 50 percent of ad revenue for many papers. 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.

Advantages

• History: One of the oldest, most highly regarded media in the 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: Advertisers 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.

Disadvantages

Decreasing Penetration: In most markets circulation is less than 50 percent of all households8

• Ad Clutter, No Separation: A typical 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
• Passive: The paper provides information once consumers decide to buy, but it does not build brand awareness or create product demand. Newspaper advertising thus works mainly for comparing prices.
• Browsers, not Readers: Most people don’t read all sections of the paper every day. Ads in a given section reach only those who read that section. Even the most-read section (“Section I”) is seen by only about half of newspaper readers.10
• Readers Don’t See Ads: On average, only 42 percent of readers will recall noting a full-page ad 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.
• New Competition from Outside: One of newspaper’s strongest ad categories (classifieds) is under attack both from Internet firms and savvy Radio stations.

Adults 18+: spend three hours and three minutes per day listening to Radio … considerably longer than they spend with newspaper (less than 37 minutes). Using Radio and Television together with newspaper increases the reach of your advertisement among light readers and younger consumers and adds impact through message frequency. That means bigger and faster results. Studies show that ad size has little impact on ad recall, so you can decrease the size of your newspaper ad and redirect those dollars into Radio. By doing so, you’ll boost your reach and build message frequency without increasing your cost. Radio reaches 63 percent of shoppers age 25-54 within one hour of purchase time — providing the greatest “purchase proximity” of all major media.

Combining Radio and television with newspaper allows you to influence your customers closer to the point of purchase when they are most receptive to critical marketing information. The success of your marketing strategy depends greatly on how you reach and motivate your customers before their decision to purchase has been made. The intimate power of Radio can stimulate new demand by creating emotional reasons to buy your product and then directing customers to the newspaper for detailed information. It can help maintain loyal customers by keeping your name or brand image top-of-mind.