Magazine article Editor & Publisher

A Prescription for Failure

Magazine article Editor & Publisher

A Prescription for Failure

Article excerpt

THE FACT THAT many advertising salespeople in the newspaper industry still view their job primarily as selling space on a page can be a "prescription for failure"' Michelle Foster, Gannett Co.'s vice president/market development, told a group of marketers and researchers.

Foster, who spoke at this year's Newspaper Association of America's Research/Promotion and Market Development Conference, sees the role of advertising salespeople as "helping other businesses create and sustain customers' "

"That's what we get paid for. Advertisers don't spend money with us to pay for newsprint. They invest money in us to create customers. That view of our mission opens us up to play a much more deep and proactive role for our business partners and increases significantly our accountability to them."

Newspapers are intermediary marketers, she said, and that means that advertising customers go through newspapers to convert readers into customers. In the past, when newspaper penetration was high and the cost of microtargeting was prohibitively expensive, it was viable for businesses to advertise in newspapers in seeking to reach a prospective customer.

However, today's marketplace is different. Newspaper weekday readership averages about only 60% across the nation, missing nearly half the market, she said. Often, that missing half is young adults, particularly young women.

"Today, increasingly the business of newspaper advertising is much more than selling space. It is the application of the marketing knowledge, analysis, advertising program design and multimedia planning to solve advertiser problems and help them create customers," Foster said.

She listed five reasons why newspapers must shift their view of their role as advertising vehicle to customer creator if the industry is to retain its vitality and revenue.

First, demographic shifts have changed consumer buying behavior. During the 1980s, the rate of household creation escalated as baby boomers left home and set up their own. This fueled significant growth in the retail economy. The 1990s has seen the household creation rate fall, which means that the growth in the retail economy will taper as well.

Chronic underemployment of white-collar workers is a reality. People who are working are doing it longer and harder for less money. With time constraints and funding college education and retirements, people will be spending a great deal less.

"Retailers will feel it in their wallets and so will we," Foster said.

Secondly, the economy has undergone permanent structural changes. Today, the United States is "overretailed," she explained.

"There are more products in more stores in more cities than we as a nation can afford to consume."

Add to that the staggering, frighteningly high levels of consumer debt, and more retailers will continue to go belly-up. Even if consumers continue spending beyond their means, they will probably find other venues for spending their money: taxes, health care, and services. These venues are not traditionally sources of revenue for the newspaper industry, Foster noted.

The third reason for newspapers to change is that products are now being marketed differently. Local merchants no longer assume responsibility for advertising national products. They are more likely to promote an unadvertised in-house brand that helps protect their margin.

Everyday low pricing and manufacturer stores are a strong retail trend that generally disregards newspaper advertising. …

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