According to a recent advertising forecast released by the Newspaper Association of America, dollars spent on advertising for 2001 will increase, but at a rate lower than the previous year.
The forecast stated a 5.1 percent year-over-year gain.
Last year brought businesses, including newspapers, an economic boom. The dot-com industry was soaring with self-made millionaires, unemployment was at a record low and consumer spending was high.
But with major retail stores closing their businesses, once high-flying Internet companies filing bankruptcies and a general softening in sales, some predict 2001 may bring problems for newspapers that depend on retail and dot-com ads for profit.
“If newspapers have a poor first quarter there will be some cutbacks,” said Scott Little, president of Media Recruiters, an employee recruitment firm for the newspaper industry based in Acasadero, Calif.
A cutback in consumer confidence and the folding of dot-com companies that were once strong advertisers are some of the factors that are making it tough for some newspapers to find solid advertisers, Little said.
“There are a number of people who buy newspapers mainly for its advertisements , classifieds, store ads. If newspapers lose advertisers, they run the risk of losing readers,” he said.
Still, Little remains optimistic about the fate of advertising for this year, saying this is a “trend that newspapers are on top of.”
– Ups, Downs Come With The Territory
Some local advertisers say these ups and downs of whether to advertise come with the territory.
Ann O’Shaughnessy Burke, advertising director for The Southern Cross, No. 3 on The List, is one of them.
The San Diego Business Journal’s List of Area Newspapers features 11 newspapers ranked by audited average paid circulation figures.
The name of the game is replacing old advertisers with new ones, said Burke, who runs the advertising department for the Roman Catholic interest newspaper as a one-woman show.
Burke cited the loss of tourism advertisements for trips to The Holy Land and itinerary provided by the Israeli Tourist Bureau as an example of how she, as an advertising director, “toughed it out.”
Ongoing political conflict in Israel caused the bureau to withdraw its full-page ads from the paper.
“We lost them, which was a major hit, but we’re trying to make it up with something else,” she said.
– Editorial Content Dominates Paper
For a newspaper whose ratio of advertising to editorial content is 25 to 75 percent, finding solid advertisers may not be as serious of a problem than for a paper that highly depends on it.
“The same trends that are affecting the (national) market are affecting us,” she said, but added that niche publications have certain advantages over national ones.
“People are beginning to appreciate the power of the niche market,” Burke said.
In the case of The Southern Cross, it’s the quality of the editorial content on a local, national and international basis that increases circulation and advertising, Burke said.
“The editorial background presents a positive image and also lets people know about a core religion,” she said, which appeals to many advertisers, who are family-owned businesses and schools.
“We see our ad revenue staying about even (for this year),” she said.
– Every Year Is Challenging
For Yolanda Dominguez, advertising manager for the San Diego Commerce, No. 10 on The List, this year is no tougher than years past. She predicts some of the challenges will taper off toward the end of the year.
One of the challenges has been a decrease in the number of classified ads in the print medium, being replaced online as advertisers take their business to the Internet. It can be detrimental to a newspaper whose advertising ratio to editorial content is 70 percent to 30 percent.
Dominguez attributes the move of classified ads to self-proprietors who find they can get more response online than through print, not to mention it’s convenient and cost-effective.
“It’s expensive to advertise, so between the (San Diego) Union-Tribune and us, sometimes advertisers decide to go online because you can get a much bigger circulation throughout San Diego,” she said.
But not everyone will use a computer, said Dominguez, and some may prefer the more traditional approach of print to look for classifieds.
If that’s the case, advertising directors should focus on the volume of news the reader can’t get on the Internet to use as a selling point to advertisers, Little said.
“The kind of news you just don’t get anyplace else, this should be the mantra,” he said.
– Need To Provide Personal Service
Advertising directors need to get out from behind their computers and spend more time with major accounts and customers “face-to-face,” he said.
He suggests newspaper advertisers become innovative in implementing alternate solutions, and more importantly, listen to customer needs.
“It’s a problem, but it’s fixable,” he said. “(To solve the problem) just demands a different mindset.”
The San Diego Commerce has developed an alternative solution and that is approaching corporate media, such as radio and television stations, along with advertisements on buses. Dominguez said contracts should be finalized later this year.