Backchannelmedia

Akron Beacon Journal (Akron, Ohio)

By Dave Scott, The Akron Beacon Journal, Ohio

Apr. 26--he newspaper of the future will flash across your telephone screen and come every minute into your instant messenger.

It's already on your computer screen, on a video billboard downtown and in publications delivered in the mail, whether you asked for it or not.

Change is coming fast, threatening to turn the dominant paper product into scores of niche markets linked to the digital revolution.

And a driving force in the business of changing newspapers will be the advertising that provides 80 percent of the industry's revenue.

The digital age has not just given advertisers more places to show their wares; it also has raised expectations for how the results of ads can be calculated.

An online advertiser can tell customers exactly how many times consumers clicked on a particular ad. That single click also can tell those ad buyers a lot about who those consumers are, what Web sites they like, what they have bought in the past, how old they are and where they live.

As a consequence, ad buyers expect to zero in on exactly the group of people likely to buy their products. A mass medium like a newspaper or television station might be considered wasteful because the ad is going to a lot of people who are not candidates to buy. For example, the advertiser might be reaching out to men, but more than half of a newspaper's readers are women.

Outsell Inc., which advises media on advertising, said advertisers are demanding to know more about who will see their ads.

"Advertisers are hooked on the results they're getting from targeted and measurable online marketing methods," an Outsell report said.

Akron ad executives have heard the same thing.

"For the last five years, a main topic of conversation when you sit down in a room (with advertisers) is effectiveness," said Carol Howell, vice president of media at Malone Advertising. "Those people are talking about the decline of effectiveness of advertising for newspapers."

Jack DeLeo, president and CEO of Hitchcock, Fleming and Associates, had a similar experience. "This is the first year we have been moving ad dollars from newspapers to online -- but many of them are going to newspaper sites online."

Howell and DeLeo agreed that newspapers remain a dominant force in advertising. It's the future that brings worries.

Newspapers, of course, have Web sites, but Chuck Richard, vice president and lead analyst of Outsell, said they haven't made much money.

"Newspapers haven't hit the sweet spot of getting people at their moment of need" on the Web sites, he said.

The Newspaper Association of America estimates $46.7 billion was spent on newspaper advertising in 2004, the most recent figures available. That compares to $46.2 billion for broadcast television and $52.2 billion for direct-mail advertising, also slow-growing media.

The Interactive Advertising Bureau estimates online advertising for 2004 was $9.6 billion. The same group estimated 2005 online revenue at $12.5 billion.

Fragmented market

Beacon Journal Publisher James N. Crutchfield is quick to point out that the Akron paper is the big dog among advertising media in the area. "Newspapers, in general, are the only mass media out there," he said. "Everybody else is really fragmented."

A single television station has hundreds of competitors on cable TV, he said. Even the most popular morning radio station in the area, WNCX-FM, reaches only 1.5 percent of the market. Beacon Journal promotional material claims to reach 37 percent of the morning market. All of morning radio combined reaches 21 percent.

But ad buyers say a fragmented market might be just what they are looking for if it means getting their message to only those in targeted groups.

"The most effective campaigns involve a mix of media rather than any single medium," Howell said.

Asked about the future of advertising, DeLeo said: "It will be everywhere. We just have to come out in different places."

In response, the Beacon Journal is devising an array of products to meet special needs.

"We learned from the railroads," said Bradford S. Hagstrom, the Beacon Journal's vice president/advertising. "They were really in the transportation business."

While the railroads were left at the station as trucking and air transportation grew, Hagstrom is determined to develop new media for the business of delivering information.

Other than the newspaper, the Beacon Journal publishes five niche products: Cars.com Weekly, Careerbuilder.com Weekly, Luxury Living, Brides and Parenting. It also has seven special products, including those little sticky advertising notes put on the front of the paper, plastic bags with printed ads and the Homehunter magazine with real estate ads.

Electronic products include Ohio.com, Careerbuilder.com, Cars.com, the Video Billboard on the Beacon clock tower and Shop Local.

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And the regular newspaper has a way of getting small, too. Crutchfield said the paper can offer advertisers distribution areas smaller than a ZIP code.

"The way we go to market is really customer-centered," Hagstrom said.

Crutchfield and Hagstrom declined to provide data showing the progress of ad sales over recent years.

Industry observers, however, say the news is not good, especially for newspapers.

The Newspaper Association of America reported newspaper advertising sales increased only 0.41 percent for the fourth quarter, the period that includes the Christmas shopping season.

Slow growth

Outsell says slow growth is common to all print products. It predicts 2 percent growth this year for newspapers and magazines, 1.5 percent for direct mail marketing, 3.3 for trade magazines and 2.2 percent for custom print publications.

By comparison, Outsell predicts 19 percent growth for online products. It also says blogs and wireless messaging, media that didn't even exist a few years ago and amount to only 2 percent of total advertising spending, will grow by 43 and 19 percent, respectively.

But it was the Akron area's economy that prompted McClatchy Co. to sell the Beacon Journal. (McClatchy is selling 11 other Knight Ridder papers for similar reasons).

Crutchfield said that's not news to anyone who follows the economics of the area.

"It is a connotation about Akron more than anything," he said. "This is a slow-growth market."

The plan is to emphasize the newspaper's status as a mass medium with 62 percent market coverage on Sundays and 50 percent during the week while creating new electronic and niche markets, he said.

"Print, TV/radio and events will lose share in the marketing mix, but they don't come close to being blown away," the Outsell report said.

Asked about the long-term future of newspapers, Outsell's Richard offered hope.

"It's absolutely not death," he said. "It is a model that has been honed over centuries and will not die."

Dave Scott can be reached at 330-996-3577 or davescott@thebeaconjournal.com.

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Copyright (c) 2006, The Akron Beacon Journal, Ohio

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