Niche Info Online Business

Publishers at marketing meeting say newspapers have to be aggressive innovators to fend off competition.

By Marcelo Duran
Associate Editor

ORLANDO, Fla. — It’s not easy reinventing a newspaper when the newspaper itself is the one spreading the bad news.

But that’s just one of the obstacles Brian Tierney faces as he attempts to revitalize The Philadelphia Inquirer and Philadelphia Daily News.

“If there’s one thing I’ve noticed about newspapers, it’s that there isn’t an industry out there that doesn’t kick itself in the rear end more frequently and more dramatically than this business,” said Tierney, chief executive officer and publisher of Philadelphia Media Holdings.

Tierney, along with Michael Reed, president and chief executive officer of GateHouse Media Inc. and William Dean Singleton, vice chairman and chief executive officer of Media News Group, were the keynote speakers at this year’s NAA Marketing Conference.

Their message: Newspapers need to be aggressive innovators to fend off stiff competition in their quest to achieve local news dominance and ad dollars.

Tierney, the former advertising executive who implemented a number of new initiatives at the Philadelphia papers, said that newspapers are doing a disservice to themselves by focusing too much on the negative business and not enough on the positive.



Burying the lede

Case in point: When The Inquirer reported its first circulation gains in a number of years, the story was buried on page 3 of the business section.

“You will never see Brian Williams begin his broadcast by rending his garments and saying that a third of the people who used to watch me aren’t even watching me anymore,” Tierney said.

What newspapers are dealing with is more competition and it’s important to maintain their local audience.

“Let’s talk about the assets that we have,” said Tierney. “There are all kinds of challenges out there but I really see as an outsider the strengths of the industry and we need to understand them, focus on them and invest in those and get over it.”

A key part of Tierney’s strategy is to attract women aged 35 years and up.

To that end, Philadelphia Media Holdings launched several programs geared toward wooing that demographic, programs involving targeted advertising and promotions (see sidebar).

He also stressed papers should launch low-cost experiments and explore e-commerce initiatives.

But more importantly, he said, newspapers need to promote the value they provide their communities.

“We’re proud to put on the front of our Sunday paper (that the paper) contains $722, or $638, worth of coupons inside,” he said. “The journalists don’t exactly love that but I’ll take them anyway I can; If that’s what it take to get our consumers to come out with a little bit of kibble like a deer in the woods.”



Moving ahead

Singleton stated that while the United States is poised to enter a recession, now is the time for newspapers to move forward with the right strategies.

The key focus for newspapers is to protect and serve the core printed product and to expand the online business and develop new niche products, he said.

“Right now we are facing a secular and cyclical downturn and it’s important not to get the two mixed up,” said Singleton. “We’ve been going through secular change for several years. Our core has been smaller, advertisers have been shrinking while our online has been growing.”
Real estate and job listings may never come back to printed newspapers, but newspapers can still attract these revenues in their electronic editions, Singleton said.

He said he expects online revenues to contribute 20 percent of MNG’s sales by 2012 while sales from print advertising generate 65 percent. The remainder, he said, will come from niche and specialty products. According to a memo he issued in late 2007, Singleton said MNG currently gets 89 percent of its revenues from display advertising while online contributes about 7 percent.

Reed, meantime, said the industry has to continue to invest in and train its sales force.

“We have gotten increasingly complex compared to 20, 30, 40 years ago when we just put our daily newspaper on the street,” Reed said. “That’s not the case anymore. We have a plethora of niche products, weeklies, monthlies, special sections, and our daily and online products.”

Newspaper sales reps must know the product mixes, the community and the competition and be willing to change. Singleton stressed feet on the streets, while Reed said his company’s strengths lie in knowing the community and integrating the newspaper within that market.

As a result, GateHouse, which largely owns newspapers in small and mid-sized markets, has been able to avoid some of the classified revenues meltdown and cyclical downturn that’s affected its larger counterparts, Reed said.

As for feet on the street, “You can’t sell what we have to offer if you don’t have people to sell it,” Singleton said.

“We need to sell to the advertisers and more importantly, the customers we don’t have, and find out what problems we need to solve, what solutions we need to provide for them.”

Still, Tierney said, the severe cost pressures newspapers are now facing won’t end anytime soon. Trimming staff, he said, is a consequence of the current business environment.

“Quite frankly, there’s a sense of entitlement and lamentation about the past and the core of our employees (is) not stepping up to the game the way we need them to,” he said.

“We are changing that mindset. We have been able to redo our contracts with union leaders to get that and they’ve been helping getting people up and out who do not want to step up to the game.”

Yet even as newspapers are forced to resize their operations, publishers still must be open to new ideas and take chances when appropriate, Tierney said.

“The key is to experiment, to make a lot of small bets. Don’t bet the house on any one thing, but why not try something with a small investment but high potential down the road,” he said.