Newspaper Advertisers Want Web Action Too
Newspapers might be a mediocre investment for the Warren Buffetts of the world, but they hold the potential to become excellent vehicles for the Procter & Gambles of the world, a top Wall Street analyst said last week. But to garner more advertising, they need to align their Web offerings with their print product.
“Newspapers have a lot to offer, but they have to learn how to sell well,” said Laura Davies Fine, first vice president/managing director at Merrill Lynch, where she follows newspaper stocks.
Speaking at the Association of National Advertisers’ annual Print Forum in New York, Fine cited the joint venture of Gannett Co., Tribune Co., and Knight-Ridder, in which they invested in two online companies: CareerBuilders, a classified jobs company; and CrossMedia, which last year launched ShopLocal.com, which lets people browse online and buy in person.
‘ShopLocal is intended to help retail advertisers become more effective online and really try to become a vehicle for running certain types of ads,” Fine said. “It does not have a lot of traction yet, but if I were to become CEO of a newspaper company, this is what I’d be doing. I’d have new services for you.”
CareerBuilders, meanwhile, has already added significantly to the companies’ revenues, according to Gannett’s annual report. Online revenue for Gannett’s local newspapers grew 60% last year, while online sales for the company’s “USA Today” newspaper increased 48%.
Newspapers have also failed to recognize that fragmentation is not the only reason they have lost readers, Fine said. They never picked up on the younger market’s distaste in having marketing messages pushed into their face.
“My children don’t like being advertised to,” Fine said. “They like to go and get it. If you don’t have a good Website, you’ll never get my kids’ money.” If newspapers supply information online that the elusive younger market wants to see, they too could share in the spoils.
By the same token, newspapers should consider marketing individual sections online. Local advertisers might pay for a metro page sponsorship online, for instance, because more local consumers would be likely to access such a page.
