“Yesterday's news is tomorrow's fish and chip papers,” a wise man once said about newspapers.
Over the past decade, the Internet has transformed the news cycle. By the time tomorrow's newspaper arrives on the doorstep, its content is at least eight hours old. Everything in it, except for the ads, has likely already appeared online.
The Internet's compression of the news cycle is only one of the changes placing economic pressure on newspapers and newsweeklies. The Internet has also fostered new business models, such as Monster.com, eBay and Google, that have siphoned advertising dollars away from newspapers, particularly in the classified section.
The burgeoning recession appears to be bringing to a head the woes that have been brewing for the print news media for a decade and raises the question of whether the viability of newspapers and news- weeklies for b-to-b advertisers is being threatened.
With options from search engines to trade publications, b-to-b advertisers are selective as to which print newspapers receive their ad dollars. “The only newspaper we've been in in the past year and a half is The Wall Street Journal,” said Mike Paradiso, VP-global media director for CA. “We've always found efficiencies in the national papers that do have a big footprint, meaning the Journal, The [New York] Times or The Washington Post.”
Here is a sampling of the bad news for newspapers and newsweeklies that has recently been announced by publishers, including layoffs, drops in print advertising revenue and changes in frequency:
-The Christian Science Monitor, which currently publishes on weekdays, plans to scale back its print publication to once a week in 2009. It will continue to publish up-to-the-minute reports online at CSMonitor.com.
-U.S. News & World Report reportedly will become a monthly publication and abandon its direct competition with newsweeklies Time and Newsweek. The magazine had previously issued a statement that it would become a biweekly.
- Time Inc., publisher of Time and Fortune, reportedly plans to slash 600 jobs.
- McGraw-Hill Cos. cut 270 positions in the third quarter on top of previous job cuts totaling almost 1,000 since 2007. The company said that $13.9 million of its $23.4 million restructuring for the quarter stemmed from its information and media group, which includes BusinessWeek.
- Condé Nast Portfolio plans to reduce its frequency to 10 times per year and cut jobs.
- Gannett Co., publisher of USA Today, reportedly plans 3,000 job cuts.
- Tribune Co.'s Los Angeles Times plans to cut 10% of its work force.
- The New York Times Co. announced that its third-quarter print advertising revenue declined 14.4% compared with the same period last year.
- The Seattle Times Co. said it planned to cut as many as 150 jobs, many of them in its newsroom.
Even as newspapers roll their presses to print bad news about themselves, b-to-b marketers continue to advertise in them, at least in the national papers such as The New York Times and The Wall Street Journal. (The Journal was rare among newspapers in that it actually increased its circulation in the most recent six-month reporting period.)
“I think for a b-to-b advertiser, there are plenty of choices, such as specialty publications,” said Rick Edmonds, media business analyst with the Poynter Institute. “A computer solutions company can advertise in magazines and newsletters reaching specifically a set of people they want to reach. I would see a newspaper buy to some extent as secondary.”
A perusal of the <i>Journal </i>and <i>New York Times </i>reveals a strong presence of b-to-b advertising aimed at top executives. A recent edition of the <i>Times</i>, for example, included a full-page advertisement for Autonomy Corp., a company that provides online discovery services for attorneys. The <i>Times</i> reported that corporate and financial services were among the few ad categories that grew in September compared with the year-earlier period.
B-to-b advertising appeared even more robust in a recent edition of the <i>Journal</i>. In addition to an ad from Autonomy, Vestas Wind systems, an energy company, and Avantair Inc., a fractional jet ownership service, were among the b-to-b advertisers in the newspaper.
Of course, these newspapers also offer advertising online and are attracting b-to-b ads there as well. Online remains a bright spot, sometimes a lonely one, for newspaper companies. NYTimes.com had 20.1 million unique visitors in September, an increase of about 37% over September 2007.
“Online advertising grew 10.2% in the [third] quarter, in part due to the introduction of new ad formats. In total, our online revenues now account for 12.4% of the company's revenue,” Janet L. Robinson, New York Times Co.'s president-CEO, said in a statement.
But while online advertising provides growth opportunities, it presents problems as well. Newspaper and newsweekly publishers find it difficult to replace lost print ad dollars with online ad revenue. The inability to generate enough advertising inventory is due in part to a lack of reporters to generate content. Additionally, as Edmonds pointed out, the surfeit of competitive advertising inventory on sites—from Google to MSNBC.com to blogs commenting on the news stories produced by newspaper reporters—has the effect of holding down the prices of Internet advertising.
In print, the advertising decline's impact on the news hole could make newspapers less important to readers. “As the paper gets smaller, there's a smaller space for news,” Edmonds said. “So the question becomes, does [the paper] retain the same appeal to readers and to advertisers? I think we're kind of testing that out.”