When daily newspapers pass out of the hands of local families to giant media conglomerates, community residents generally are quite concerned about whether editorial coverage of their community will suffer or improve.
But at the same time, national advertisers and advertising agency media departments that repre-sent them, admit their concern boils down to whether or not the new owner will cut better deals and offer better incentive and promotion plans.
"Advertisers are concerned about ownership only in terms of what it means for their advertising deal," says Kathleen Brookbanks, senior partner-executive media director, Ogilvy & Mather, Chicago. "Major publishing companies are more likely to deal off the rate base and the rate card, and there may be better deals with a major company with many newspapers than could be had when the newspaper was in the hands of a local owner who operated only one paper."
The hand-changing is epidemic among newspaper groups. In fact, most papers with more than 100,000 circulation are owned by a company that also owns several other similar-sized publications.
Since 1993, 256 of the nation's 1,550 daily papers have changed owners while the number of newspaper groups selling to other large publishers also has increased steadily. In 1995, 75% of all newspapers sold passed between newspaper groups, up from 16% a decade ago, according to Dirks, Van Essen & Associates, a newspaper broker.
The sell-off trend is attributed to increased newsprint prices and production costs, weak circulation and competition from a variety of new media choices including the World Wide Web.
Big media groups also have a heavy hand in this trend.
For example, Gannett Co. last year added 11 dailies to its stable; Hollinger Inc., controlled by the Canadian press baron Conrad Black, added several former Thomson Newspaper papers to the 111 dailies it publishes in the U.S. The Journal Register Co., owned by the New York investment company of E.M. Warburg, Pincus & Co., also has been on a buying spree, adding newspapers in markets like Middletown, Conn., where the company already has distinct geographic synergies.
Journal Register owns five dailies and 40 non-daily newspapers in Connecticut.
NEW OPTIONS EMERGE
In general, publishers say the expanded network of publications allows them to offer more advertisers more options.
Jim Normandin, publisher, Journal Register Co., admits readers have expressed some complaints, but advertisers have not.
He cites his company's ability to provide one order/one bill to classified advertisers as a tremendous enhancement.
On the retail advertising side, Mr. Normandin says Journal Register has been able to expand the opportunities offered advertisers, including extended regional reach, display ads that run in sister publications and centralized invoicing and billing procedures.
EASY AND EFFICIENT
"We're trying to make it as easy and efficient as possible for our advertisers to place ads in one or more papers," he says. "Changes like these have been greeted enthusiastically by major clients."
DEALER SEES ECONOMIES
"After the Journal Register bought the papers, it's worked out better for us. It has better organization, and we have achieved economies of scale," says Ken Crowley, chairman, Crowley Auto Group, which has five Connecticut dealerships.
Mr. Crowley says the benefits include everything from producing one ad for all publications to working with one advertising rep to getting one invoice for the whole buy.
Issues of ownership are closely examined when it comes time to cut ad space deals, says Steve Greenberger, VP-director of print media, Grey Advertising, New York.
"Advertisers believe there may be better opportunities beyond a good rate for display ads from large media companies, whether it's in add-on merchandising, franchising or promotions. When they see that a paper has sister publications, they begin to be interested in exploring more extensive ad coverage."
WATCHING THE EDITORIAL
Other advertisers have an interest in the editorial direction of the newspapers where their ads are being placed.
Because big media companies have a reputation of revamping papers regardless of the readers' desires, Allen Banks, executive media director-North America, Saatchi & Saatchi Advertising, New York, urges advertisers to review the track record of newspaper owners to get a sense of what they have done in other markets.
"Owners do set the tone for how the newspaper does business, whether it's the actual selling of the ads or the look of the front page," says Mr. Banks.
Ownership issues tend to weigh more heavily with agencies that are actively involved with local daily newspaper advertising.
Martin/Williams, Minneapolis, pays a lot of attention to changes at local papers such as the Star-Tribune and St. Paul Pioneer-Press.
LOOKING AT LOCAL ASPECT
"Our biggest concern is that they're delivering the local aspect of the news, that it will really mean something to the community," says Lannie Dawson, VP-media director at the agency, whose largest local newspaper client is First Bank Systems.
M/Ws media executives deal directly with local newspapers for ad placement.
"It takes more time, but....we feel we can have more influence by working directly with the newspapers ourselves," she says. "We have to make sure, from an advertising standpoint, [clients'] local needs are being met."