With full-page ads for local and regional advertisers under pressure from the economic downturn, newspapers are looking beyond such ROP stalwarts as department stores and are offering new ROP variations.
This isn't to say ROP advertising is on a steep, unalterable downward spiral. Publicly traded newspaper publishers such as Media General, whose 25 dailies include The Tampa (Fla.) Tribune, report seesaw results for retail ROP while preprints are chugging ever upward.
"The most striking trend we continue to see is the shift from ROP to preprint," Gary Watson, president, Gannett Co.'s newspaper division, told investors in March. The nation's largest newspaper publisher with 100 dailies, Gannett reported a 3% revenue increase in local advertising, the bastion of ROP, in February vs. a year earlier, on a pro forma basis, while ad volume, or linage, in the category fell 2%. At the same time, preprint distribution grew 10%.
THE BIG SHIFT
For the same month, retail linage at McClatchy Co., which owns 11 dailies including the Minneapolis Star Tribune, grew 1.8% while preprint volume swelled 6.5%. E.W. Scripps Co., whose 21 dailies include Denver's Rocky Mountain News, reported local revenue in February inched up 0.7% to $13.8 million, while preprint revenue jumped 10% to $9.3 million.
"Newspapers have got some very unfavorable long-term trends to deal with," says Ed Atorino, a director of investment bank Blaylock & Partners. Consolidation has reduced the ranks of department stores and other retailers, he notes. "Some of the growth categories are simply not sectors that go to newspapers," Mr. Atorino says.
So is it RIP for ROP? Will display ads succumb to preprints? Not likely. Newspaper executives, their turnaround skills tested by the months-long dive in recruitment ad revenue, are reinventing ROP. They're wooing smaller businesses, the kind more typically found in Yellow Pages, to ROP. Another tactic is to trade frequency for size-accepting the fact that ROP ads are getting smaller, but convincing advertisers to go ROP more often.
At Tribune Co.'s Orlando Sentinel, "We've been told point-blank by some of our grocery advertisers that they're reducing ROP by diverting it to loyalty programs," says Barry Haselden, retail/general manager. At the same time, supermarkets have added midweek ROP buys featuring "hot prices" to drive traffic, he notes.
Newspapers are using ROP to build a new customer base.
Media General's Richmond (Va.) Times-Dispatch offers ads on Post-it note sheets affixed to the paper's front page.
Local retail ROP at The Columbus (Ohio) Dispatch was "up substantially last year. There's a lot of untapped opportunity there," says VP-Advertising Tim Doty. Because parent Dispatch Printing Co. owns several non-daily papers, ROP ads can be sold in two tiers.