May 30, 2006

Advertising the Wrong Message

NAA Ad camapaignSteve Outing has it exactly right in panning the Newspaper Association of America's hokey $50 million ad campaign, which seems intended to reinforce the view that newspapers are intended to serve coupon-clipping octogenarians rather than, well, anyone else.

Outing writes (emphasis added):

"The old-fashioned, Rube Goldberg-esque ads send exactly the wrong message. How about a campaign that emphasizes the power of print plus online; that shows how newspapers are no longer about print dominance and have some of the strongest websites on the Internet; that show that newspapers understand the Internet, embrace it, and aren't fighting it?"

The NAA ads are defensive, highlighting the past rather than the future. Even the slogan takes a swipe at the dynamics of newer media - A Destination, Not a Distraction.

Outing also points to the report last week by Merrill Lynch analysts on the outlook for newspaper economics. The title of the report says it all: "DEEP Depressing Dive."

Analyst Lauren Fine not only sees newspaper ad revenue this year rising at less than the rate of inflation (only 1.2 percent), but warns that to compensate for the loss of print revenue newspaper companies are "being too aggressive with their online pricing," meaning these companies, which are accustomed to obese margins in print are trying to transfer the same pricing power to the Web.

It's greedy, Fine implies, and it won't work because newspapers' digital competitors "are either not charging or charging lower prices as they seem more motivated to use the traffic being generated by the listings to offer other wraparound services." In other words, they're more interested in building audience first, then revenue.

Newspaper revenue is not going to keep pace with costs. With more and more advertisers opting for Web over print, newsrooms can expect more editorials cuts. [Read: Classifieds Shift Online and Da Vinci, Da Movies, Da Money, Da Lost Opportunity.]

The business model is failing, the editorial model is losing relevance. I've said it before:; I'll say it again: Reinvent or die. [Read: If Newspapers Are to Rise Again.]

Fine says the same thing her way: "I have not completely lost faith, but I still think the economic climate is going to be challenging ... the point is that newspapers need to change."

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Posted by Tim Porter at May 30, 2006 09:38 AM
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