Turning Points 2008: The Death of Print

Discussion
Dec 10, 2008

By Tom Ryan

Editor’s note: In what
we plan to make an annual end-of-year tradition, RetailWire has compiled
a list of the most significant retail industry “Turning Points” of
2008. (See
our news release…
) What follows
is the first of a series of 12 discussions based on the list.

Retailers and brands
continue to look to newspapers, particularly Sunday circulars and free-standing
inserts, to most directly communicate with customers and drive traffic.
But steep advertising and circulation declines along with the massive staff
layoffs this year have caused even dedicated readers to wonder whether
newspapers have a future.

In the third quarter,
revenues declined 11 percent at Gannett, nine percent at The New York
Times
, and 16 percent at McClatchy. Given that television news viewership
in the period grew robustly due to the U.S. presidential campaigns and
the Beijing Olympics, the results were especially disappointing. With advertising
revenues expected to receive another series of hits from the recession,
Fitch, the debt ratings agency, last week predicted several cities could
go without a daily print newspaper by 2010. Just this week, Tribune Co.,
publisher of the Baltimore Sun, Chicago Tribune, and Los
Angeles Times
, became the first major newspaper publisher to file for
bankruptcy protection.

The causes of the diminishing
readership are readily apparent: television news viewership has expanded;
the internet has taken away readers as well as essential advertising streams,
such as classifieds; and all the while, environmentalists complain of print’s
impact on trees.

More recently, some wonder
if the newspaper product has gone down hill with all of the bureau closings
and layoffs. A recent New York Times article compared the situation
directly to Circuit City’s decision in March 2007 to fire its most experienced
employees to stave off competitive pressures.

“Circulation declines
were deeper in the last period, and I have to say that I think it has to
do with the quality problems from cuts,” Ken Doctor, a media analyst
at Outsell Inc., a market analysis firm, told the Times. “It
is not just the cutting, but the cutting of more-experienced staff, a kind
of slow-motion suicide. Circuit City cut its own throat by not realizing
what their competitive advantage is, and newspapers are doing the same
thing.”

But a PEW survey of newspaper
executives in July found that cuts to crossword puzzles and TV listings
were the biggest complaints from readers, rather than decreasing news quantity
or quality. To little impact, newspapers have cut pages, shortened stories,
combined sections, reduced foreign and national news, while strengthening
local news and continuing to focus on investigative reporting.

Newspapers hope online
journalism eventually pays off, but any successes on the internet side
have been more than offset by the print declines.

One believer is Rupert
Murdoch, the chairman and chief executive of News Corp. In a recent speech
entitled “The Future of Newspapers: Moving Beyond Dead Trees,” the
media mogul, who counts The Times of London, The Wall Street Journal and The
New York Post
among his properties, said that while some newspapers
will lose circulation in coming decades, people are “hungrier for
information that ever before” and still look to newspapers as trusted
sources. Moreover, critics underestimate how online news sources will expand
rapidly not only through web pages and RSS feeds, but also e-mail that
delivers customized news and ads to mobile devices.

“In this coming
century, the form of delivery may change, but the potential audience for
our content will multiply many times over,” he said.

Discussion Question:
How are the problems at newspapers transforming the way retailers communicate
with consumers? Are other media (TV, internet, etc.) proving to be
as or more effective in driving home brand messages and store traffic?

Please practice The RetailWire Golden Rule when submitting your comments.

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27 Comments on "Turning Points 2008: The Death of Print"


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Doron Levy
Guest
Doron Levy
13 years 5 months ago

Loyalty programs have proved that we can send an email to our customer and they will actually read it. I think the internet is going to play a big part of the retail medium. Most grocers now post their weekly circular online and will even automatically email it to you if so desired.

I also think we are a long way from the death of the paper weekly feature. Now that consumers are in value mode, I think most look forward to ripping apart the Saturday or Sunday edition to look for deals.

Paula Rosenblum
Guest
13 years 5 months ago

I think the Sunday FSI (Free Standing Insert) remains an important vehicle for retailers…along with some Saturday ROP (Run of the Press). Weekdays–eh…I don’t think it adds up to much.

You know, catalog retailers would love to stop mailing catalogs because they’re so expensive…but those catalogs drive traffic to their web sites (a bit hard to verify sometimes, but empirically this seems correct). I think the same is true with the print ad. While customers may use the FSI as a jumping-off point to check prices of comparable items on the web, the FSI is the initial driver.

Newspapers will remain. They just need a bit of model tweaking through cross-channel monetization.

Tony Orlando
Guest
13 years 5 months ago

As a supermarket owner, I still get a huge response from our local print ad. Radio does nothing for me, because shoppers in my business are looking for that super meat deal of the week, and I’d be foolish not to provide that in print form.

I also have been emailing my ad to customers for over 6 years, and it works well, too. My ads in print must always be bold, and timely, or I’d be throwing money out the window.

A combination of internet and print work well for supermarkets, and always will!

Bill Bittner
Guest
Bill Bittner
13 years 5 months ago
The future of print promotions is particularly bleak as the investment in infrastructure, specifically broadband delivery, brings down the “digital divide.” This hurdle has limited the reach of many online promotions for retailers whose business depends on volume, such as supermarkets. The second hurdle has been the inability to detect fraudulent online offers which leave retailers holding fake coupons that are created on home computers. Both these issues will take to time to resolve so the short term problem for print promotions is how to get them out to consumers if a newspaper company is not throwing them in everyone’s yard. I get a morning paper, but about six months ago there was another package in my yard. In fact, it was in my neighbors’ yards too. It turned out to be a whole bunch of inserts that normally would have appeared in the Saturday newspaper bundle. I don’t know who distributes this bundle. I assume it is someone besides the newspaper company (or at least the Wall Street Journal) because it comes at a… Read more »
Cathy Hotka
Guest
13 years 5 months ago

Another way to look at this is retail’s ability to shape the newspaper industry. Customers are online! And retailers can interact with them there. I worry about the newspaper industry’s ability to bounce back from retail’s “discovery” of Web 2.0, which will undoubtedly blossom during 2009.

Max Goldberg
Guest
13 years 5 months ago

Grocers, department stores, mass merchants, specialty stores and other retailers that traditionally have made extensive use of print to advertise need to look at and experiment with other media. Buying more television advertising is not the answer.

The key is to figure out which are their most important customers (the top 20-30% that account for 80% of sales) and learn how those customers want to be communicated with.

We recently had a question about loyalty programs. As media fragments, these programs will become increasingly important as data collection and information dissemination devices. Advertising must be delivered when consumers want it, in the manner they would like to receive it. Welcome to consumer 2.0.

Gene Hoffman
Guest
Gene Hoffman
13 years 5 months ago

Ah, Newspapers! I know them well from my era with two great papers of their day in Chicago and Philadelphia. What great salesmen they were. Perhaps the death of that great salesman, the newspaper, is predetermined–perhaps not. But like so many things in this fast-changing world, other conduits for faster communication are appearing and taking a portion of yesterday’s newspaper’s place in our commercial lives and I pout in pain over the loss of newspapers’ potency.

And being a former retailer in St. Louis, Cincinnati and Minneapolis, I must now look for a more effective bridge to the consumer among the many methodologies available–but is there really just one that is as effective today as newspapers once were? Thus the glorious quest for retailers is to find the most cost-efficient “newspaper of tomorrow” to tell their sales story. May it be be out there among the proliferating new mediums to the consumers’ wallet.

Matthew Spahn
Guest
Matthew Spahn
13 years 5 months ago

Retailers have been continuously looking for ways to optimize their newspaper expenditures which is a combination of reducing unproductive distribution while still reaching the best customer segments. I believe that smaller community newspapers will actually thrive in the wake of major daily newspaper struggles. The local content is too valuable. We will also see improvements in digital newspaper offerings for retail advertisers soon.

The big reality check here is that the other media channels are not well positioned to fully pick up the slack. Fragmentation of media and massive clutter makes it difficult to obtain effective reach that importantly, is engaging.

The good news is that retailers are getting more sophisticated with collecting customer data and technology is rapidly improving which is a formula for more effective customer connections that deliver relevant messages to the right segments.

Art Williams
Guest
Art Williams
13 years 5 months ago
Newspapers are in a very difficult situation and must be careful as they trim costs. I’m not surprised to see that the largest complaints are about cutting crosswords and TV listings. A favorite part of my daily ritual is reading the day’s news in depth at breakfast followed by enjoying the crosswords later in the day. I was particularly irked at the elimination of the daily TV listings as this was a quick, easy way to examine the choices for the evening’s TV viewing. The paper responded to my complaints that I should look up the listings in the weekly TV guide. I don’t always have the weekly guide with me when I’m eating breakfast out and don’t like having to keep it all week just in case. So, they alienate one reader with the crosswords, another with the daily TV guides and others with less content and the first thing that you know, they have a major decline in readers! I’m not sure what the final answer is but I really hope that the… Read more »
Susan Rider
Guest
Susan Rider
13 years 5 months ago

Advertising is in the process of an evolution to match the changing demographics and their habits. If a paper has not evolved to become creative with net advertising, text messaging, and other forms to bundle their package to insure a greater share of the marketing budget it may be too late.

Absolutely, other forms of advertising are proving very effective, just ask our new President-Elect.

Don Delzell
Guest
Don Delzell
13 years 5 months ago
Some form of print distribution of news and entertainment content is likely to continue in most metropolitan locations. At least for the near and mid-term future. Probably. However, that isn’t the question asked. The question is, how are the very clear and evident problems of print media transforming the way retailers communicate with consumers? In reality, not much at all. Posting the circular online really isn’t “transformational” in communication. It simply makes exactly the same information available through a different medium. Advances in display have now made it possible to easily create shopping lists from these e-circulars and then print, or simply print the lists from each page. These are important and necessary. To the extent that online location of circulars is an element of the marketing mix (and it should be) then technologically the retailer must do whatever is possible to allow the consumer to USE that circular in a similar way to how they use the existing print version. The truth is, retailers continue to communicate with consumers on the basis of high-clutter,… Read more »
Gene Detroyer
Guest
13 years 5 months ago
We see certain topics on these discussions that strike me as being very observable and anecdotal. This is one of those. All the parts of the Sunday New York Times that aren’t related to up to the minute news arrive on Saturday. When I pick up the paper, I take out the Saturday Times for reading and all of the advertising inserts. I take the advertising inserts in hand and they go straight to recycling. If there are retailer ads in there, we never see them. I noticed my son has the exact same habit and it is not because retail doesn’t interest him, as that is his business. The flyers we get in the mail, get much more play. The weekly grocery flyer gets reviewed and noted. The department and specialty stores offers get scanned. The advertisers are wasting a lot of money to reach my household or that of my son. I don’t imagine that we are especially unique in our behavior. My thirty something daughter’s household doesn’t look at the inserts either,… Read more »
Camille P. Schuster, Ph.D.
Guest
13 years 5 months ago
Has anyone done any research to see how consumers LIKE to use the newspaper? Some really like it for entertainment value with the puzzles and horoscopes and letters to Ann Landers, and/or local columnists. Some really like it as a learning tool–how to improve their bridge game. Some like to really know how all the local sports teams did, or the college teams or the pro teams. Some really like to read the letters to the editor. Some really like to read the editorial page. Some really like just the news: local, national, and/or international. Some really want to know what’s on sale in the local market. Does anyone read the paper from cover to cover? How many people? I don’t know but would guess that’s a small percentage. Since so many people want so many different things, creating one paper to satisfy all those needs is difficult. Maybe the puzzle/learning version could come out once a week and people could subscribe to just that version. Maybe each of the sections could have a cost… Read more »
Joel Warady
Guest
Joel Warady
13 years 5 months ago
Murdoch is correct when he points out that newspapers continue to be seen as the trusted source. However, the question that begs to be asked is do newspapers have to remain ink on paper? Can the trust that they convey as a branded deliverer of information, be properly exported to other technology? If I had my choice, I would prefer to have all my special offers, and all of my coupons delivered to my iPhone. I don’t want to have to clip coupons; I would like to have them end up in a folder on my iPhone, and when I am in the store, and am at the check-out lane, I want to be able to scan the coupon that sits on my iPhone, and get the discount. Further, I want the retailers who have special offers to send them to my iPhone, and when I am within a 2-mile radius of the store, based on my pre-determined list of products that I want to purchase, an alarm will go off on my iPhone telling… Read more »
Ken Wyker
Guest
13 years 5 months ago

Print will decline, but it won’t go away entirely because it’s still an effective mass communications vehicle.

Consumers are asking for less mass/broadcast advertising and more personalized communications, which are better delivered through email and the Internet. As retailers adapt their media mix toward more targeted communications, print vehicles will steadily lose market share.

Daniel Long
Guest
Daniel Long
13 years 5 months ago
As a marketing research professional and strategist in the newspaper industry, I find this article and discussion very interesting. I must say from the get-go that I agree with many points made (both positive and negative about the newspaper industry) and I disagree with many as well. From my perspective as a newspaper insider, a consumer, and a strategist that listens to consumers on a regular basis, the short answer to the questions posed is as follows. Across the newspaper industry as a whole, the problems at newspapers are somewhat changing the way in which retailers communicate with consumers much like the way problems at TV, radio, magazines and other major media are changing the way customer communications are made. Other media have certain strengths and weaknesses and are not yet proving to be as or more effective in driving store traffic, though for certain brand-building exercises, some non-newspaper media may be effective. As a consumer and researcher I believe newspapers definitely have a place in the communications channel and are oftentimes the most-preferred means… Read more »
Steven Collinsworth
Guest
13 years 5 months ago
The decline of the newspaper industry, actually the “newsprint” industry (newspapers, magazines, periodicals, etc) is too complex to say it’s one thing or another. Many factors have contributed to these events. My belief is across three, what I call “news worthy implosions.” First is the birth of the internet. So many new choices in accessibility of news, knowledge, and now “Wikipedia-style-subscriber content” have blurred the lines of what we all call news and newsworthy. Implosion because the “newsprint” industry did not handle this well at all. I could list much more, but we all have read adnauseum about this subject. Second is the “re-birth of the telecommunications industry.” After the historic split up of Ma Bell, so much happened so fast in this business the risk takers were the only ones left standing. Cellular technologies and WiFi have not only changed the means of communication forever, but have accentuated implosion #1. Finally, the third factor is the “societal upheaval of the past several decades”. The 60s, 70s, 80s, 90s and now the new century have… Read more »
John Detwiler
Guest
John Detwiler
13 years 5 months ago

Mr. Long, may I say on behalf of the others here, welcome to RetailWire. I’d like to thank you and your associates for keeping great print content and journalism alive in Fort Worth…please do all that is possible to keep it up! DFW needs a balance of available print, and your continued presence will ensure that those who might like a monopoly from down I-30 a ways will not prevail. It was most difficult to lose the Times-Herald (much less any of the choices nationwide that have disappeared in the years since). Hopefully your parent company will have the foresight to not give up so easily. I know it must be hard to make it with declining ads/revenue. Again, good to hear from you, and welcome.

Warren Thayer
Guest
13 years 5 months ago

I have doubts that webzines/web newspapers, as an economic model, can generate sufficient revenue to pay for consistent quality content. Can you even begin to fathom what a New York Times would be like online, with all the content and all the ads we normally see in the print product? The very idea is almost laughable. I do see partial migration to web content, but I think that for the next half-generation, at least, we’ll need both newspapers and ‘online’ to disseminate news.

Gene Detroyer
Guest
13 years 5 months ago

Note this headline from AdAgetoday, “Newsday Stakes Its Future on Digital Strategy.”

Craig Sundstrom
Guest
13 years 5 months ago

I think the cart was before the horse on this one: it’s the disappearance of advertisers that’s impacting newspapers, not the other way around.

All of the points made here have validity, but the real question is whether/not the numbers will work out; most of the comments have focused on the Sunday preprint (inserts), but the real problem is the drop in display and classified ads…it’s hard to imagine the latter ever returning. The current pattern is for a bifurcation (in printed media): hi-priced ($1-2) “quality” papers and free, bare-bones tabloids; presumably that pattern will carry us through the next few years, but beyond that is anyone’s guess.

jack flanagan
Guest
13 years 5 months ago
The print newspaper industry continues to overlook the elephant in the corner of the room–potential customers (readers) finding in your papers what you, the editors, want to sell, not what they (news and real analysis) want to buy. Pick up any reputable newspaper on any given day and you’ll find dozens (if not hundreds) of “facts” that simply aren’t factual. It’s hard to believe when with just a few keystrokes the real facts are available. No difficult reporting task. Seems like it ought to take fewer reporters (which of course the now-reduced editorial staffs bemoan. Additionally, the one thing newspapers can do, long-format analysis on major issues or topics not driven by the daily news cycle, they do very infrequently. So to all the print guys in deep denial I recommend you go down to the morgue and obtain a famous print cartoon from several decades ago. In the early ’70s, Walt Kelly drew perhaps his most famous “Pogo” cartoon when Pogo opines “Yep, son. We have met the enemy and he is us.”
Mark Burr
Guest
13 years 5 months ago

The decline of newspapers is solely related to different sources for news. The papers, especially the top papers, are no longer a valid source of credible news. The majority are seeking other sources for news–period. However, the Sunday paper serves a purpose of carrying the inserts. Find a new viable vehicle for that which has the same effectiveness and then I will be able to quit buying a paper for the circulars and recycling the paper without it even being opened.

Dick Seesel
Guest
13 years 5 months ago

For retailers that use print (especially Sunday circulars) as a way to communicate value on specific merchandise, this is a problem. (Think Target and JCPenney, to name just two.) Sunday tabs have been a cost-effective way to sell merchandise at the same time that broadcast and other media “sell” store image and events. There is no way to look at this week’s news (Tribune Companies filing Chapter 11 bankruptcy, the New York Times borrowing against some of its real estate holdings) as positive if you are in the print newspaper or retail business.

The challenge for retailers now is to find “new-media” ways to communicate when specific content is on sale. E-mail blasts, text messages, RSS alerts and website banners are all fine but they don’t necessarily offer the same breadth and specificity of a newspaper circular. We can expect to see retailers linking more aggressively to newspapers’ own websites with online versions of print ads–a potential win for both the store and the publisher.

Marc Gordon
Guest
Marc Gordon
13 years 5 months ago

Regardless of what anyone says, people like to hold printed materials in their hands. There is something naturally easy and enjoyable when it comes to reading pages. I believe that’s one reason electronic books have not caught on.

The question is, is a decline in readership due to the number of media options such as the web and television, or just because people are reducing their spending and the daily newspaper happens to be a casualty of that?

I for one think newspapers will be around for a very long time. And how loyal their readers are will depend more on the relevance of the content than the other sources for news.

Al McClain
Guest
Al McClain
13 years 5 months ago

Under the category of things move faster than you think, to Warren’s point above, the NY Times already is available online, with all articles and ads, in a format very similar to the print edition, via a service called NY Times Reader. It’s a bit cumbersome but looks interesting.

And, many papers including the WSJ, NYT, LA Times, Chicago Tribune, etc. have mobile editions with PDA shortcuts. For people who’d rather have credible sources of news, vs. hear what some blogger has to say about an important issue like terrorism, these mobile editions provide a great way to catch up on news from around the world while on the go.

Combine the portability of these news sources with an effective coupon delivery system and you have a real win for those consumers willing to embrace new technology.

Mark Lilien
Guest
13 years 5 months ago

Tribune went bankrupt because of the high debt. Without that debt, they’re quite profitable. Local monopolies are hard to kill.

BoatSchool is right: most newspapers are going through the motions, so they’re boring. Just like most news web sites. America’s look-alike local department stores got consolidated. They simply weren’t special, their assortments and pricing were very similar, so why not name them all Macy’s? Same with newspapers. Except for the local coverage, they’re all very similar. And the local coverage is rarely compelling.

Should this prevent supermarket ads? Not if they’re profitable. Face it, newspapers have been bores for decades. Readership declined when radio got popular, and declined again with TV.

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