May 14, 2007
Macy’s to Newspapers: Shape Up
By Tom Ryan
Macy’s chief marketing officer last week delivered a blunt and critical analysis as to why her company is moving ad dollars away from newspapers.
A self-proclaimed “newspaper junkie” who keeps stacks of them at home and reads several each day, Anne MacDonald said Macy’s business decisions “like yours are driven by facts and results, not emotions” and her company is very “concerned” about declining readership and circulation at many newspapers across the country according to Editor & Publisher.
“My company and I are not happy to see newspapers in decline. Newspapers deliver an immediacy that isn’t possible…newspapers help us cast a wider net than direct mail efforts,” she told publishers in a keynote presentation at the annual Newspaper Association of America conference.
But the inability of newspapers to retain current readers and attract younger ones is causing the department store to seek out different media to reach them. “The readership and circulation data is causing retailers like us to shift our ad dollars,” Ms. MacDonald said.
Macy’s also wants to project a more “upscale and fashion-forward image,” and increasingly, the retailer is turning to national fashion magazines, websites, and TV to build a national brand. She noted that local and national newspapers still serve as a critical vehicle to advertise specific items and promotions.
“The daily newspaper remains a very good tool for Macy’s; that’s the good news,” said Ms. MacDonald. “The problem is our customer is not picking up the newspaper as much as we would like … We need to make sure we are not spending more to get less.”
She offered several suggestions newspapers could implement:
- Newspapers must maintain and increase circulation and readership among
Macy’s core customers, women 25-to-54. She also said that 30 percent of its
customers are African American, Hispanic or Asian and Macy’s is advertising
in niche media to reach them. “There is a lot you are doing in this area but more must be done,” she
said. - Newspapers could push local, not national and international content, to
the front. “That is your differentiation but that is not what someone sees,” she
said. - Newspapers could collaborate more effectively across regions and with each
other in selling advertising, which would enable national companies like
Macy’s to reach a broader audience. As it is, individual ad buyers for Macy’s
stores deal with individual newspapers on advertising plans. “That’s not productive for either of us,” Ms.
MacDonald said. - From a marketing standpoint, publishers should collaborate with advertisers
on research to better understand the rapidly evolving habits of their customers.
She was also surprised by the lack of targeted marketing done to customers,
especially since newspapers’ high journalistic standards sets the medium
apart.
Although many newspapers are undergoing major online initiatives, “you
need to be much, much more aggressive in leveraging your content online,” Ms.
MacDonald said.
Ms. MacDonald likened the newspaper industry’s problems to department stores, which have undergone significant changes over of last two decades in the face of new competition.
“We can opt to stay the course and complain all the way down…choose short terms fixes like cost cutting…or we can select a different path by aggressively reinventing the business model,” Ms. MacDonald said. “That’s what I assume and hope that all of you are doing.”
Discussion Question: What do you think of some of Anne McDonald’s ideas on how newspapers could a better job for its readers and for retailers? How vital are newspapers as an advertising vehicle for retailers?
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There’s another thing at play here that I will speak to as a loyal Macy’s shopper. They’ve done such a good job with their loyalty program that they have trained me not to look at their newspaper ads, as my post box and email inbox has already informed me on what sales and products are coming up (often with an incentive coupon). That said, however, Anne’s points about how newspapers could evolve to be more attractive to advertisers are sound.
People want information relevant to them and advertisers want to reach their target prospects. TV is in the same predicament, so why are both camps not working harder to utilize technology to edit the information sent out to specific readers/viewers based on their areas of interest? Once this happens, advertisers could be reaching “pre-qualified” prospects and readers/viewers may actually pay attention to their messages!
Macy’s, like every other advertiser, wants value for its money. Local newspapers are largely local monopolies, so their ad prices are high. Most newspapers assume the best technology of 20 years ago: no email, no online marketing, no pay per click, no loyalty programs, etc. Newspapers bought local TV and radio stations to retain local monopoly pricing for advertisers. But there’s no local monopoly for them to buy on the internet. Their own websites aren’t compelling enough to keep the ad dollars in-house. The most effective newspaper strategy: make the reporting compelling. The usual newspaper strategy: reduce spending on reporting. As newspaper product quality deteriorates, the readership losses will accelerate.
Like Ms. McDonald, I am an avid newspaper reader. It pains me to see what is happening to the industry, which she captures so well.
I wish I saw a solution. The question is whether the drop in readership will plateau at some level sustainable to publishers and advertisers, or whether it will continue falling below that level.
We had this crisis in a sense once before, in the late 1970s, when papers failed across the country. Mostly this was from two newspaper towns becoming one newspaper towns. The industry survived that “newspaper depression,” but this is different–and worse.
You have to capture the reader young. If you do, you can hold them. But between television, the internet, and parents not pushing readership (in our case, in part because most of the time there is some story on the front page we’d rather our younger ones not read), this is just not happening.
Then add to that the continuously rising cost of newsprint and delivery, and like all publishers the lure of the web is very high.
I think McDonald’s recommendations are good, but probably not enough…it may take some fundamental change in paradigm. Is the Harry Potter technology for moving pictures in the Daily Wizard anywhere on the horizon?
When I think of Macy’s since Lundgren’s rule, “upscale and a “fashion forward image” don’t come to mind! Bloomingdales I would agree, a great store. Sadly, Macy’s hasn’t been upscale for at least 17 years.
So is Anne McDonald saying that she would like the Chicago Tribune and Sun-Times to push local coverage of the boycott against Macy’s to the front pages with headlines predicting whether this month’s double-digit decline in sales is due to weather that was too cold or weather that was too hot.
Please. Like someone else noted, it’s like GM telling newspapers how to develop a quality product. If it were Nordstrom, Saks or Neiman-Marcus, I’d listen. But a rolling train-wreck like Macy’s…not so much.
The strategy, as painful as it may seem for those of us who are old enough to remember the glory days of Sunday circulars and other retailer ads, is a good one, and one whose time has come. I see in our stores where very few people actually come in with knowledge of our newspaper ads, and a growing number of people who, when they ask about sales, ask things like, “Was that advertised in the paper,” which tells me that they didn’t see the paper or the ad.
More retailers, Macy’s included, even have on-line shopping options for consumers, so it only makes sense to advertise to them through the medium they are using already.
14 posts in, and I’ve yet to see the contrarian viewpoint, so here goes: newspapers will do just fine…once these young’ins grow up and cover their tattoos, they’ll realize (that reading) the printed page offers a fun, convenient and time honored way to while away the afternoon.
Back to reality, though, I would agree with those who have noted the misfortune that the comments came from someone associated with Federated, since the considerable ill-will the company has generated recently tends to overshadow what they (she) might actually say…though what she did say could be safely described as “predictable” rather than “inspired”: a combination of hectoring, obvious observations and pleas for collaboration; with regard to that last point, though there is some logic in the idea, it is definitely a slippery slope…certainly the advertorials and ad-driven “special issues” one often sees do little to inspire confidence.
But whatever happens, it will be between ever bigger players.
Oh, to be young again, and have not just two newspapers in town, but two (or more) department stores as well!
Yes, newspapers need work. And, as stated, so does Macy’s ability to be creatively relevant and innovative to make the print experience more dynamic. A big part of the readership issue has to do with time starvation. There is just not enough hours in a day for us to keep up with the journalistic approach of newspapers…. So, perhaps their are ways to address time starvation. Also, as McDonald noted, the ethnic populations of the U.S. are important to her business. Newspapers still do not cover these populations in a full and positive light. And I’m not just speaking about ethnic pubs, but about including these communities as part of the news editorial when the stories are not about crime, immigration or other controversial or potentially negative imagery.
Why read a newspaper and read about what happened yesterday when you can look at cnn.com and read about what happened 5 minutes ago? Plus, cnn.com or other internet news sources are free as opposed to a local newspaper subscription. Local newspapers should work on setting up their own websites to keep younger readers.
Anne McDonald’s analysis as to why Macy’s is moving ad dollars away from newspapers is reflective of new realities about newspapers, in that for the most part, they have become largely antiquated and pointless for a great amount of today’s consumers. Other than commuters without laptops and internet connectivity, for most people newspapers are inconvenient, dated, and unnecessary. The Sunday paper is a slight exception for now because many consumers still clip coupons from inserts, and weekend papers are still prevalent for sports and movies, especially in markets where weekend papers are tabloids. However, overall the cost for newspaper ads have not declined as has the value of return on investment for newspaper advertising.
In a world where people construct their own media environments (TiVo, iPods, net-based communication vehicles like this one, downloaded essays from Amazon.com, cable television, satellite radio, Second Life, etc., etc.) more and more traditional media sources aren’t much better than direst mail outlets–they may or may not be an effective way of maybe or maybe not building impressions. Since their value is reduced, the price should follow and, as others have noted, that means less quality and fewer readers. It’s a bad death spiral that will be impossible to escape until somebody figures out how to get people to pay for quality media.
Newspapers remain one of the primary sources of sought-after, current content. Most major newspapers have enhanced the delivery of their content through the web in recent years, recognizing the trend toward readers choosing an electronic delivery platform. This impacts the ability of advertisers, particularly department stores to make the same impact that they do with full page and multi-page spreads in the printed version. As a result, it is not surprising that Ms. McDonald is concerned. She knows that getting people to the store is half the battle. With the increasing fragmentation of the mass media, that has become increasingly difficult to do in a cost-effective manner.
As providers of digital signage solutions, we have certainly noted the shift in advertising spending. At the same time, in-store media is merely the last mile. having new vehicles inside the store can help impact the decision making process or the perception of the customer. Ms. McDonald makes pragmatic suggestions, understanding that she still needs to march the first few miles before the store handles the last mile. Advertising will likely remain a zero sum game. There will be continued investment in in-store media, and you should not be surprised to see newspapers and other media players entering the game with content services of one kind or another, in an effort to extend and enhance existing relationships.
I think Ms. MacDonald has some good ideas. I mostly like the idea that some of these competing local newspapers should join forces to make advertising easier on the retailers. They will need to do something significant to keep their advertisers because as David points out, the cost to advertise has not decreased as the value of the ads have.
Unlike Ms. MacDonald, I rarely read the paper anymore. I catch the weekends and read during flights. I spend so much time in my car and in front of the computer, that I tend to get my news on line and via satellite radio. As these trends become more popular, the value of the newspaper ads will continue to decrease. The newspaper companies will need to make some very innovative decisions if they are to survive.
Macy’s has some good suggestions from their perspective but we are really (and have been for some time) in a digital age. I was disappointed not to see more focus on the Internet and other full motion media (like TV, electronic billboards, etc.). This is where young viewers are getting their information, comparison shopping and seeking purchasing decisions. The growth of the Internet is changing the entire world of advertising, purchasing and how we segment and reach our target markets. Understanding this and exploiting its strengths should be every marketer’s goal.
All Ms. McDonald was doing was stating the facts and every comment on RetailWire so far has agreed with her finding. I also think all of us realize that what she has said is true.
Now if this is so, I have another warning for newspapers and some advice to the people who read this column. The employees you are looking to hire in more and more cases are not going to newspapers when they start to look for a job. The first place they go is the Internet, friends, or even just go to the mall and look for “Now Hiring” signs.
The newspapers have realized this to some degree and are more often teaming up with job boards. Maybe they can do the same thing with their advertising to make if more relevant.
So remember, as a retailer, just as you are looking at all sources to attract you target customer, look at all of the sources to attract your target employee.
“If you beat your competition to the best employees, those best employees will help you beat the competition.”
Our findings from a study we did on the newspaper industry several years ago tie directly to Anne MacDonald’s comments:
– Every newspaper we studied (large and small, one-newspaper towns, multiple-newspaper towns) has a number of opportunities in their markets for reaching out to, and capturing, readers.
– Pilot readership tests showed that over a 12-month term, readers could actually be captured by these new initiatives. Readership increases ranged from a LOW of 10% to over 17%.
How could this be? The newspaper industry seems locked in a downward, terminal spiral, where countless industry experts have tried and failed to get readership increases. So how can the numbers I just mentioned be true? This is explained by our key finding:
Newspapers are unable to process the information concerning these opportunities because their Master Systems block and distort this information. We measured this numerous times during executive meetings and industry councils and conventions. The root problem isn’t the mismatch between newspapers and the market for news and how it wants that news delivered; the root problem is that newspaper organizations are unable to process the core information about their markets.
We have observed many instances of skepticism from industry insiders concerning the data in the study I mentioned, which is another facet of this information misprocessing problem.
I used to love newspapers. One of my lifelong dreams has been to eventually spend my retirement in a beach community, starting each day (in my robe and slippers) with several morning newspapers and a mimosa. It is starting to look like the newspaper part, at least, may be a pipe dream by the time I retire. Seriously, here are my thoughts related to Anne McDonald’s comments:
Newspapers really are in trouble. Having laid off, or limited, so many of their good reporters they rely very heavily on AP, Reuters, and press releases for stories to the degree that the same identical words can be found in papers coast to coast and on various news sites on the internet. The loss of multiple perspectives, personalities, angles and and local connections on actual news stories both foreign and domestic, is what we miss most. Papers have replaced lost reportage with multiple columnists’ syndicated combative and pontificating “opinion pieces” which are usually not worth reading. The lack of NEWS is why so many people no longer bother buying and reading the paper. We want to learn something new and useful.
Macy’s, it seems to me, lately suffers from much the same tendency to “sameness” and redundancy as newspapers, so I found McDonald’s comments scolding the press to be kind of ironic if not haughty. The past week’s Macy’s ads leading up to Mother’s Day in my local paper consisted of: perfumes (that are sold and were advertised by several other stores in town), specific branded summer shoe styles (that were also being pictured and advertised by several other stores), nationally branded lingerie (also advertised by other stores), plus a reminder ad to store your fur at Macy’s. (If you bought it there then wouldn’t a postcard or email work better?)
In fairness, there were a few cute ads positioning Macy’s in-house clothing brands (for obviously VERY young Moms). But in general, I wondered why Macy’s even bothered if they were not going to spend their ad dollars differentiating their store as a unique shopping experience where you could find something special for your Mom that was not available everywhere in town.
Interesting comments from Macy’s, but to me this is like taking advice from General Motors on how to sell more cars. There is nothing in a Macy’s ad that drives one to the store other than to save money. Nothing new. Nothing different. Nothing leverages their true “department store” advantage. Just discounted clothes that look like a half-dozen other mid-market competitors.
The Seattle Post-Intelligencer reported that during Microsoft’s Strategic Account Summit, Bill Gates predicted that reading will ultimately happen “completely online.” Gates was quoted as saying, “The number of people who actually buy, subscribe to the newspaper and read it has started an inexorable decline. People have found some combination of TV and the Internet as the way that they can get their news, even the local news that historically was only available in that print form.”
There is no question a paradigm change in deliverables is underway, shifting from the current state of print and online to an online only format. This raises the question about the future of weekly and monthly B2B and B2C magazines as well. Most news is dated when the consumer receives the print version. Newspapers have an elemental problem: the inability to attract the young readers to their print format. For younger readers, the print format seems archaic and awkward.
For newspapers, the market for print will still exist in three to five years and beyond; however, on a much smaller scale. Advertisers will only be willing to support it for a fraction of today’s cost. The change could involve newspapers shifting from daily print distribution to weekend only, and eventually shifting to a strictly online format. It’s hard to witness the sharp decline in print, but take the emotion out of it and ask yourself: where do you get the majority of your news? The instant poll is indicating nobody is thinking retailers’ advertising in newspapers will increase in the next three to five years.
She is right on with her comments that the daily newspaper industry is still stuck in a time warp. For too many years, the newspaper industry enjoyed high profit margins and an “ego-centered” place in our society. Today, they find their cheese has been moved; to quote a famous book. Newspapers deliver a product that is no longer timely and in a size few people can get through or find important to their lifestyle.
The only way for newspapers to survive is to accept the fact they are an aggregator and distributor of information and they are not in the business of printing and delivering a daily paper. If newspapers can embrace targeting their product – and using the web as a delivery vehicle equal to their printed copy – then they may be able to survive. If they do not, we will see the the daily newspaper become at best a niche product reaching a very low percentage of homes.
Anne McDonald is spot on. I have seen little or no effect on our print advertising dollar. It has gotten worse over the last ten years. Declining circulation and rising advertising rates don’t help, either.
Small businesses have a harder time marketing themselves. They pay more for advertising and get much less. But we do see and feel the impact, good or bad, quickly and can adjust accordingly.
For the most part, we have given up on newspaper advertising. It now amounts to less than 5% of our budget. After seeing Ms. McDonald’s comments, I’m sure that will be reduced further. The internet and focusing on word of mouth is the advertising that works best for us.
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There’s another thing at play here that I will speak to as a loyal Macy’s shopper. They’ve done such a good job with their loyalty program that they have trained me not to look at their newspaper ads, as my post box and email inbox has already informed me on what sales and products are coming up (often with an incentive coupon). That said, however, Anne’s points about how newspapers could evolve to be more attractive to advertisers are sound.
People want information relevant to them and advertisers want to reach their target prospects. TV is in the same predicament, so why are both camps not working harder to utilize technology to edit the information sent out to specific readers/viewers based on their areas of interest? Once this happens, advertisers could be reaching “pre-qualified” prospects and readers/viewers may actually pay attention to their messages!
Macy’s, like every other advertiser, wants value for its money. Local newspapers are largely local monopolies, so their ad prices are high. Most newspapers assume the best technology of 20 years ago: no email, no online marketing, no pay per click, no loyalty programs, etc. Newspapers bought local TV and radio stations to retain local monopoly pricing for advertisers. But there’s no local monopoly for them to buy on the internet. Their own websites aren’t compelling enough to keep the ad dollars in-house. The most effective newspaper strategy: make the reporting compelling. The usual newspaper strategy: reduce spending on reporting. As newspaper product quality deteriorates, the readership losses will accelerate.
Like Ms. McDonald, I am an avid newspaper reader. It pains me to see what is happening to the industry, which she captures so well.
I wish I saw a solution. The question is whether the drop in readership will plateau at some level sustainable to publishers and advertisers, or whether it will continue falling below that level.
We had this crisis in a sense once before, in the late 1970s, when papers failed across the country. Mostly this was from two newspaper towns becoming one newspaper towns. The industry survived that “newspaper depression,” but this is different–and worse.
You have to capture the reader young. If you do, you can hold them. But between television, the internet, and parents not pushing readership (in our case, in part because most of the time there is some story on the front page we’d rather our younger ones not read), this is just not happening.
Then add to that the continuously rising cost of newsprint and delivery, and like all publishers the lure of the web is very high.
I think McDonald’s recommendations are good, but probably not enough…it may take some fundamental change in paradigm. Is the Harry Potter technology for moving pictures in the Daily Wizard anywhere on the horizon?
When I think of Macy’s since Lundgren’s rule, “upscale and a “fashion forward image” don’t come to mind! Bloomingdales I would agree, a great store. Sadly, Macy’s hasn’t been upscale for at least 17 years.
So is Anne McDonald saying that she would like the Chicago Tribune and Sun-Times to push local coverage of the boycott against Macy’s to the front pages with headlines predicting whether this month’s double-digit decline in sales is due to weather that was too cold or weather that was too hot.
Please. Like someone else noted, it’s like GM telling newspapers how to develop a quality product. If it were Nordstrom, Saks or Neiman-Marcus, I’d listen. But a rolling train-wreck like Macy’s…not so much.
The strategy, as painful as it may seem for those of us who are old enough to remember the glory days of Sunday circulars and other retailer ads, is a good one, and one whose time has come. I see in our stores where very few people actually come in with knowledge of our newspaper ads, and a growing number of people who, when they ask about sales, ask things like, “Was that advertised in the paper,” which tells me that they didn’t see the paper or the ad.
More retailers, Macy’s included, even have on-line shopping options for consumers, so it only makes sense to advertise to them through the medium they are using already.
14 posts in, and I’ve yet to see the contrarian viewpoint, so here goes: newspapers will do just fine…once these young’ins grow up and cover their tattoos, they’ll realize (that reading) the printed page offers a fun, convenient and time honored way to while away the afternoon.
Back to reality, though, I would agree with those who have noted the misfortune that the comments came from someone associated with Federated, since the considerable ill-will the company has generated recently tends to overshadow what they (she) might actually say…though what she did say could be safely described as “predictable” rather than “inspired”: a combination of hectoring, obvious observations and pleas for collaboration; with regard to that last point, though there is some logic in the idea, it is definitely a slippery slope…certainly the advertorials and ad-driven “special issues” one often sees do little to inspire confidence.
But whatever happens, it will be between ever bigger players.
Oh, to be young again, and have not just two newspapers in town, but two (or more) department stores as well!
Yes, newspapers need work. And, as stated, so does Macy’s ability to be creatively relevant and innovative to make the print experience more dynamic. A big part of the readership issue has to do with time starvation. There is just not enough hours in a day for us to keep up with the journalistic approach of newspapers…. So, perhaps their are ways to address time starvation. Also, as McDonald noted, the ethnic populations of the U.S. are important to her business. Newspapers still do not cover these populations in a full and positive light. And I’m not just speaking about ethnic pubs, but about including these communities as part of the news editorial when the stories are not about crime, immigration or other controversial or potentially negative imagery.
Why read a newspaper and read about what happened yesterday when you can look at cnn.com and read about what happened 5 minutes ago? Plus, cnn.com or other internet news sources are free as opposed to a local newspaper subscription. Local newspapers should work on setting up their own websites to keep younger readers.
Anne McDonald’s analysis as to why Macy’s is moving ad dollars away from newspapers is reflective of new realities about newspapers, in that for the most part, they have become largely antiquated and pointless for a great amount of today’s consumers. Other than commuters without laptops and internet connectivity, for most people newspapers are inconvenient, dated, and unnecessary. The Sunday paper is a slight exception for now because many consumers still clip coupons from inserts, and weekend papers are still prevalent for sports and movies, especially in markets where weekend papers are tabloids. However, overall the cost for newspaper ads have not declined as has the value of return on investment for newspaper advertising.
In a world where people construct their own media environments (TiVo, iPods, net-based communication vehicles like this one, downloaded essays from Amazon.com, cable television, satellite radio, Second Life, etc., etc.) more and more traditional media sources aren’t much better than direst mail outlets–they may or may not be an effective way of maybe or maybe not building impressions. Since their value is reduced, the price should follow and, as others have noted, that means less quality and fewer readers. It’s a bad death spiral that will be impossible to escape until somebody figures out how to get people to pay for quality media.
Newspapers remain one of the primary sources of sought-after, current content. Most major newspapers have enhanced the delivery of their content through the web in recent years, recognizing the trend toward readers choosing an electronic delivery platform. This impacts the ability of advertisers, particularly department stores to make the same impact that they do with full page and multi-page spreads in the printed version. As a result, it is not surprising that Ms. McDonald is concerned. She knows that getting people to the store is half the battle. With the increasing fragmentation of the mass media, that has become increasingly difficult to do in a cost-effective manner.
As providers of digital signage solutions, we have certainly noted the shift in advertising spending. At the same time, in-store media is merely the last mile. having new vehicles inside the store can help impact the decision making process or the perception of the customer. Ms. McDonald makes pragmatic suggestions, understanding that she still needs to march the first few miles before the store handles the last mile. Advertising will likely remain a zero sum game. There will be continued investment in in-store media, and you should not be surprised to see newspapers and other media players entering the game with content services of one kind or another, in an effort to extend and enhance existing relationships.
I think Ms. MacDonald has some good ideas. I mostly like the idea that some of these competing local newspapers should join forces to make advertising easier on the retailers. They will need to do something significant to keep their advertisers because as David points out, the cost to advertise has not decreased as the value of the ads have.
Unlike Ms. MacDonald, I rarely read the paper anymore. I catch the weekends and read during flights. I spend so much time in my car and in front of the computer, that I tend to get my news on line and via satellite radio. As these trends become more popular, the value of the newspaper ads will continue to decrease. The newspaper companies will need to make some very innovative decisions if they are to survive.
Macy’s has some good suggestions from their perspective but we are really (and have been for some time) in a digital age. I was disappointed not to see more focus on the Internet and other full motion media (like TV, electronic billboards, etc.). This is where young viewers are getting their information, comparison shopping and seeking purchasing decisions. The growth of the Internet is changing the entire world of advertising, purchasing and how we segment and reach our target markets. Understanding this and exploiting its strengths should be every marketer’s goal.
All Ms. McDonald was doing was stating the facts and every comment on RetailWire so far has agreed with her finding. I also think all of us realize that what she has said is true.
Now if this is so, I have another warning for newspapers and some advice to the people who read this column. The employees you are looking to hire in more and more cases are not going to newspapers when they start to look for a job. The first place they go is the Internet, friends, or even just go to the mall and look for “Now Hiring” signs.
The newspapers have realized this to some degree and are more often teaming up with job boards. Maybe they can do the same thing with their advertising to make if more relevant.
So remember, as a retailer, just as you are looking at all sources to attract you target customer, look at all of the sources to attract your target employee.
“If you beat your competition to the best employees, those best employees will help you beat the competition.”
Our findings from a study we did on the newspaper industry several years ago tie directly to Anne MacDonald’s comments:
– Every newspaper we studied (large and small, one-newspaper towns, multiple-newspaper towns) has a number of opportunities in their markets for reaching out to, and capturing, readers.
– Pilot readership tests showed that over a 12-month term, readers could actually be captured by these new initiatives. Readership increases ranged from a LOW of 10% to over 17%.
How could this be? The newspaper industry seems locked in a downward, terminal spiral, where countless industry experts have tried and failed to get readership increases. So how can the numbers I just mentioned be true? This is explained by our key finding:
Newspapers are unable to process the information concerning these opportunities because their Master Systems block and distort this information. We measured this numerous times during executive meetings and industry councils and conventions. The root problem isn’t the mismatch between newspapers and the market for news and how it wants that news delivered; the root problem is that newspaper organizations are unable to process the core information about their markets.
We have observed many instances of skepticism from industry insiders concerning the data in the study I mentioned, which is another facet of this information misprocessing problem.
I used to love newspapers. One of my lifelong dreams has been to eventually spend my retirement in a beach community, starting each day (in my robe and slippers) with several morning newspapers and a mimosa. It is starting to look like the newspaper part, at least, may be a pipe dream by the time I retire. Seriously, here are my thoughts related to Anne McDonald’s comments:
Newspapers really are in trouble. Having laid off, or limited, so many of their good reporters they rely very heavily on AP, Reuters, and press releases for stories to the degree that the same identical words can be found in papers coast to coast and on various news sites on the internet. The loss of multiple perspectives, personalities, angles and and local connections on actual news stories both foreign and domestic, is what we miss most. Papers have replaced lost reportage with multiple columnists’ syndicated combative and pontificating “opinion pieces” which are usually not worth reading. The lack of NEWS is why so many people no longer bother buying and reading the paper. We want to learn something new and useful.
Macy’s, it seems to me, lately suffers from much the same tendency to “sameness” and redundancy as newspapers, so I found McDonald’s comments scolding the press to be kind of ironic if not haughty. The past week’s Macy’s ads leading up to Mother’s Day in my local paper consisted of: perfumes (that are sold and were advertised by several other stores in town), specific branded summer shoe styles (that were also being pictured and advertised by several other stores), nationally branded lingerie (also advertised by other stores), plus a reminder ad to store your fur at Macy’s. (If you bought it there then wouldn’t a postcard or email work better?)
In fairness, there were a few cute ads positioning Macy’s in-house clothing brands (for obviously VERY young Moms). But in general, I wondered why Macy’s even bothered if they were not going to spend their ad dollars differentiating their store as a unique shopping experience where you could find something special for your Mom that was not available everywhere in town.
Interesting comments from Macy’s, but to me this is like taking advice from General Motors on how to sell more cars. There is nothing in a Macy’s ad that drives one to the store other than to save money. Nothing new. Nothing different. Nothing leverages their true “department store” advantage. Just discounted clothes that look like a half-dozen other mid-market competitors.
The Seattle Post-Intelligencer reported that during Microsoft’s Strategic Account Summit, Bill Gates predicted that reading will ultimately happen “completely online.” Gates was quoted as saying, “The number of people who actually buy, subscribe to the newspaper and read it has started an inexorable decline. People have found some combination of TV and the Internet as the way that they can get their news, even the local news that historically was only available in that print form.”
There is no question a paradigm change in deliverables is underway, shifting from the current state of print and online to an online only format. This raises the question about the future of weekly and monthly B2B and B2C magazines as well. Most news is dated when the consumer receives the print version. Newspapers have an elemental problem: the inability to attract the young readers to their print format. For younger readers, the print format seems archaic and awkward.
For newspapers, the market for print will still exist in three to five years and beyond; however, on a much smaller scale. Advertisers will only be willing to support it for a fraction of today’s cost. The change could involve newspapers shifting from daily print distribution to weekend only, and eventually shifting to a strictly online format. It’s hard to witness the sharp decline in print, but take the emotion out of it and ask yourself: where do you get the majority of your news? The instant poll is indicating nobody is thinking retailers’ advertising in newspapers will increase in the next three to five years.
She is right on with her comments that the daily newspaper industry is still stuck in a time warp. For too many years, the newspaper industry enjoyed high profit margins and an “ego-centered” place in our society. Today, they find their cheese has been moved; to quote a famous book. Newspapers deliver a product that is no longer timely and in a size few people can get through or find important to their lifestyle.
The only way for newspapers to survive is to accept the fact they are an aggregator and distributor of information and they are not in the business of printing and delivering a daily paper. If newspapers can embrace targeting their product – and using the web as a delivery vehicle equal to their printed copy – then they may be able to survive. If they do not, we will see the the daily newspaper become at best a niche product reaching a very low percentage of homes.
Anne McDonald is spot on. I have seen little or no effect on our print advertising dollar. It has gotten worse over the last ten years. Declining circulation and rising advertising rates don’t help, either.
Small businesses have a harder time marketing themselves. They pay more for advertising and get much less. But we do see and feel the impact, good or bad, quickly and can adjust accordingly.
For the most part, we have given up on newspaper advertising. It now amounts to less than 5% of our budget. After seeing Ms. McDonald’s comments, I’m sure that will be reduced further. The internet and focusing on word of mouth is the advertising that works best for us.