26
Sep
08

What’s the plan?

Newspapers are in the midst of the greatest retrenchment in their modern history. Almost weekly there are reports of a few hundred more jobs being cut or eliminated. According to the Paper Cuts web site, created to track the loss of jobs at US newspapers, there have been nearly 11,000 jobs lost this year and there are still three months to go. That’s up from about 2,200 in all of last year.

It isn’t like this hasn’t happened before. In the late 80s and early 90s I worked at a mid-sized daily in the Philadelphia area. There I survived three rounds of layoffs. In one I saw a photographer with 12 years at the paper ushered out the door because he had the least seniority in that department.

But the difference in the past was that the newspapers didn’t really need a plan. They cut back and rode it out, confident that the economic factors affecting their bottom line would eventually be reversed and all would return to business as usual. That doesn’t seem likely this time.

The newspaper industry is in the midst of the longest and most severe advertising revenue downturn in US history. And rather than finding a floor, indicators are that everything up to now has just been the beginning of a deepening decline.

Here is what Alan Mutter at Newsosaur had to say on the subject:

In the longest sales setback ever, advertising revenues at newspapers declined for 9 or 10 consecutive quarters in the period ended on June 30, 2008. This surpasses the downturns in 1990-91 and 2001-02, when sales in each case slid for six of eight consecutive quarters before they revived.If sagging newspaper sales don’t turn around in the second half of this year – which few expect they can do – then the decline will be on track to be twice as long as any in history.

What will make matters worse? More major retailers are expected to go bankrupt and the credit crunch will discourage others from spending cash on hand for newspaper ads. But what may be most telling is that advertisers are losing confidence in newspapers.

As evidence Mutter cites a report to the NAA Retail Advertising Forum that just concluded in Dallas, TX.

While most of the retailers appearing at the NAA conference continued to profess their appreciation for newspaper advertising, David T. Clark of Deutsche Bank said in the report that nearly all of them are moving ever-greater percentages of their advertising budgets to the interactive media – especially when young people are the targets.Marketers “are ‘flummoxed’ by the multitude of media choices they have right now, so there is an opportunity for newspapers to step in and offer a multi-platform ‘big idea’ to major retail advertisers,” says Clark. “However, it is unclear whether many newspapers are up to the challenge, though there appear to be some that are.”

And newspapers may have a limited window in which to prove they deserve continued advertiser support. According to Clark.

“The next year to 18 months may be ‘make or break’ for the newspapers,” he said in the report. All signs point to weak retail sales and lean advertising budgets for the balance of this year and much of next, [making] it “unclear” whether newspapers “are moving fast enough to secure local market share for when the economy climbs out of its hole.”

What’s your newspaper doing? Do it have a plan to stop the slide or climb out of the hole? Or is it just cutting jobs and hoping things will all turn around on their own?

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