Newspapers Cope with Lower Print Ad Revenue

You're reading this on a screen, so you won't be surprised to learn that newspaper ad revenues (from classified ads and display ads) are going down, down, down.

According to the Newspaper Association of America, total newspaper ad revenues now stand at half of the 2005 level. In other words, where the industry used to take in $49.4 billion in ad revenues, it now takes in $23.9 billion.

Forecasts are notoriously tricky, but the American Journalism Review published a piece in 2008 that discussed the possibility of industrywide print ad revenues falling to $25.9 billion by 2012 and plummeting further to $11.9 billion by 2020, by which time online newspaper ad revenues would hit $11 billion. If the dramatic drop in print ad revenues continues as it has in recent years, the actual number will be far, far below $10 billion by 2020.

Exactly how much U.S. newspapers currently earn from online ad revenues is unclear, but one study found U.S. newspapers to be losing $10 in print ad revenue for every $1 in online ad revenue they gained. This isn't just a U.S. phenomenon: U.K. newspapers are also losing print revenue and testing different ways to attract ad revenue online.

In Canada, Postmedia Network is dropping Sunday editions for three of its newspapers. The explanation: “Well, we’re really not making any money at all in those markets [on those days],” said chief executive officer Paul Godfrey. “So we’ve decided to keep everything online there and do away with print copies to reduce legacy costs.”

A few U.S. newspapers, including the Times-Picayune of New Orleans, are also cutting expenses by reducing their print schedule. Effective this fall, the Times-Picayune will publish on Wednesdays, Fridays, and Sundays, the days when it has the highest demand for ad space. The paper will continue to post news and features even on days when it doesn't print a paper. (New Orleans readers are unhappy about losing their daily printed paper, and protests include a Facebook page with lots of negative comments.)

Will newspaper readers accept only three-day subscriptions? Will they adopt the habit of reading online when no printed paper is delivered? What will these changes mean for the efficacy of newspaper ads? And will online ad revenues grow fast enough to keep newspapers alive in some form?

Will You "Friend" New FB Privacy Policy?

Consumer Reports says too many of Facebook's 900 million users don't understand or use the privacy controls. This is important because Facebook's $3.7 billion business is mostly dependent on the sale of ads targeting users based on what they've told FB (including birth date, gender, work history, education, relationships, and "likes").

FB can track users on any web page where a FB "like" button is located. It will soon serve up ads relevant to user profiles and interactions when users visit non-FB sites. Apparently, it has been tracking FB users even after they log out. And a great many FB users simply don't trust FB.

If consumers resist ads on TV, at the movies, at the beginning of DVDs, and in so many other places, do they want ads appearing next to FB updates of friends and Instagram photos of cousins or kids? Questions are already being raised about the efficacy of FB ads for some categories (GM recently decided against continuing its FB ads for cars). But social media is still expanding, and marketers are experimenting to see what works for their products and audiences.

The next question is, how will users react when FB asks them to vote on a new privacy policy? Will they give it a thumbs up or vote it down?

Apps Gaining Ground

Nielsen reports that U.S. consumers are downloading more apps than ever before and using them for more minutes per day. Half of the country now owns a smartphone . . . and on that smartphone, they have an average of 41 apps this year, compared with 32 apps last year. Nielsen's study names these as the top five apps: Facebook, YouTube, Google Play (entertainment app), Google Search, and Gmail.

TechCrunch points out that Apple has more than 25 billion app downloads at this point, and Google apps reached the 15 billion download mark this month.

Meanwhile, with Facebook at the top of the app list, its upcoming IPO has sparked much discussion about how the social media giant can wring revenues from its popularity. Some industry observers see FB earning millions of dollars from mobile marketing in the near future. Other news reports question whether FB can leverage its app dominance for profitability. First, let's see how the IPO does on day 1 and then on day 2.

Stamp Out Hunger Today

Today is the U.S. Postal Service's annual Stamp Out Hunger food drive. Earlier in the week, a postcard in my mailbox alerted me that the drive would take place today, and well-timed local publicity featuring community postal officials and carriers added a neighborhood element to the campaign. My bag of nonperishable food cans and packages is already in front of the mailbox, awaiting pickup.

 

As of this moment, the campaign's Facebook page has more than 78,000 "likes" and it's using Twitter to spread the word, as well, with #StopDropDonate as the hashtag. A Google search turns up 1.5 million hits for this year's food drive and more than 1 million images. 

I hope the drive collects a record amount of food this year!

Bad News Travels Fast--So Be Good

News about bad customer experiences travels faster and farther on social media than ever before. A new American Express survey shows that people who use social media will tell 53 people about a bad customer service experience but tell only 42 people about good customer service.

The top four complaints about customer service: (1) rudeness, (2) being passed from department to department without resolving the issue, (3) having to wait too long for resolution, and (4) forcing consumers to repeatedly follow up to get a problem resolved.

This global survey revealed the increasing use of social media worldwide for customer service. In India, for instance, more than half of the respondents have tried social media to get attention for a service problem.

Take a cue from Zappos, which has a dedicated Twitter customer-service account, and more than 12,000 followers (and following). When problems crop up, as they do, Zappos uses every communication tool to inform and reassure customers. After Zappos was hacked and millions of customer names were exposed, the company first alerted employees to the problem and then publicly posted reports about what had happened and what the company was doing to fix things fast.

The bottom line for company bottom lines: Do your best on customer service and when problems arise, get them resolved as quickly and politely as possible.

Segmenting "Connected Customers"

IBM recently presented the results of its worldwide "digital" segmentation study, grouping "Connected Customers" not by consumer demographics (such as age or income) but according to how, why, and how often these individuals use the Internet/mobile devices/etc. Its study identified four distinct segments:

• Efficiency Experts (41% of Connected Customers) use digital technology to get things done--sending e-mails instead of snail mail, for instance, or shopping online simply because it's quick and easy.
• Content Maestros (35%) are heavy users of apps and digital devices for accessing content, content, content.
• Social Butterflies (15%) see digital tech as a way to stay in constant touch with friends and family, from anywhere at any time.
• Content Kings (9%) focus on accessing online entertainment and games via digital devices--and, yes, this segment is primarily male.

What does this mean for marketing planning? IBM understands that behavioral segmentation can offer extremely useful insights about what customers want and how to reach customers in a meaningful way. As one example, Content Kings might be more responsive to marketing promos presented in a game-like format, whereas Efficiency Experts might prefer a summary e-mail about upcoming discounts or product intros.

Do you know how connected your customers are, and how they use digital tech?

Naming the Next Gen

Baby Boomers are the most identifiable generational segment in America, covering the 78 million people born from 1946 to 1964. Gen X is defined as the 46 million people born from 1965 to 1980. The Millennials are the 76 million Americans born from 1981 to 2000 (according to Pew) or 1982 to 2004, according to Neil Howe. Gen Y? Roughly overlaps with the Millennials.

But what will the next generation segment be called? Jean Twenge has been calling the next gen iGen for the past six years. She also suggests Multi-Gen as a segment name for this generation that follows the Millennials.

We like to nickname generations because, like a brand, it instantly identifies the segment in a broad way. When marketers think about "Baby Boomers," they envision people who were teenagers in the 1960s and who are now in or approaching their retirement years. Millennials are in their teens, "born digital."

These generational descriptions are shorthand for some of the common characteristics of each segment. Of course, only by digging beneath the surface can companies really understand what motivates and energizes their targeted segments within each generation.

What's Next for Kodak?

This decal still appears in the window of the New England Air Museum (adjacent to Bradley Airport in Connecticut). Kodak decals on windows and doors were once a powerful marketing element, alerting vacationers that they could pick up an extra roll or two of film while visiting a museum, zoo, park, or other travel destination. Even without the decal, visitors couldn't help noticing the familiar pyramid of yellow Kodak boxes behind the cash register.

Now Kodak is trying to emerge from bankruptcy, a different company in a different imaging era. Kodak's name has been removed from the Los Angeles theater where the Academy Awards are held every year, after the company was allowed out of a 20-year naming rights deal. First-quarter 2012 sales were down, and the company continues to be unprofitable. And the company is selling off some pieces, such as its Kodak Gallery photo storage/management site (sold to Shutterfly).

As management guru John Kotter points out in a recent Forbes piece, Kodak's enormous and long-lived success was one big reason why management failed to respond quickly to the changing business environment, even before the digital challenge. When your product is ubiquitous and your decals are visible in tourist attractions all over the country--and beyond--it's not easy to foresee a film-free future, let alone position your company for major technological upheaval.

Kodak was late to the digital party, and its ability to find a meaningful competitive edge is all that can save the company. What will Kodak do next?

The Scream

Today the renowned auction house Sotheby's auctioned this 1895 pastel, The Scream, by Edvard Munch. Sold for $120 million, The Scream is one of the world's most recognized artworks, an iconic image used in countless parodies, products, and communications. Reporters have been talking about this auction for days, which will only help rivet eyes on the competitiveness of the bids.

Sculpture at "Grounds for Sculpture," New Jersey

A Google search for images returns 135 million hits, including photos of the paintings themselves and many drawings or reproductions of the central image adapted for satirical or commercial use. On the first page of images I found Homer Simpson doing the scream, and Macaulay Culkin doing the scream in Home Alone. Strolling through Grounds for Sculpture, a sculpture garden in New Jersey, I passed the above "Scream" sculpture.

Quite a lot of publicity about this auction and iconic picture!