The Branded Pantry

A study released from ScarboroughResearch put a positive spin on the declining fortunes of newspapers as an effective communication vehicle.  Their point was that “Sunday Newspapers (are) Still Best Source For Coupons”  according to the article in Editor & Publisher.    53% of households get their coupons from the Sunday Paper vs.: 35% from direct mail, 33% at the store, 17% from weekday papers, 22% from loyalty programs, 15% from magazines and only 11% from online.   27% of households clip or gather coupons once a week or more.   

 A second study released by Hitwise indicated that visits to Internet coupon sites increased 56% year over year. 

Thus the dilemma of the traditional media.  They are experiencing accelerating declines in traditional vehicle readership and advertising revenue (Gannett just announced a 14% decline in ad revenues for this last quarter vs. year ago.)  Whilst they scramble for effective online strategies (Gannet’s online ad revenue was up 17%) the largest chunk of their revenuesand  profits comes from the traditional print ad components. 

Unfortunately the nature of the cost structure of the traditional print business is fairly fixed which means that any attempts to cut costs immediately affect the quality of their product, leading to further declines in readership.   The hoped for growth in online revenues is obviously occurring, but the base is too small to make up the profit shortfalls experienced elsewhere ..and may not develop in time for these companies to survive.  

The papers are increasingly banding together among themselves and with non traditional advertising vehicles networks such as Yahoo.   Even with this approach job cuts, format changes, editorial changes and other desperate moves will continue. 

What might they turn to for salvation?  IF they have the resources to play, they may want to start to acquire and roll together online marketing and commerce properties in the Fast Moving Consumer Goods, Automotive, Real Estate and Career arenas.  These are the areas which traditionally supplied the bulk of the revenue for Newspapers (and don’t forget broadcast) and represent the source of most advertising defectors today.  Why?  Because the consumer can get the news they want in these arenas more easily on their extended net.   

Some acquisition efforts have been made in these areas but usually the acquired are web 1.0 single tailed applications and not the multi-function, personalized and ultra convenient applications that have focused on meeting specific consumer needs.