Where are Newspapers Now?

Newspaper ad revenues continue in the doldrums.John Barlow of Barlow Research Associates, Inc. reminds me that it’s been awhile since I blogged about the dire straits of America’s newspaper industry. The twin whammies of a major economic recession along with the rapidly changing ways Americans are getting their news have hammered advertising revenues and profits, leading to organizational restructuring, bankruptcies, and more.

But with the recession bottoming out (hopefully?), there was hope that the decline in newspaper ad revenues might be arrested as well.

Well, the latest industry survey doesn’t provide much cause for celebration. A poll of ~2,700 small and mid-size businesses conducted this summer by Portland, OR-based market research firm ITZBelden and the American Press Institute finds that ~23% of these businesses plan to cut back on newspaper advertising this year.

The kicker is that these revenues are being spent, but they’re being put to use in other advertising media.

The ITZBelden survey found that a similar ~23% of companies plan to up their 2010 digital ad spending anywhere from 10% to 30%. This compares to only about 10% planning to increase their print advertising by similar proportions.

Moreover, the survey findings reveal that small and mid-size U.S. businesses have moved into digital marketing in a significant way. Not only do more than 80% of them maintain web sites, they’re active in other areas, including:

 ~45% maintain a Facebook or MySpace page
 ~23% are engaged in online couponing
 ~13% are involved with Craigslist
 ~10% are listed on Yelp! or similar user-review sites

One area which is still just a relative blip on the screen is mobile advertising, in that fewer than 4% of the respondents reported activities in that advertising category.

Where are these advertisers planning to put their promotional funds going forward? While newspapers should continue to represent around one quarter of the expenditures, various digital media expenditures will account for ~13% of the activity, making this more important than direct mail, TV and Yellow Pages advertising.

There was one bright spot for newspapers in the survey, however. Respondents expressed a mixture of confusion and bewilderment about the constantly evolving array of digital marketing communications options opening up … and they’re looking for support from media experts to guide their plans and activities.

And where do they see this expert advice coming from? Newspaper ad reps.

Perhaps the Yellow Book’s “Beyond Yellow” small business advertising campaign – you know, the one that touts not only the Yellow Pages advertising but also web development, online advertising, search marketing and mobile advertising – is onto something.

Newspaper publishers and online news consumers: Still miles apart on paid content.

How can the views and perspectives of newspaper publishers and readers be so out of kilter? It might have something to do with “wishful thinking” on the part of the publishers.

Case in point: American Press Institute has just released the results of a field research study that compares the opinions of readers and publishers on paying for news content.

Naturally, this issue is of paramount concern to newspapers that are trying to create a new business model that is profitable. In fact, nearly 60% of the publisher respondents in the survey reported that they’re considering requiring paid access for online news — news that is currently provided to readers free of charge. At the same time, these respondents seem to believe that consumers will willingly “pay to play” in a new paid-content environment.

But I wonder about that.

Here’s an example of the disconnect between newspaper publishers and news consumers found in the survey: More than two-thirds of the publishers believe it will be “not very easy” or “not easy at all” for consumers to find similar news content online from alternative free sources once the shift to paid content happens. Do consumers agree? Well … only ~43% think the same way.

And where do newspaper publishers think people will go for news if their paper’s free online information is no longer available to them? Again, we see a big disparity in the results. The top three sources publishers think consumers will turn to are:

 The publisher’s own print newspaper: 75%
 Other local media: 55%
 Television: 53%

For consumers, those alternate sources all rated lower – in two cases, dramatically so:

 The publisher’s own print newspaper: 30%
 Other local media: 17%
 Television: 45%

[For the record, the alternative free news source identified by the most consumers was “other local web sites,” cited by 68% of respondents.]

With such dramatically different views held by newspaper publishers and their consumers, it’s clear that both sides can’t be correct. I’ll to bet that the consumers’ responses are closer to the reality.

For this reason, it would be advisable for publishers to tread very carefully as they attempt a shift to a paid content business model. Does the term “evaporating audiences” mean anything to them?