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Tuesday, April 26, 2005

The Newspaper Tipping Point? 

Advertising: Newspapers Find National Ads a Tough Sell

All politics is local, said Tip O'Neill's father. And all advertising is local (or individual-- intended to convince individuals to take some action).

The article linked above from the New York Times, on the increasing tough sell of national advertising in newspapers, will probably be used by some to continue the tolling of the death knell for old media. But read it carefully.

My takeaways: national advertising is harder to sell for newspapers with national aspirations and circulations (excepting USA Today). But smaller papers are seeing increases in advertising. And of course, the online portals, which draw much of their content from newspapers, are growing like weeds.

Grab: "The smaller papers are doing better than the larger papers, and local retail and classified outperformed national," said Lauren Rich Fine, an analyst with Merrill Lynch, which does business with Dow Jones and the Tribune Company.


"National advertising is financial, technology, professional services advertising," said Richard F. Zannino, executive vice president and chief operating officer at Dow Jones. "That advertising tends to follow the profits of the companies doing the advertising."

"Local advertising is just much less volatile than national advertising because of its mix," Mr. Zannino said. "If you're a local auto dealer and you have inventory to sell, you have to advertise to get people into your store to buy the cars. They tend to be much less cyclical."

If you tie this together with my recent posts here and here on newspaper websites dominating their local markets, I think you have the makings of the new economic model of newspapers, and other "old [read 'print'] media."

The return of newspapers to their local roots may be the real tipping point (with a tip of the hat to Tip's dad) for this particular medium.

Update: I didn't blog Murdoch's ASNE speech, but here's a relevant grab:

"Plainly, the Internet allows us to be more granular in our advertising, targeting potential consumers based on where they've surfed and what products they've bought," Murdoch said. "The ability to more precisely target customers using technology-powered forms of advertising—contextual-based targeting and behavioral targeting—represent a great opportunity for us to maintain and even grow market share and are clearly the future of advertising."


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