Threats Mount to Newspaper Ad Strongholds
Just about everyone is pecking away these days at the newspaper industry’s bread-and-butter advertising.
This is perhaps nowhere more evident then in the classified advertising sections.
Newspapers are losing help-wanted advertising. They’re losing auto ads. And even real estate ads are increasingly finding new homes.
The harsh reality is that newspapers nationally are losing billions of dollars in classified advertising that they used to count on as money in the bank. While $12 billion was spent in 1988 by local advertisers on newspaper classified ads, another $3.5 billion was spent on other media, according to estimates by the Newspaper Advertising Bureau.
The Los Angeles Times has recently seen its help-wanted ads dip 8% to 10% compared to a year ago, said Donald H. Clark, executive vice president of marketing. “Normally, when you see help-wanted ads start to go,” he said, “others eventually follow.”
What is to blame? An uncertain economy is a key factor, but a growing number of newspaper publishers are also pointing angry fingers at specialized advertising vehicles such as the Penny Saver or the Recycler.
Call them what you will. Throw-aways. Shoppers. Quarter-folds. Newspaper publishers are calling them killers.
“We used to figure out all kinds of reasons why these publications wouldn’t work,” said Dean Welch, director of classified advertising at the Atlanta Journal and Constitution. “I can’t tell you how wrong we were.” Welch’s newspapers recently began to offer readers the option to place classified ads for which they can call for recorded “voice-mail” telephone responses from readers.
The outside competition started with publications such as the Penny Saver that promised more targeted advertising for a cheaper price. And it has escalated into more focused publications such as recruitment tabs for people looking for work and automotive tabs for people looking to buy or sell used cars.
But one of the most recent--and most damaging--examples is specialized real estate publications that go by names such as “Home” or “Home Buyers Guide.”
“A competitive battle is heating up,” said Craig Standen, president of the Newspaper Advertising Bureau. “And it’s getting hotter.” Standen spoke Tuesday to executives attending the American Newspaper Publishers Assn. annual convention in Los Angeles.
The real estate publications, which are often distributed free on racks at supermarkets or convenience stores, now represent a $500-million business, he said.
But at least one newspaper is fighting back.
Facing stiff competition from a dozen competing real estate tabs in the local market, the St. Petersburg Times introduced its own real estate advertising magazine 1 1/2 years ago, said Al Corey, the paper’s advertising director. Although the newspaper’s real estate magazine wasn’t an immediate success, its most recent issue was 72 pages. Now the other real estate tabs in the area are being beaten at their own game, he said.
Similarly, the Toronto Star has virtually stopped trying to compete with local auto “shoppers.” Instead, it is starting its own and buying up others in the Toronto area, said David Richard Jolley, publisher and president of the Star. “Our philosophy is, if you can’t beat them, you might as well join them.”
