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Issue for April 2011

Are Your Ad Sales Improving Fast Enough?

Posted on Thursday, April 21, 2011 at 7:19 AM

Recession recovery has been slow for many publishers, but advertisers are already doing more advertising. Why are some publishers missing out?

By William Dunkerley

Last year, advertising expenditures grew by 10.6% worldwide. What happened to your ad sales? If you didn't see a positive rebound, you may be doing something wrong.

That suggestion may seem absurd. After all, you may be operating your publishing business much in the same way as you did before the recession. And if you were successful then, why wouldn't you be now?

That is very persuasive reasoning if you believe that your ad revenue losses during the financial crisis were entirely the result of the crisis. But they weren't! Did you know that some publishers maintained their sales revenues during the recession? Some even saw an increase in ad revenues.

The ebbing tide of recession did not bring down all ships -- and the rising tide of recovery will not lift all ships.

If you are hoping to rejuvenate your ad revenues, it's important to understand how some publishers sank and others rose to the occasion during the recession. This information will help you identify faulty business practices, correct any mistakes that you made, and chart a course toward increased advertising revenues.

The Cut Back Fallacy

Most publishers know very well that when an economic downturn approaches, advertising starts to dry up quickly. Advertisers see their market tightening and sales falling. One of the first things they do to save money is reduce advertising expenditures. It's a less painful move than reducing staff or cutting overhead expenses.

If you are looking at the market in a macro sense, those observations are an accurate depiction. But at the enterprise level things look different. What advertiser is going to curtail advertising that is bringing in profitable business? It's true that some companies make across-the-board ad cuts. But the smart ones will maintain or increase advertising that pays off. Research has shown that those companies are in better shape emerging from a recession than those that cut back on advertising.

So, what's "the cut back fallacy"? It is that recessionary advertising losses are unavoidable.

You can avoid or minimize the loss of advertising revenue in a recession if your publication functions as a sales engine for its advertisers.

But What About Now?

The same principle holds true as publications emerge from a recession. Increasingly, ad revenue will flow to (and stay with) publications that produce the best results for the advertisers.

Some publishers attribute their sluggish ad revenue recovery to the shift toward digital. There has been a lot of media hype about the gains of Internet advertising. Often, however, the data are presented in misleading ways. Here's the truth: From 2009 to 2010, the dollars gained by Internet advertising amounted to only about 2 percent of total 2010 media ad spending. And what's more, an important share of that 2 percent consists of ads carried by the digital channels of established print publications. So publishers cannot attribute a slow recovery of ad revenue to advertisers going over to the Internet -- not entirely, anyway.

The failure to provide advertisers with an audience of robust buyers is a more likely culprit.

Why Wasn't There a Problem Before?

During the pre-crisis economy, advertisers were not as tenacious about making every ad dollar count. That means they could spread around their money more. As a result, more publishers were able to garner a share of it. Because many publishers did not give due deference to advertiser needs when aggregating their audiences, their audience members had limited interest in what the advertisers were selling. These publications were inefficient advertising vehicles.

Sales effectiveness is another important factor. In good times, some publications can get away with an "order taking" approach to selling. When conditions are less favorable, a more assertive, benefits-focused sales strategy becomes essential. Weak sales skills and poor sales strategies are no longer adequate.

Generally speaking, during robust economic times, it is possible for a publication to operate inefficiently and still stay afloat. When the conditions worsen, that same inefficiency threatens survival.

Make Your Publication a Sales Engine

Your ascent from the advertising doldrums will depend in large part on how effectively you turn you publication into an efficient sales engine for the advertisers. Here are some suggestions on how to do that:

1. Determine whether the advertising segment you are targeting is the most lucrative. If it's not, consider repositioning your advertising sales focus. To accomplish that, you may also have to reposition your editorial content and your subscription marketing.

2. Identify the characteristics of your advertisers' customers and prospects, and target individuals with those characteristics in your subscription marketing. Don't market just to increase gross audience size. Seek readers who will be qualified prospects for your advertisers. In other words, quality over quantity.

3. Make sure that your editorial content is geared toward those targeted individuals. Editorial is the bait for attracting the right readers. Readers will never see the ads if they aren't compelled to read the publication in the first place. Be prepared for editorial repositioning if necessary.

4. You can amass the right audience, but without an astute sales force, the advertisers won't know about it. Information needs to be presented in terms that are keyed to each individual advertiser's particular needs and interests. Sales people should have good probing skills and be adept at creating tailor-made, benefits-oriented sales presentations.

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

Postscript: An anonymous reader asked for the basis of our claim that the 2009-2010 gain of Internet advertising amounted to only 2 percent of media ad spending in 2010. We calculated that figure ourselves based on data offered by eMarketer.com. That organization reports that Internet advertising for 2009 was $22.7 billion, and for 2010 was $25.8 billion. That's an increase of $3.1 billion. That amount is 2 percent of the reported total 2010 U.S. major media ad spending of $153 billion.

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Do Paywalls Really Work?

Posted on Thursday, April 21, 2011 at 7:16 AM

In the news: New York Times Web traffic has taken a hit since the publication instituted a paywall on its website.

When the New York Times announced that it was putting up a paywall on its website, the roar was deafening. Readers who had enjoyed free content for years were up in arms, and publishing insiders squabbled over whether the move was genius or folly.

The paywall is not as prohibitive as some. Readers can still view up to twenty articles free of charge each month. After the twentieth article view, they are asked to subscribe. According to the Times, only 15 percent or so of online visitors read more than twenty articles per month. PaidContent.org explores some of the page view and site visit statistics. Read more.

Also Notable

The Daily Roundup

So how is iPad's The Daily digital newspaper doing? It's hard to say, but Nieman Journalism Lab paints a bleak picture. It's too soon to write The Daily's obituary; the Nieman study examines Twitter sharing of the publication's content, not concrete subscription numbers. Nieman describes the interest level in dismal terms. Still, a recent tweak to the app to resolve some lingering technical issues may boost numbers. Read more.

Magazines on the iPad

Things remain tense between Apple and magazine publishers, but more and more magazines are showing up in the iPad store. The iPad subscription model can mean limited or no access to customer data, a compromise that makes it difficult for publishers to market their magazines effectively. For the time being, however, the iPad is virtually the only game in town. If other operating systems can adopt and subsequently improve upon Apple's subscription model, magazine publishers will have a host of options for their digital editions. The next high-profile iPad adopter? The New York Times. The newspaper plans to be available on the iPad by June. Read more.

Independent Mobile Publishing

Mobile advertising revenues may be on the rise, so it stands to reason that mobile publishing will grow considerably in the coming years. In a recent Folio: article, Marshall Matheson shares his strategies for "mobilizing" Web content with smartphone/tablet site redirects, apps, and QR codes. Devising a sound mobile strategy benefits publishers on two levels: 1) Magazine brands can tap into the exploding mobile user marketplace, and 2) They can attract new advertisers whose focus is mobile advertising. Read more.

Newsweek Owner Dies

Sidney Harman, who purchased the ailing Newsweek magazine last year, died last week at 92. His family intends to continue with the magazine. Read more.

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