In the news: In a recent pivot, Google has announced plans to start paying some publishers for news content, raising questions about its motives.

Google is launching a new initiative to pay publishers for their news content. Lucinda Southern of Digiday.com reports that Google will start in Australia, Germany, and Brazil, and is reportedly in talks with several other countries.

The move has some publishing veterans wondering what Google’s true motives are. It may be a PR move; according to Southern, “Writing a check to publishers in regions where it’s feeling the heat from regulators for not paying publishers buys some goodwill, according to sources.” Other publishers note that Google has left itself plenty of loopholes in its carefully worded statement. Read Southern’s piece here and Google’s statement here.

Also Notable

AP Now Capitalizing “Black” and “Indigenous”

The AP has recently updated its style guide to capitalize Black when used in a “racial, ethnic, or cultural context.” They will also capitalize Indigenous when referring to the original inhabitants of a specific place. Read more here.

Note from the editors: STRAT and its sister newsletter, Editors Only, have adopted these recent style changes.

A Critical Juncture for Newspaper Publishing?

This week could spell big changes for the newspaper industry. Ken Doctor of Nieman Lab reports on critical junctures facing news publishers Tribune and McClatchy in the coming days. “On [June 30], Tribune Publishing will reach the end of two ‘standstill’ periods. Tribune’s two major shareholders -- Alden Global Capital, with 33 percent of the company’s shares, and Los Angeles Times owner Patrick Soon-Shiong, with 25 percent -- had promised not to actively buy or sell any shares until June 30.” Elsewhere, Doctor reports, “On [July 1], final bids for McClatchy’s 30 newspapers are due, as the country’s second-largest chain prepares to wind toward some exit from bankruptcy.” Read more about these two developing stories here.

NYT Ends Partnership with Apple News

This week, the New York Times ended its partnership with Apple News. According to Kathryn Hopkins of Women’s Wear Daily, “the service failed to boost readership numbers, chief operating officer Meredith Levien said Monday [June 29]. She also pointed out that Apple does not give partners enough information about user data.” Hopkins reports that the NYT hopes to draw readers directly to its website and app. Read more here.

The Future of Media Post-Covid

What will the print media landscape look like once the Covid-19 pandemic has receded? Sean M. Wood of Editor & Publisher considers the question in a June 29 piece. “The COVID-19 pandemic may be the single greatest defining event for local print publications reshaping distribution, advertising, staffing and community engagement,” he opens. “Unfortunately, for a number of local dailies, alternatives, weeklies and free publications, the pandemic could be an extinction-level event.” Read Wood’s take on the problems print publishers have faced, are facing, and will continue to face here.

The Covid-19 “Engagement Surge”

Publishers need to be thinking about how to keep the “engagement surge” momentum going after the pandemic has ended, writes Caysey Welton in a recent Foliomag.com piece. Welton discusses the surge in traffic many publishers have seen on their websites and how they can keep those readers after things have returned to a new normal. The article examines how several publishers plan to parlay recent surges in traffic into more long-term gains. Read more here.

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Help advertisers avoid short-sighted cost-cutting measures that save money in the short term but damage their business’s future prospects.

By William Dunkerley

The plight of magazine publishers in the Covid-19 crisis gets little public attention. Foremost in the news are, of course, concerns for personal safety and survival. Remarkably, that topic has actually devolved into a matter of competing political positions. On one side media commentators minimize the risk. Some view rules or recommendations to wear face masks as infringements on their constitutional rights. The other side favors a cautious approach that places public health somewhat above individual liberties.

Aside from the personal sphere, there is the business side of things. Many categories of business were forced to shut down or switch to a completely different modus operandi. As magazine publishers we've escaped that. We don't require the congregation of consumers in a physical place. We don't have the potential for spreading contagion. But our businesses have been hurt nonetheless.

So what's our problem? It's what's happened to the ad market, for one thing. Circulation has been a problem for print B2B magazines, which have been confronted with the prospect of sending copies to empty offices. That's led many to turn to digital solutions.

But What About the Ad Market?

What can you do if your advertisers have cut back or cut you out? Here are a couple of strategies for dealing with the present predicament.

There is a pattern that has been long established regarding recessions and is relevant now in the Covid-19 crisis: Companies tend to cut ad budgets on the leading edge of a recession. Faced with revenue shortfalls, they want to cut expenses in response.

Many find it easier to pull back on advertising than to reduce staff or downsize office space. The thinking is that those reductions will be difficult to revive quickly when business revenues recover. But ad expenditures can be reduced and later brought back up at will.

There is one flaw in that approach, and it involves another long established pattern involving recessions: Companies that maintain their advertising presence throughout a recession have been shown to make a better recovery when it is over. They lose less of their customer base and they haven't given competitors an opportunity to gain ground.

This phenomenon can be used as a sales strategy. When advertisers cut ad budgets, they aren't thinking of future consequences. They are preoccupied with revenue shortfalls in the face of fixed operating expenses. Guide those advertisers to an awareness that ad cuts can be a false economy, one that will suppress future revenue prospects.

An Option Publishers Can Offer to Advertisers

What can advertisers do if they are not bringing in enough revenue to cover expenses?

If an advertiser is in a position to secure a loan from somewhere, this may be a good time to get one. The advertiser might also consider temporary salary adjustments or selling equity to raise cash. It might be challenging, though, in finding equity buyers when the business is in some stage of distress. But overall the idea is not to allow short-term cash flow problems to compromise future business prospects.

Another alternative worth exploring is for you to offer credit to the advertiser, to make advertising with you affordable today. Especially if we're talking about an online publication, this could work out favorably for you. You'll have little or no incremental expense for running a company's ad.

Don't start by offering credit for 100 percent of the ad price. Find a percentage that will put the deal at a price the advertiser will pay. That way you'll get some revenue to meet your operating expenses! Be sure to make eventual payment a legally binding matter so you can collect when conditions improve. Also be sure never to use the word “discount” for this. Discounts are gifts. They don't get paid back. This strategy is about extending credit in a legally binding way.

This strategy will work to the advantage not only of the advertiser, but to your benefit as well. A publication that appears to have been abandoned by advertisers may look less attractive to its readers.

Indeed, with many magazines the ad content is part of the package that readers want. I know of at least one publication for which surveys have shown that subscribers read the ads first. Don't shortchange your subscribers by letting that valuable commercial content slip away.

So that's one strategy: selling the idea that continuing an ad schedule will help the advertiser to recover when the crisis subsides. Here's another strategy that is related.

Like serious recessions, the Covid-19 crisis will take a fatal toll on some businesses. Some will struggle in bankruptcy for a while. Others will just go out of business.

Many of the prospective customers of the businesses that advertise with you will have seen the advertisements over a period of time. Their principal sign that any particular advertiser is still alive is that company's ads in your magazine.

What will readers think when the ads disappear? What advertiser wants to leave room for the impression that the company went under from the crisis? Present that notion to your advertisers and let it sink in. It may keep them from cutting their schedule with you or cause them to reassess cuts already made.

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

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During this time of crisis, we stand ready to answer any specific questions our readers may have, time permitting. You can contact us at:

crisis-help@stratnewsletter.com

When the national health crisis subsides, publishers unfortunately should not expect to easily resume business as usual. Economists are predicting tough times ahead. In addition, the impact of the crisis may well result in different expectations of us on the part of our audiences. STRAT will provide a series of articles to help you all through the period of recovery and readjustment.