Service of Déjà Vu

June 25th, 2012

Categories: Advertising, Manufacturing, Marketing, Newspapers

newspapers

This post is about marketing.

I worry about the newspaper industry for more than the obvious reasons: Shrinking readership, slashed editorial budgets, the good reporters are melting away, little competition and negligible investigative reporting. I think many publishers are following a shortsighted, sure-to-fail marketing strategy that I’ve watched others try, one that has landed others facedown in the mud with a splat.

In Jennifer Saba’s article for Reuters: “Analysis: In scare for newspapers, digital ad growth stalls,” she wrote: “As more newspapers cut back on print to reduce costs and focus on their websites, a troubling trend has emerged: online advertising sales are stalling.”

adspacehereWhy?: “A flood of excess advertising space, the rise of electronic advertising exchanges that sell ads at cut-rate prices, and the weak U.S. economy are all contributing to the slowdown, publishing executives and observers say.”

The electronic advertising exchange concept alarms me the most. The rationale behind using them reminds me of the advent of the 800 numbers. Manufacturers bemoaned them for selling their goods at cut-rate prices. [I wondered: “How did your brand get there and did you have no control over this?”] There were severe discounting strategies and licensing frenzies. Some sold goods with their brands posted prominently at both big boxes and boutiques, the former versions of inferior quality. This demeaned their brands leading to the demise of many. In addition, why would anyone pay full freight for a product that was available at umpteen places for half price or less?

Back to the advertising exchanges, Saba explained that they: “…are electronic platforms that allow buyers to bid on and purchase advertising space at drastically reduced prices. Many websites — not just newspaper sites — rely on these exchanges to sell unclaimed advertising spots, known in industry parlance as excess inventory. The thinking is it’s better to get something than nothing at all.”

Saba continued, “But it also trains ad buyers to expect lower advertising prices. ‘It’s like a publisher trying to sell me an Armani suit for $3,000 but I can walk around the corner and buy it from Google for 90 percent less,’ said Shawn Riegsecker, chief executive of Centro, an agency that specializes in buying and selling digital ads, and counts many newspapers as its clients.”

wallpaperWith the strategy of cavernous discounts and helter skelter product placement, manufacturers lost sight of the value–and sizzle–of their lifeblood. Try to Google images for “wallpaper”  and you’ll not see a slice of the decorative kind–just the electronic variety. I cringe to see newspapers follow the same destructive path.

What can stop this spiral? What other product lines or industries have been destroyed by deep dish discounting and sloppy marketing?

spiral

4 Responses to “Service of Déjà Vu”

  1. Lucrezia Said:

    No need to worry about the demise of newspapers. Chances are they are on the way out, with sloppy and/or boring ads being only a small part of the reason. They may or may not survive digitally, but in order to find out, some of us must be reincarnated several centuries from now.

    I read somewhere that the public is rapidly tiring of ads, and should this be true, one can only wonder at their proliferation. The marketing world is apparently deaf to this rumor and shoves even more at us, with increasing insult to the readers intelligence. The adage of “less is more” might well be applied with the possibility of success.

    Note that Mayor Bloomberg and Governors Christie and Cuomo have become increasingly impatient with UFTs reluctance to remove deadwood from the schools. Should their insistence for quality prevail, students will profit. Now should similar princples be applied to marketing, this should result in a happier public and fatter profits for all.

  2. Jeanne Byington Said:

    Lucrezia,

    Your point about not listening to the public when it comes to ads is quite remarkable relating to TV as well as digital popups or any adverts. Even Public TV is crowded with commercials/sponsorships. With the exception of Turner Classic Movies and a Saturday night movie on PBS, you can’t follow a film for all the ad interruptions on other stations.

    How a station or news source monetizes what it does is the challenge. But if folks flip channels, turn pages or click off popup adverts, it only proves your point: The model needs revamping.

  3. JPM Said:

    For years, I read the “N.Y. Times” cover to cover. It was compulsory reading for anyone with a need to know what was going on in the world. Gradually I stopped reading it as the paper’s policies became increasingly canted towards political correctness and the paper expanded its previously subdued bias for manipulating its news articles to dupe its readers into believing that persuasive “facts” [that really weren’t facts] but suited the papers political agenda would pass as news.

    A case in point is the “Times’” coverage of Egypt and the so-called “Arab Spring.” The paper strangely rhapsodized exuberantly at the overthrow of Mubarak and the possibility of “free” elections in Egypt, when anyone worth his salt, who knew the country, including its own reporters I suspect, understood full well that the only possible outcome of “free” elections in Egypt would be the coming to power of Islamic militants. This has happened and now the only hope for Israel, the Christian west, and for the Egyptian people for that matter, is that the military intervene and re-impose a military dictatorship. I believe the “Times” can be held partially responsible. Had it reported responsibly and truthfully what the likely outcome of the Egyptian “Arab Spring” would be, then much past, present and future suffering might have been avoided.

    My point is that I wonder if the “Times’” loss of advertisers does not have more to do with its loss of readers like me than any pricing issue. The space buyers aren’t stupid. Do they really want to advertise in a paper that prefers to be read by gullible ignoramuses?

  4. Jeanne Byington Said:

    JPM,

    You are harsh on the paper of record. I am not familiar enough with the history of Egypt to refute your analysis. In the panic over lack of readership and transferring what they do to a digital world, so many papers have lost their way by firing the talent that made them worthy of people’s time, whether they read news and features on a mobile device or by smudging their fingers with ink at the breakfast table.

    It wasn’t only the NY Times that raved about the promise for democracy in Egypt “thanks to Facebook and other social networking vehicles.” [I still wonder whether typical Egyptians, who were not educated abroad, owned these devices or if they belonged pretty exclusively to graduates of Oxford, the Sorbonne, Harvard and University of some place in the US.] And didn’t we hear about the promise on all TV networks and in news features?

    For someone who devoured the paper for years to no longer read it—multiplied by others—has to be devastating to advertisers and the publisher.

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