Should weeklies even target national ads?

The question posed by Strategy is what must community newspapers do, from a sales and marketing perspective, to get their product into the mainstream of national media buys?This leads, however, to an even more basic question. Should going up against daily...

The question posed by Strategy is what must community newspapers do, from a sales and marketing perspective, to get their product into the mainstream of national media buys?

This leads, however, to an even more basic question. Should going up against daily newspapers for a larger piece of the national advertising pie be a priority for community newspapers?

Frankly, I think that’s a dubious proposition and I would like to point out some reasons for my opinion.

In the first place, many community papers have no hope of attracting significant national advertising revenue.

They are in small markets and, increasingly, tight budgets mean that national advertisers are concentrating their efforts in the key major markets.

Little incentive

Clearly, the minor market papers have little incentive to support efforts to build community newspapers’ share of national advertising.

In the major markets, community newspapers have a different problem.

They are not cost-competitive with the major dailies, in spite of their low absolute cost.

A good example of this is shown in the table above. Total cost, circulation and cost-per-thousand impressions for a 600-line ad in The Toronto Star are compared with those in a selection of Metroland newspapers (owned by The Toronto Star).

As the table above shows, the community newspapers would have to slash their line rates by 43% to be fully price-competitive for national advertisers.

They might also have to cut rates for their major retail customers to maintain a satisfactory retail/national relationship.

Obviously, this would be a crushing blow to margins – but it’s hard to see how community newspapers can hope to add significantly to their share of national advertising without addressing the cost problem.

Lack of information

A further barrier to increasing share of national advertising is the relative lack of research information.

Media people are accustomed to the wealth of data about dailies which NADbank, a readership study commissioned by the Newspaper Marketing Bureau, provides.

Community newspapers would have to make a major investment in research to provide comparable reader and market information.

PMB: Print Measurement Bureau data on community papers is helpful, but it falls short in several areas, notably, it does not permit reach/frequency projections to be made.

Community newspapers would also have to mount a major sales and marketing push to build national advertising business.

This would have to be done individually, by community newspaper groups or, perhaps most effectively, through their trade group, the Canadian Community Newspapers Association.

This would mean a greatly increased investment of money, time and effort to market effectively to national advertisers and their agencies.

As I pointed out earlier, this effort would fall largely to the major market community papers since those in small markets have little to gain.

It is my view that a determined effort to build national advertising for community papers would result in lower margins accompanied by the need for major investments in research and marketing.

All in all, not a particularly attractive picture for the management of these papers.

Contrast this hard, expensive and probably drawn-out fight to build share of national advertising revenue to the current successful focus on retail advertising as the principal source of volume.

Evidence to support the success of this strategy is plentiful.

Perhaps the best evidence is revenue growth. Community newspapers showed growth of 64% from 1985 to 1990, ahead of the 44% revenue growth reported for dailies and the 55% growth for advertising revenues as a whole.

Among the major media, only television showed greater revenue strength during this period.

Newspaper Line 600-Line

Rate* Cost Circ. CPM

($) ($) (000) ($)

Toronto Star 16.37 9,822 494.7 19.85

Etobicoke Guardian 3.17 1,902 67.0 28.39

Markham Economist 2.76 1,656 30.0 55.20

Mississauga News

Community Supp. 5.84 3,504 108.0 32.44

North York Mirror 4.20 2,520 70.0 36.00

Richmond Hill/

Thornhill Liberal 3.47 2,082 42.0 49.57

Scarborough Mirror 3.73 2,238 82.0 27.29

Total Community Papers: $13,902 399.0 $34.84

* Transient rate with applicable discounts.

Source: CARD, March ’93

Interestingly, this healthy growth is based on dependence on retail advertisers for 90% of community newspaper revenue.

Apparently, they have found their niche and are thriving in it.

Weekly newspapers are also showing growth in share of advertising revenues, while dailies continue to fall. (See chart, page 20.)

1979 1989

Dailies Weeklies Dailies Weeklies

Total revenue 35 8 32 14

National revenue 20 3 22 2

Retail revenue 47 1 2 40 23

*Base includes: TV, magazines, weekend supplements, radio, daily

newspapers, weekly newspapers

Again, this share of growth is due to the retail segment, with indications that community newspapers’ miniscule share of national advertising revenue is falling.

The gain in retail revenues, however, more than offsets this drop.

Another indication of the success the weekly papers are having in exploiting their retail niche, is the degree to which they have attracted the attention of the major daily newspaper publishers.

Over the last five years, TorStar, Southam and Thomson have increased the number of community newspapers they own from around 30 to over 130.

To sum it all up, if I were the publisher of a community newspaper, I would continue to focus on the key retail advertising segment for further growth.

My efforts to develop national advertising would be directed to those (relatively few) national advertisers who want a very tight geographic focus or who have a minor market skew.

Norm Sommerville is vice-president, group manager, media planning at Toronto-based Initiative Media.