While the sharp downturn in 2008-09 was felt throughout the entire economy, after 20+ consecutive quarters (five years) of declining advertising revenue and in many cases circulation revenue, it might be safe to say that a trend has been somewhat established within the newspaper industry.
Regardless of the outcome of the debt limit debate in Washington, D.C., it clearly illustrates the fragile atmosphere in which we currently reside as an industry, in the United States, and throughout the world. Some say we are in for a ‘W’ curve with the second wave or downturn about to strike. Of course, most might ask, where was the bounce back from the first dip that a ‘W’ curve would indicate? But that is another topic for another day.
While every market is different and has its own variances, each of us must ask ourselves: are we prepared for a second deep dip should it occur? Most have already gone through the cut-and-slice mode. Most have already streamlined various jobs and functions throughout their buildings. We have done many of the traditional tasks to ensure we survive. But are you prepared for the double-dip, or are you one of those that will become extinct with the next big economic hit?
It has been said that the very definition of insanity is repeating the same action expecting different results. If that is true, it is imperative that we do things somewhat differently to survive. It is no secret that U.S. newspapers rely heavily on our advertising revenue to survive, thus the downturns impact us to a greater degree than many of our foreign counterparts. I understand as well as anyone the stress on the current circulation model. That said, those circulation bones have a bit of life left in them. Many newspapers have cut so deep in the circulation arena, they are literally living a self-fulfilling prophecy of destruction.
Might I make a suggestion? I believe we can buy additional time by minding the circulation store and going back to some of the traditional basics we have gotten away from as times got tough. Stabilising the circulation front — which I believe is far easier than stabilising the advertising front — can go a long way towards providing us additional time to innovate in other areas.
That isn’t to say that we ought not innovate and continue to come up with new circulation approaches that include online, tablets and so forth. It is simply saying that our readers, many of whom are baby boomers, will read the print product when given choices.
The beauty of this approach is that everything being done in the circulation department can be measured, scored and evaluated for effectiveness. You don’t need to guess if you are impacting the bottom-line; you can measure and score with remarkable accuracy.
If it costs US$50 to generate a paid 13-week order, you know exactly the impact on your bottom line due to circulation expense and revenue, pre-print revenue and allocated ROP dollars. This is the one department in the building where justifying your expense is very simple and straightforward.
If you have been the victim of deep cuts, put together a plan of attack and present it to your publisher. Don’t make the mistake of going and asking for X dollars for sales and/or retention pressure. Go in and ask for X dollars which you will be accountable for and that you plan to bring back Y value to the bottom line. That allows the publisher to see the benefit of unleashing the purse strings and adds credibility to your numbers and request.
Be confident and straightforward! Likewise, be honest by telling him or her the price that will be paid by not spending the money. So, when things continue to tank, you have covered yourself with the numbers.