Hit the Gas, Not the Brakes!
- An open letter to newspaper publishers

by Tom Ratkovich

The inevitable slowdown in the U.S. economy is upon us. And although the impact such a slowdown has on the economies of Europe, Latin America and the Pacific region is not what it was a decade ago, we can be assured that the tremors will be felt around the world.

So, what are the implications for the newspaper industry? What are they for your newspaper specifically? Should you prepare for softer revenues by cutting costs? Can you raise your rates enough to maintain your margins and shareholder value? Do you postpone investments that might ensure your viability and prosperity in the long run? Can you ride this one out without getting hurt too badly?

We all know what the answers to these questions have been in the past: "Absolutely," "We're sure going to try," "We have no choice" and "My job depends on it." And based on the early returns, the reaction by most of your peers to the current economic scenario appears to be no exception.

I beseech you to reconsider. In fact, I hope that you will do just the opposite of what your gut reaction — and tradition – compels you to do. Put your foot on the gas — not on the brakes.

You see, the right question to ask is not about retrenchment; it is this: How can I leverage and invest in the unique competencies of my company to garner a bigger share of what is sure to be a smaller pie?

Put yourself in the shoes of your advertisers. They need to cut costs, do they not? They need to spend a smaller ad budget more efficiently. In other words, their dollars, pounds, euros or reais need to be targeted to those consumer segments representing the best customers and prospects for their products and services. Traditionally, that has been bad news for your newspaper. Not any more.

Today, your newspaper is the entity most capable of helping its advertisers spend their money most efficiently. By leveraging your unique data and distribution capabilities appropriately, you will create a competitive advantage that other media can only dream about.

Consider the logic. It is likely that most of your advertisers use a variety of communication channels, including direct mail, Internet, broadcast and, of course, the newspaper. How much redundancy might exist across those channels? How many consumers, for instance, might be exposed to the same offer through direct mail and again through the newspaper?

In times of economic prosperity, such duplication does not receive much scrutiny. In fact, it is often rationalized as building brand awareness through repetition and impressions.

Unfortunately, such is not the case is a softer economy. Instead, marketers strive to minimize such duplication. In doing so, it is often your newspaper that takes the biggest hit resulting in a smaller piece of a smaller pie. Why? Because other media options are perceived as more targetable and measurable.

But optimal efficiency can best be achieved through intelligent integration across all appropriate communication channels. Your newspaper is the only entity that can make that happen in your market.

So instead of cutting, invest in your database capabilities to acquire, analyze and apply information that will help your advertisers communicate with the right people. Invest in your distribution capabilities to incorporate better preprint zoning, direct mail and email communications that complement ROP advertising.

In other words, if you anticipate shrinkage in your traditional revenue streams, invest in non-traditional ones. If your customer is top of mind, you will do well.

Reproduced here from IDEAS Magazine, the publication of the International Newspaper Marketing Association (INMA), March 2001. Tom Ratkovich is the president and founder of ASTECH InterMedia. He can be reached at 303.296.9966 x11.

© 2005 ASTECH InterMedia, Inc.