Is There a Future for Legal Ads?

     Have you ever heard of the "dusky seaside sparrow?"
     It was a small, black and white bird that lived near Kennedy Space Center in Florida. But the sparrow’s habitat slowly dwindled and by the late 1970s, only a handful of birds survived. A "captive breeding program" was established in 1979 in an attempt to save the sparrow from extinction. It failed, and the last dusky seaside sparrow died in 1987.
     Legal advertising is the dusky sparrow of the newspaper world.
     "Legals" are on the endangered species list, and although publishers are working to keep legals, or "public notices," in newspapers, they’re dead. Gone. History.
     All that remains is to see how long they last, and in what form.
     Legal notices themselves will never go away. But the likelihood that newspapers will keep them as a long-term, viable revenue stream is near zero. Legals will migrate from print, where they’re published now – a requirement in all 50 U.S. states and in many countries internationally – into new forms and delivery methods. Over time, they’ll probably migrate into databases that are accessible in a variety of formats and locations – with e-mail delivery to people who request it.
     It’s happening already.
     How long will the evolution take?
     Tough to say, but in the U.S. it’s probably 12 to 15 years before most public notices move out of print. Maybe longer, if newspapers are lucky; maybe only five to seven years if one or two state legislatures, or even municipalities, get aggressive about saving the money they pay for publication.
     To small-market dailies and weeklies that need the income from legal advertising to make a profit, this is a significant threat. To broadcasters and dot-coms, there may be opportunities to develop a significant new revenue stream by offering legal advertising online and through new delivery systems like a digital TV channel or vertical-blanking interval.
     State press associations are battling to save the legals for print publishers.
     "Legals" can be broadly defined in two categories:

"Public Notices" – government advertising for bids and procurement, zoning changes, legislative proposals, election notices, tax increases, sales of properties for unpaid taxes, and the like.

"Notice by publication" – legally required announcements by individuals or companies to notify the general public of legal matters, or to notify individuals who can’t be found for process service. Examples include foreclosures; adoptions and terminations of parental rights; estate notices, bankruptcy and "not responsible for debts incurred by others;" private corporation ads seeking minority and women bidders on specific projects, etc.

     Way back when, notices like these were publicized with a flyer at the local courthouse, post office or town square. But nowadays, governments have established specific requirements for publication of legals – typically, to ensure equal access to all, and to grant the agency or individual a way of meeting defined publication requirements.
     One small weekly we know of – the publisher asked not to be named – gets 50% of its advertising revenue from legals. While it’s an extreme case, it’s a grim situation.
     "It would be devastating to [the paper] to lose the legals," he says. "There’s not a lot I can do about it. It would be very difficult to make up. It would be a big problem for me.
     "If it’s in 20 years, I’m not going to worry about it – because I’ll be ready to retire by then. But the nature of the business could change. You lose the legals, maybe you [can] make up for it with something else. Or it’s possible they might pay the paper to put the legals on the Internet."
     To their credit, members of the Newspaper Association Managers devoted two hours to this topic at their meeting recently in New Orleans. These state and regional press organizations discussed the trends, the threats, the opportunities and the legislatures that are attacking legals.
     Their job? To lobby in support of their publisher members, and to try to make sure that legal rates keep rising while the legislatures keep perceiving the necessity for uniform publication requirements in print.
     Some state associations are going farther, however. They’re developing online databases of legals, aggregating them into a site (or sites) where lawyers, contractors, credit agencies and others who use the legals can search them quickly and easily. In one state, they’re offering an e-mail subscription service for legals that have already appeared in print.
     Will these efforts save printed legals?
     Nope. In the long run, they’re doomed. But for a while, publishers will be able to count on this revenue stream. They’d just better understand that nothing is forever.

Zollman (pzollman@aimgroup.com, (407) 788-2780) is founding principal of the consulting firm Advance Interactive Media Group.