Lessons Learned

Lessons Learned During Recessions

Newspapers can learn from mistakes the industry made during the recession following the Gulf War to avoid losing advertisers in the aftermath of the Sept. 11 attacks, a marketing expert told a conference of newspaper editors earlier this Fall.

Newspaper tried to ride out the recession in the early 1990s simply by waiting for it to end, International Newspaper Marketing Association executive Earl J. Wilkinson said.

Instead they should have developed new ways to attract and keep advertisers, their most important source of revenue, he said.

"Newspapers are organized like sponges – we’re good at soaking up money, but we’re not really set up to go after it," Wilkinson said in a speech to the annual conference of Associated Press Managing Editors.

Before the attacks on the World Trade Center and the Pentagon, newspaper advertising revenues – particularly employment advertising – were declining.

The lesson newspapers should take from the previous decade is that advertisers will return when the economy improves, Wilkinson said.

The key to winning them back is offering them what they need in difficult economic times, including more targeted advertising to compete with the Internet and cellular devices, he said.

U.S. newspapers get 87 percent of their revenues from advertising, and the early 1990s recession cost them about $37 billion in lost revenues, according to a report Wilkinson compiled on the newspaper industry after the attacks.

During the 1990s, newspapers also began to lose advertising dollars to competitors such as direct mail marketers and cable television, which deliver messages to a specific audience. Between 1992 and 1996, newspaper advertising grew 26 percent, while cable television grew 136 percent, radio grew almost 45 percent and direct mail grew 41 percent, according to Wilkinson’s report.

Those competitors won over advertisers because they changed, while newspapers didn’t, the report said.

Wilkinson said a slow economy also can be an opportunity for newspapers to attract advertisers by spending more money on promoting themselves.

Last year, North American newspapers spent 1.7 percent of their revenues on marketing, half of what they spent on trying to increase circulation. Wilkinson called that kind of spending "roughly the equivalent of bringing a slingshot to a war zone."

- from the Ohio Newspaper Association