Americans Like To Talk About the “Big Mo” – Momentum – Although Seldom Heard In The Same Breath As “Print Media,” But It Looks Like The New Dow Jones Management Is On The Right Track

Philip M. Stone March 2, 2006

You can almost feel the earth move. The print and the online operations at Dow Jones are merging. That’s not just the editorial operations but perhaps even more important the sales operations. The emphasis now is ensuring that all channels of information distribution are utilized to their utmost – editorially and also in making sure none of those elusive advertising dollars are left on the table.
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At the same time the guru of newspaper makeover, Mario Garcia, is hard at work on a new Wall Street Journal format due next January that reduces the Journal’s page size by 20%, at an $18 million savings mostly from less newsprint costs. He would be happier if the WSJ went tabloid, as he pulled off for the European and Asian editions last year, but there are limits to how fast, even under new management, the US WSJ moves in that direction. The word “tabloid” in the US is still a dirty word, and camouflaging it with the word “compact” doesn’t hack it either!

Those international editions, however, are said to be doing quite well since their tabloid conversion last September with advertising volume up – “our fourth quarter numbers are way up”, according to Jon Housman, managing director of the Wall Street Journal Europe (WSJE).

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The WSJE is planning to launch in April a weekend (Friday) 64-page glossy magazine called Style Journal focusing on the good life for those who can afford it – fine food, good wine, high-end fashion and accessories, and the kind of cars the rich enjoy. It is going after the same type of high-end advertiser that the US parent targeted with the launch of its weekend edition in Q4, an advertiser not otherwise normally seen on the pages of a financial newspaper.

The Financial Times has had that “rich” weekend magazine advertising market pretty well locked up with its How To Spend It glossy – what a great name for a supplement that makes no bones what it is about and for whom it is targeted  -- hopefully there is still time for WSJE executives to think of something with a bit more panache than “Style Journal”.

The WSJE will be looking to duplicate the financial success of the FT glossy. The FT, in announcing that in 2005 it made its first profit in three years, specifically credited the luxury goods advertising and global display advertising as playing a major role in its 2005 success, while the more traditional financial advertising sectors remained soft.

What all of this points to is that Dow Jones, under the new management of Richard F. Zannino, is beginning to show that after some very difficult years that had cost cutting at the top of its agenda that the focus has now moved to how the company can consolidate its operations to get the most out of the digital age.

And even Wall Street seems to like what it sees.  “Things are moving in the right direction at Dow Jones after several very challenging years,” according to Goldman Sachs.

Change or no change, the bread and butter of financial newspapers is still advertising from primarily the financial services, IT, and telecoms sectors, all of which remain somewhat difficult. But as that business picks up – and there are some signs that it is  -- then the real fortunes at Dow Jones will pick up as well.

What is really important in the new management shake-up is that the new publisher of the Wall Street Journal, L. Gordon Crovitz, has overall responsibility for the print and online editions. His empire also extends to Barrons, Marketwatch, the online financial news site bought last year that has had a difficult time adjusting to the DJ culture although it is already making useful financial contributions, and SmartMoney Magazine.

And while people will talk about how editorially the Journal’s print and online operations will come together – just as the New York Times had announced that convergence last August – the real task is on the sales side to bridge the divide between print and online.

No more should there be separate sales teams selling a single distribution channel, now sales should be integrated, all the various distribution channels should be included in obtaining the maximum overall advertising spend. At the Financial Times its FT.com saw a 27% increase in ad revenues in 2005 precisely because of the take-up by the largest advertisers of package deals involving print and online.

Marketing will no doubt produce plenty of glossy sheets of statistics showing the power of reaching all Journal readers no matter how they access the information – on the run with the Blackberry, the PC at home, or the print edition being read in the back of the limo.

One of the big problems that Garcia and Journal executives are wrestling with is how the new print edition will adapt to the new digital age, trying to get additional readers while not turning off its traditional readers. Will it dumb down, for instance, and cover fashion and entertainment not just from a business viewpoint, an extension, perhaps, of what it does for the weekend edition?

One trend for newspapers trying to save major newsprint costs is to stop printing much of that financial agate and point people instead to that information on the Internet that is updated as the day goes on. The European and Asian editions of the WSJ did exactly that, pushing readers for that information onto the web. That’s all well and good for those younger readers who live and breathe the Internet, but what about those readers who don’t?

There is a sizable population out there – mainly older – that really don’t spend that much time on the Internet, and not being able to get that information in their financial newspaper is a real lack of service. If the daily general newspaper cuts out the agate then shouldn’t at least the financial newspaper provide it? On the other hand that’s a lot of newsprint expense that can be saved if that information transferred to the web only.  Finding the right kind of balance will be occupying Garcia and Journal editors all this year.

Editorial convergence should really concentrate on pointing readers to the Internet for more information about items they have read in the print edition.  Let them listen to the podcast by an article’s author, or let them listen to the interview, better still — watch the video, read more statistics – in other words get the absolute full multimedia story that print alone cannot deliver.

Hopefully that is what Crovitz had in mind when he wrote to the WSJ staff, “The Internet will not mean the end of the print medium. But as people have many more choices about how, when, and where they will get their news, established media such as newspapers must adapt; we will be the first to adapt by developing a newspaper for this digital age.”

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Changes Ahead for the Tabloid International Wall Street Journals - April 3, 2006

Since the Wall Street Journal international editions turned tabloid in September they seem to be a hit with advertisers – no doubt because rates are lower for tabloid space than for a broadsheet – but it seems the readers have the perception there are now less stories.

So Richard Zannino, Dow Jones’ new ceo, has announced there is going to be some” retooling”, but he didn’t go into details.

DJ’s spokespeople in Europe call this just part of an ongoing process of making tweaks -- for instance the papers have reintroduced the Pepper & Salt cartoon that had been dropped and they have added the people index – but if readers believe they are getting less now than they got before then that seems to call for more than just tweaking.

The reason the international editions went tabloid is because they were losing money, advertising was down, and circulation wasn’t doing much, so for the most part it was a cost-cutting exercise. If people now have the perception that the amount of news copy is down and management wants to change that perception then how else do you do it unless pages are added (more cost) or action is taken to decrease even more the amount of financial data the papers print directing readers to the web site for that information, and take the saved space and run more stories.

Six months after the tabloid launch DJ is still giving away a web subscription to those who sign up for a print subscription of the international editions.

“Advertisers have been very happy” Zanninio said. What he didn’t say is what kind of deals they were offered to get going in the tabloid editions. Most other newspapers that have switched to tabloid found that advertisers wanted large discounts since the believed they were buying less gross space – in other words a tabloid page does not equal a broadsheet page.

Zannino said he expected the Asian edition to turn a profit this year, but the European edition will still show a small loss.