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The Young Broke Box Office Records For Spider-Man 3 And That’s Really Bad News For Newspapers As Sony Pictures Concentrated On Digital Marketing Rather Than Newspaper Ads, Toyota Relaunches The Scion xB Without Newspaper Ads, And Macy’s Warns Publishers They Will Continue To Lose Out Unless They Change Their Ways.

With the young your primary customers, and you believe that target audience has drifted away from newspapers to the Web then who can blame Sony Pictures for following the money to the Web too, with resulting box office records for Spider-Man 3 around the world. Sony intentionally cut its newspaper marketing spend to increase its digital activities, and the studio couldn’t be happier. Are newspapers a necessary advertising spend any more?

scion suv
And this will not be advertised in a newspaper near you

Sony Pictures pulled out all the online stops – it had ads all over MySpace, it sponsored a multitude of blogs, it offered free Spider-Man games, there were downloadable movie trailers and as Jeff Blake, Sony’s head of global marketing and distribution explained, “The Web is a pretty economical way to reach moviegoers.”

While television and billboards got big spends, Sony intentionally reduced the newspaper spend.”The Internet as a marketing vehicle has grown in leaps and bounds,” Blake said. Without giving away numbers, he said a “substantial part” of the budget had been migrated from newspapers to the web.

Sony had pretty much bet the studio on Spider-Man 3 being a huge success. It cost around $400 million to make and by the time everyone gets their cut it needs about $800 million to show a profit. The marketing had to be just right to fill theaters, and Sony’s decision to divert huge amounts to Internet activities and away from newspapers can only be sorry news for print.

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US Internet Advertising in 2005 Grew 30% Over 2004, and Newspapers Can Take Heart Their Web Sites Got About 16% of the Total, About Nine Times More Than TV Station Web Sites
The forecasts were about right – Internet advertising grew by 30% in 2005 and Q4 actually saw a 34% increase over the same quarter a year earlier, but some traditional media are doing better than others in taking advantage of the multi-platform approach. Newspapers are doing OK; TV has a long way to go.

Can Newspapers Maintain Their 20% Plus margins in 2006 On Print Ad Revenue That Could Actually Decline By 1.5%? The Answer May Rest On The Advertising Opportunities Their Own Web Sites Provide
If a publisher takes as a basic premise that the trends of past years will continue in 2006 – that print advertising growth will be less than 5% -- the bears say it will actually drop 1.5% and fear that is too optimistic -- and that Internet advertising will grow from 20-30%, is there any way to continue the usual 20% plus margins?

Circulation Increases Four Times As Fast As The Internet Is Growing – No, Don’t Get All Excited -- It’s Visitors to Newspaper Web Sites. On the Other Hand, Maybe That Is Something to Get Excited About!
For all the really bad news about US newspaper circulation figures – down 1.2 million in the past six months – there was one piece of good news: the numbers show undeniably that newspaper web sites are the most frequently visited for news and information.

The Bad News for Newspapers Keeps Getting Worse: “Newspaper Revenue Shifts to the Internet” Cries Out One Headline, “Bank Warns Newspapers of Rough 2006” Screams Another
Just what a newspaper publisher doesn’t want to hear: “The consistent growth in overall Internet advertising shows marketers may be shifting more of their total advertising budgets online,”, according to David Silverman, a partner with PriceWaterhouseCoopers.

US Newspaper Internet Sites Grew 2004 Advertising By 26.7%; Print Newspaper Advertising Rose by 3.9%. Which Do You Think Is the Growth Market?
For those newspaper publishers searching for double-digit advertising growth opportunities in 2005 they need look no further than their own web sites. Statistics released by the Newspaper Association of America showed record advertising revenues for US newspaper Internet sites in 2004 of $1.5 billion.

Other studios will no doubt pay close attention to how Sony achieved its marketing success. After all, most movies are aimed at getting the young to put their bums on seats at movie theaters and Sony has perfected the way forward.

Pickup a Friday Los Angeles Times or New York Times or other major metropolitan newspaper and one finds full page ads upon full page ads for movies opening that weekend. But those ads have been getting less and less over the past year and there’s good reason. They don’t come cheaply – maybe up to $100,000 each in the bigger newspapers -- but if the young aren’t reading those newspapers, then what’s the point of the ads? When it comes to the young – and we’re talking from the youngest teenagers on up – “Where thou goest, movie marketing goest, too.”

Around four percent of studio marketing budgets were spent on online ad campaigns last year, but that doesn’t include promotional activities like setting up web sites and the like. Look for the web spend  to grow by leaps and bounds.

And it’s not just movie ads that are migrating away from print. Who could have imagined a national car relaunch without newspaper advertising, and yet Toyota, the world’s largest car maker, is doing just that. For its redesigned Scion xB that went on sale this week there are no TV ads, and no ads in mainstream print publications. The car is aimed at male urban drivers aged 18 to 35 and Toyota believes there are better ways to reach that demographic – the Internet and Outdoors.

Toyota’s campaign is aimed at a demographic that spends more time surfing the Web than surfing TV channels. It has set up Want2BSquare.com filled with video and games. It is choosy where it will place its Internet ads – none on MySpace, for instance, because that is too mainstream. Outdoor billboards are being used to poke fun at the shape of the boxy looking car.

No one has really tried to launch a car without newspapers of TV since Volvo tried it in 2000, putting its entire ad budget for the S60 into an America Online campaign. Sales were not great, but if Toyota pulls this one off then other car launches will surely take notice..

Department stores have long been the anchor for newspaper display advertising, but that has taken a hard downhill turn in past years because of store consolidation. Where there may have been several different department stores in town now many have consolidated under one brand, like Macy’s for instance, and so the overall advertising volume is down.

But even the department stores have been looking ever more at digital campaigns and Anne MacDonald, Macy’s chief marketing officer, gave  newspaper publishers meeting in New York this week a real tough “shape up or ship out” message. “In order for your newspapers to be winning our advertising dollars, you need to be winning in the marketplace, and that's not currently the case," she warned the annual meeting of the Newspaper Association of America.

She laid it on the line. She and her colleagues are not happy with newspapers these days – declining circulation and the loss of the young means department stories have to look to national fashion magazines, the Internet, and TV far more than in the past, to reach those readers.

“The daily newspaper remains a very good tool for Macy's, that’s the good news. The problem is our customer is not picking up the newspaper as much as we would like … We need to make sure we are not spending more to get less. Macy’s is taking steps to increase [customer reach] and the efficiency of our spend. In this environment, newspapers will get left behind.”

She reminded publishers that Macy’s core audience are women aged 25 – 64. While she is not about to tell newspapers what news they should be printing she made clear that newspapers must appeal to that demographic or she is throwing her money away. And she pointed out that 30% of  business today comes from various minority groups such as African American, Hispanic or Asian. Whatever newspapers do to make their product attractive to that audience makes her advertising spend more meaningful.

Her own feeling is that people want to read local news in local newspapers and that newspapers should move that local news to the forefront. Local news, she said,“is your differentiation but that is not what someone sees.”

And she brought up the point that national advertisers have complained about for as long as there have been national advertisers – the difficulty in placing national ads. She believes the industry needs to coordinate national ad placement so a Macy’s doesn’t have to deal independently with each newspaper.

Given the Sony, Toyota and Macy’s examples, it’s not difficult to understand why print advertising revenues are taking such hard hits these days.


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