In order for newspapers to ensure that they can forge long-term, sustainable success, they must make five fundamental changes in how they go to market:

  1. Change the culture, which is key to successful change.
  2. Switch to simpler, systematic pricing and sales practices.
  3. Convert to compact format.
  4. Rethink the publishing cycle.
  5. Harness the power of technology – in print, digital and mobile platforms.

In our previous blog, we focused on changing the culture. Now, let’s visit how one can leverage Pricing & Sales Practices for long-term sustainable success.

For more than a century, newspapers were the dominant advertising (and information) medium and were able to influence the advertising buying process and basically set the sales agenda. That influence started disappearing about five to 10 years ago.

Since then newspapers have been forced into a strange relationship where almost all rates are negotiated or set by the advertisers – “take it or leave it.” It almost appears that there are as many rate plans as there are advertisers.

In order to produce revenue, even at a greatly diminished pace, newspapers started accepting almost all propositions from advertisers and their agencies, assuming that if the resulting revenue covered the variable costs of paper and ink, the bottom line would be protected.

Newspaper sales activities now resemble what takes place in Turkish rug bazaars – haggling, price concessions and discounts – all justified based on marginal costs. This “marginal cost” thinking is what Christensen believes is holding back newspapers’ ability to fix the core business.

Lately, numerous newspaper executives, notably Kirk Davis, COO of GateHouse Media, have urged the industry to regain control of pricing and to reinstate integrity, discipline and a simpler, systematic approach to advertising sales. Current practices cannot sustain newspapers in the future, because operating margins are shrinking even faster than revenues are falling.

Many newspapers are finding success with simpler pricing practices built on modular ad units; standardized sales approaches; innovative frequency packages, and smarter ways to buy and sell.

Look to our next blog for Format Conversion.


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