Era of Googlemania

Tim Ruder, Vice President, Marketing, Washingtonpost.com & Newsweek Interactive, USA

Paid search cannot replace traditional web advertising, Tim Ruder warns.

He fears the hype surrounding search engines could begin to resemble the false hope in the late 1990s that the Internet would turn the advertising industry upside down.

Mr Ruder welcomes “the era of Googlemania”. But he also says: “It would be a considerable mistake to think that paid search could replace traditional web advertising,” he says.

"Although Google’s initial impact was to create order where chaos reigned supreme, it’s more important impact may be how it has turned the promise of paid search into a very profitable reality.”

He says that Google pays to run links throughout the Washingtonpost.com site. He in turn spends on promoting his web site through Google searches.

And many online publishers, including Washingtonpost.com, have benefited from Google’s mastery of web search.

But online publishers with respected brands can still offer geographic specificity and the advantages of a trusted web site, Mr Ruder says.

Winning young readers

Pradeep Guha, President, Bennett Coleman & Co Ltd, publishers of The Times of India

It is a myth younger people don’t read newspapers, says Pradeep Guha.

Mr Guha points to the experience in India at his newspaper where the 15-34 age group constitutes 62 per cent of the readership.

“The Times of India has grown three times faster than the industry in this reader segment,” Mr Guha says.

“Ever alive to these demographics, we have shaped our strategies and product focus to remain youth-friendly - be it in layout, content or tonal quality,” he says.

One of the ways the 2.6 million-selling paper appeals to younger people is the use of headlines in Hinglish, a mix of English and Hindi.

Expanding East

Lutz Glandt, Managing Director, WAZ Group, Germany

The enlargement of the European Union will provide growth for publishers, says Lutz Glandt.

Faced with a declining market in its home country of Germany, the WAZ Group looked to its neighbours to expand, Mr Glandt said.

“The experience of the EU is a great opportunity for a company like ours that wants to grow,” Mr Glandt said.

WAZ, which is headquartered in the Ruhr, owns 38 newspapers and 108 magazines as well as interests in television, radio and the Internet. Its annual revenues are almost 2 billion euros and operates in nine different European countries.

With the backing of the owners, WAZ senior managers plotted a journey of expansion towards South-eastern Europe.

Tabloid is not a miracle cure

Ally Palmer, Director, Palmer Watson, Scotland

Just changing your format will not necessarily give you a better newspaper, says Ally Palmer.

“Does size matter? Well, maybe. But it’s not a miracle cure,” Mr Palmer says.

“It’s not simply about format,” he explains. “What we really need is newspapers that are more adventurously edited and better designed.”

Some broadsheets, like the New York Times or the Wall Street Journal, would not look right as tabloids, he suggests.

“You can’t pour the content of a broadsheet into a tabloid format,” he says.

Similarly, it’s impossible to imagine The Sun of London as a broadsheet.

Newspapers must improve their presentation by integrating design with the editorial process. There must be greater pre-planning and use of templates.

Compact pay-off

Terry Grote, Managing Director, Independent Newspapers, United Kingdom

The transformation into a tabloid of The Independent newspaper in London has led to double digit increases in its advertising rates, according to Terry Grote.

“We have signed up arrangements for a 16 per cent rate increase with eight out of the top ten media buying agencies in the UK,” Mr Grote says.

“That level of rate increase has never been seen in the UK national newspaper market,” he says.

“The concerns - that were many - about loss of volume and revenue when going from broadsheet to a tabloid have been more than covered by that level of rate increase.”

The change of format has led the paper to enjoy its highest sales since 1998 and the highest market share for seven years.

The age of Creative Man

Axel Olesen, Managing Director, Copenhagen Institute for Futures Studies, Denmark

The world has moved into a new era of “Creative Man”, and this demand for creativity and innovation can transform business, says Axel Olesen.

Mr Olesen says that in the age of Creative Man:
  People will have to be creative and innovative;
  Individualism will mean big brands are of low interest;
  Ideas are worth more than natural resources.

And thanks to technology, innovation will move from 99 per cent perspiration to 99 per cent inspiration.

In the media landscape, Mr Olesen points to four examples of Creative Man at work: the Metro commuter newspaper; the move from broadsheet to tabloid; public interest journalism; and reality television.

A necessary useful tool

Earl Wilkinson, Executive Director, International Newspaper Marketing Association, United States

Newspapers can buck the trend and increase their advertising and circulation sales, says Earl Wilkinson.

“The average newspaper spends less than 2 per cent of its revenues marketing itself,” Mr Wilkinson says.

“Our rivals in other media spend 400 per cent more. Companies who advertise in our pages spend even more than that,” he says.

It’s wrong to say growth can’t be had - it’s just that in many cases newspapers have never tried, he says.

It would be unrealistic to say that to spend more money on marketing will cure all ills.

“I believe the challenge facing newspapers - to be very blunt and to be very honest - is about overcoming cultural timidity, led by many of our editors and supported by many of our publishers," he says.

“We worship our daily work of art more than we try to make it a necessary useful tool,” he says.

Beware the big retailers

Caroline Foster Kenny, Managing Partner, Mediaedge: cia International, United Kingdom

Retailers are positioning themselves as the new kings of media, says Caroline Foster Kenny.

Advertising used to take the lion’s share of a marketing budget.

Now it has been displaced by online, outdoor, customer relationship management, ambient media, sponsorship, entertainment - and retail.

“Retail is the bigger winner of them,” Miss Foster Kenny says.

“These guys are going to be the biggest media barons of them all,” she says, citing the example of Wal-Mart’s desire to become the world’s biggest media owner in 10 years’ time.

Newspapers will have to innovate, evolve, create partnerships and, most importantly prove their value, to survive, she says.

The ‘always on’ media

Jim Chisholm, Strategy Advisor to the World Association of Newspapers, and Director of the Shaping the Future of the Newspaper project

Here are some forecasts for the future:

Mobile phones have created an “always on, everywhere” media, says Jim Chisholm.

“There is an intimacy with our media that was never there before,” he adds.

And, in that trend, a newspaper like Metro sees newspapers in places where they weren’t seen before.

Looking into the future, Mr Chisholm says the migration of classified advertising to the Internet is under way.

“It’s absolutely apparent in every market we looked at - and this will have an impact on profitability with the current model,” Mr Chisholm says.

Over the next 10 years will see total revenues at 89 per cent of their current levels.

Looking at net contribution to profit, Mr Chisholm says: “After you take out your costs to market, the amount of money you will have left to run your organisations and pay for your printing presses, journalists, electric lights and so on will fall from 59 per cent to 51 per cent.”

He expects significant restructuring to cope with this shortfall.

More from the Shaping the Future of the Newspaper project at www.futureofthenewspaper.com