Cars, Homes and Jobs: Getting Ready for the 2009 Stimulus
Important Details: With recession now official in the US and parts of the Eurozone, it may be a good time for news publishers to begin focusing on the next “R” word: Recovery. While that may seem premature, there’s more than the usual good planning reasons to get ready for a consumer recovery. As 2009 dawns, we’re about to experience the largest stimulus packages ever passed by national governments, with the UK’s topping $30 billion, while the US total has been talked about at up to $500 billion. While some of the funding will go to infrastructure building, much of those stimulus packages are intended to get consumers spending. Revived consumer spending, of course, will mean revived advertising spending. That revival can’t happen a month too soon for the newspaper market.
Just this week, the Newspaper Association of America (NAA) released its report on the dismal third quarter. The stark numbers:
- Overall (print and online) newspaper advertising revenue dropped 18% year-over-year. That is the worst loss by far in the nearly 40 years NAA has kept statistics.
- Classified revenue was off almost 31%. Recruitment declined 43.6% in the quarter, real estate lost 38.6%; and automotive took a hit of 29.2%.
- Online revenue declined year on year for the first time since NAA has broken out those numbers, losing 3%.
But let’s connect those awful numbers to the stimulus plan. Three areas expected to be targeted by the stimulus plans conveniently align with those three top classified categories:
- Job Creation: The Obama Administration-in-waiting has already pledged to create 2.5 million new jobs by the end of 2010.
- Real Estate Movement: There’s widespread agreement that failure to deal with the foreclosure roots of the financial meltdown has been a drag on recovery. Any stimulus will also target reviving a more normal real estate/properties market.
- Auto Sales: Congress is likely to help the Big Three US companies pump up car sales in 2009. In 2008, those sales will drop to about 11 million down from a high of 18 million.
News publishers couldn’t ask for a better spur to their own ad growth. Add in anticipated boosts in consumer spending overall — think retail — and publishers can grasp a bit of hope for 2009, especially in the second half of the year.
Implications: Hope, though, isn’t a strategy. Outsell believes that in these days of gloom and doom, news publishers should be ramping up efforts to be ready for the stimulus packages. Any renewed spending won’t drop easily into publishers’ pockets — there’s too much competition from internet and other newer, often more trackable forms of advertising and marketing, as documented in Outsell’s Annual Advertising and Marketing Study (July 14, 2008).
Outsell believes publishers should form go-to-market, cross-functional task forces to get ready for the recovery to come, focusing on two key areas:
- Ad Sales: 2008, as painful as it has been, has been a year of transformation for newspaper sales staffs. In the US, many are now focusing dramatically on online-only sales, as classified bundled online revenues have been the culprit taking the online growth number negative at a number of companies. Now, on that foundation, publishers must be ready with innovative programs and flexible pricing to grab a greater share of new jobs/cars/real estate dollars as they flow back into the marketplace. Offering marketers more tools — including video, databased maps, mapping, mobile services, etc. — will help in the emerging lead gen-oriented world. Promotional offers that make sites and their newspapers the logical place for local marketers to spend should be prepared and tested.
- Online Product Readiness: In those three “classified” areas, many newspaper publishers have abdicated the local customer experience to their national network classified provider, whether a Classified Ventures, a Monster, a Career Builder or others. It’s essential that local news sites make themselves the consumers’ new best friend, offering the best content, the best interactivity, and the best social tools in what will be a nervous time for consumers. Consumers have never needed a trusted local friend more, and traditional news companies have a great chance of re-establishing their local essentiality. That, as with advertising, will require a fuller and smarter embrace of new tools. In fact, we can point to such 2008 innovations as Gannett‘s MomsLikeMe network, as the kind of focused niche site that could be a model (see our August 2008 report, News Publishers Have Moms in Their Sites). Imagine new, or renewed CarBuyers, Job Seekers, HouseFinders sites that embrace community, sharing, multimedia — and news and tips. That could be a winning ticket, emerging out of a losing year.