Coming: The Newspaper Recovery Classified Stimulus Act of 2009
We've seen lots of wry, earnest and soul-searching comments about whether newspapers should get in line for federal bailouts, since all other pillars of society seem to be stretching their hands out.
Most, I think, are missing the point. The bailout is on the way. Thankfully, it's not coming in the form of direct federal payment to newspapers. It's coming in the largest stimulus package in US history. $100 billion, are you kidding? $300 billion? How about $500 or $700 billion? That stimulus, combined with other economic recovery programs, gives newspaper companies a new shot at getting some growth in 2009.
We could even think of it as the Newspaper Recovery Classified Stimulus Act of 2009.
Think about it. What are three top sectors targeted by the NRCSA?
- Jobs! So far, President-Elect Obama has pledged 2.5 million new jobs by the end of 2010. That might make up for the jobs lost in 2008-2009.
- Cars! As the Big Three make their case, Congress will find a way to shoot them money. Yes, we know that bankruptcy beckons if loan money doesn't prop up the companies in the next several months. The big problem though is car sales, which have plummeted to about 11 million a year from a high of 18 million. However, the car makers and Obama's new economic team work it through, the clear goal is to sell more cars more quickly.
- Houses and Condos! The least best-kept secret of the recovery attempts has been their failure to deal with the underlying problem, foreclosure. Obama's people know that until the foreclosure river is staunched, there's little hope of returning to a more normal real estate market. Mortgage interest rates are coming down, but key to any recovery/stimulus plan is restoring real estate values, incenting buyers to mate with all those sellers.
Jobs, cars, houses and condos. Those are what used to be the backbone of newspaper profits — code name "classifieds — until each of those markets got pecked away at by Internet competition and then chomped whole by the recession. Recall the NAA 3Q numbers: classified revenue was off almost 31%, with recruitment down 43.6% in the quarter, real estate down 38.6%; and automotive down 29.2%.
One key question as those real estate, recruitment and auto markets recover — whenever they recover — is how much of their related ad dollars will return to newspaper companies. How many will return to print? How many will return to online?
If the return number is 90%, we'd see rejoicing. If it's closer to 70%, we'd see how today's cutbacks in staff, newsprint and even days of "daily" publication were intended to anticipate permanent advertising decline.
As we stand on the precipice of national, global and newspaper economic disaster, news companies need to do more than pray and hope. What I'd like to see them do is muster the new energy to anticipate the recovery now, before we see any sign of it, in hopes of grabbing a bigger piece of it and reviving their businesses and newsrooms.
Yes, it's tough to energize the troops and their managers as layoff notices plaster the doors, but the companies really have little choice. Recall the pivotal political moment of the Presidential race. Economic meltdown was becoming apparent, and John McCain halted his campaign, in a vain effort to provide leadership in fighting it. Barack Obama kept campaigning, incorporating the meltdown/recession in his thinking and in his campaign, and famously said that presidents have to be able to do more than one thing at a time.
That is the state of newspapers today. They must fight fires and fight for their future. Of course, they are doing that, some better than others.
I'd suggest that as the stimulus — sure to be passed by Feb. 1, not far off — becomes a reality, newspapers take clear steps to mobilize their staffs to take full advantage of it. That means focusing on the two areas that will distinguish all media companies going forward, product and sales.
- Product: Americans aren't terrified, but they are shell-shocked. They need help as consumers, as parents, as employees, as job seekers. That's an unprecedented opportunity for American newspapers to become more essential in their lives, mostly online and somewhat in print. Think Green Tech jobs, just as an example. Americans will be hearing lots about those, come January, but don't know what that term really means. Certainly, good analytic stories will help, but what will make a difference in essentiality and consumer use is news-you-can-use journalism. Think of each local news operation hosting a local Green Tech Central. Identify Green Tech companies in your area. Note what kinds of people work at them. Who is hiring, for what kind of skills? What kinds of skills translate to those skills? Where can I get those skills — quickly? Which leads us to education, and retraining, a key part of this economic transition. How about a Retraining Central, incorporating similar ideas. On the web, such a public service can be about lots more than text stories. Think videos and instructional videos (Apple's QuickTips are a short-form masterpiece, here) and interviews. Think interactive quizzes and databases that use the power of the web. Think blogs from those in the economic fray, talking to their fellow citizens, on recovery strategies. Sure, even throw in a little Zillow-like Zestimator shtick, as useful and addictive.
You get the drift: use the web to both reclaim newspaper's central community role — especially, but not only — in times of crisis and to win loyal customers. The Tech Central idea can be applied, with differing nuances of course, to cars, real estate and many other jobs areas. Tech Central isn't a let's-take-advantage-of-all-this-Green-talk, with a single local/wire page a week. It is a new commitment and a chance to find new footing on shaky ground.
- Sales: Arguably, 2008 has been a watershed year for newspapers as some have managed to show online revenue growth, even as bundled classified sales hurt everyone's numbers. Those — McClatchy, Hearst, New York Times, come to mind — have been aggressively pursuing online-only sales. The Recovery offers local marketers unprecedented opportunity to gain and regain market share. Realtors, mortgage brokers, car dealers, builders and employers generally will be looking to the web to re-start their businesses. For local news sites, that means putting their online-only re-toolings into hyperdrive. Yes, it's about retrained staff. But, it's also about innovative ad products — how can Yahoo's APT (and for Gannett, AOL's Platform A) power such products — and flexible sales and marketing programs. As with more interactive products, as above, marketers want more ways to reach customers. Newspaper sites must offer them. Newspapers may need to get more flexible on pricing, moving to add more than CPM deals, and share some more of risk and reward, with more innovative CPA-like, lead-gen arrangements. Print plays a role, here, as special Recovery-oriented sections — written as highly useful editorial, not advertorial — become must-reads and circulated beyond paid circulation.
We've laughed, amid the recent pain, that the wider global economic meltdown has to some degree sheltered newspapers, which are now only a part of it. Laugh, or cry, the business of 2009 is to meet unprecedented times with unprecedented efforts.
