Major Accounts Make Major Mistakes

Pete VanBaalen General Manager The Elkhart Truth
Pete VanBaalen
General Manager
Fort Wayne Newspapers

By Pete Van Baalen
Fort Wayne Newspapers

If you’ve worked in an advertising department of a newspaper, you’ve either had this phone call or know someone that has. It’s a major account or their agency, and they are calling to discuss their preprint schedule for the coming year. These calls rarely end with a positive outcome.

Major advertisers and their agencies have been on the attack for the better part of the last decade, and the result for newspapers has been bad. Advertisers have dramatically reduced their quantities, frequency and rate.

While the financial impact for the newspaper industry has been well documented, the impact on those advertisers has been largely glossed over and rarely discussed. But not here, and not now.

The comments and the stories are out there, but they don’t gain as much traction as the negative stories. In recent memory, I can think of several major national retailers report that sales lagged at their stores after cutting newspaper insert programs. Those same retailers announce to Wall Street and their stockholders that one of their strategies to improve sales is to increase frequency of inserts in local newspapers.

The latest to make this confession was Stein Mart. Their CEO, Dawn Robertson, resigned amid less than expected sales results. Stein Mart’s director of investor relations, when asked about what missteps were made by the company, stated in an article from The Florida Times-Union  “The most impactful was a change in the marketing mix. We shifted spending from newspapers to television, which didn’t have the result we wanted.”

Very bold statement, but that isn’t the first time this has been cited by major accounts in recent memory. Ad Age ran a story in May with similar tones, with major retailer Kohl’s experience some of those same issues.

Facing a nearly 4% decline in same store sales, Kohl’s decided to return to a more aggressive insert program. As many of us know, they cut back that program and their customers responded by not responding! “There are definitely some company-specific issues from a marketing perspective that we’re working on rectifying, so we know that affected our first quarter,” said Wesley McDonald, chief financial officer.

Long time retailer JC Penney nearly went out of business a few years ago when they ended their newspaper insert program and discounting. Penney’s eliminated newspaper advertising and focused on branding through television and direct mail. The results were horrific! In an Ad Age article after their relaunch of traditional media with about 30 newspaper inserts, they discuss what went wrong. Then CEO Ron Johnson said, “Clearly, our new marketing, our new message is getting through. We have more traffic in our stores. People are buying more, and we’re encouraged by that .”

Newspapers should be encouraged by the stories of JC Penney, Kohl’s, Stein Mart and more. A consistent advertising program in newspapers still works, still drives traffic and still provides a good ROI (return on investment) for the advertiser. The beat downs from accounts have made us forget the results provided by our products.

But that next call doesn’t have to leave you on the defensive. Stand firm on the results, and maybe even site the examples discussed here. Stay firm on rate; after all not every paper in the country has the highest rate like they will suggest! And remember the role of newspapers in a media mix.

Using a newspapers as a part of your marketing and media mix triples the effectiveness of the advertising campaign. This is something we’ve all known for years, but have perhaps forgotten after all the negativity we’ve seen regarding our industry.

Pete Van Baalen, general manager for Fort Wayne Newspapers, is a member of the HSPA board of directors and president of Indiana Newspaper Advertising Executives Association.