GOING FOR GROWTH, PAPERS TRY MANY NEW PRODUCTS

From addressing reader issues with new sections to trying new sales tricks, ideas flow

Newspaper companies were busy this spring, sowing the seeds of future profits by casting dozens of new products across the fields of declining readership.

The tender shoots of new automotive, health, home and technology sections are among those being nurtured as newspapers tried to deal with stagnated growth.

In Tampa, a weekly sports section is delivered to only 75,000 of the paper's 250,000 subscribers. In Duluth, a new total market coverage product is mailed to nonsubscribers. In New York and Baltimore, new technology sections are taking hold. In Los Angeles, it's new health and automotive sections. And the list goes on.

Why the sudden surge in new products?

"It is quite simple," says William Bird, a newspaper analyst with Salomon Smith Barney of New York. "Leading national retail ad spending grew by 16 percent, but newspapers grew income by only five percent."

That 11-point disparity has caught the attention of publishers nationwide, and they are scrambling to find ways to address the issue. What newspaper executives are hearing is that they need to offer a way to reach the readers that advertisers want.

Or, as Bill Wilson, director of target marketing for Miami's Knight Ridder puts it, "Mass (marketing) no longer does it. You have to target."

"The industry is becoming more sophisticated in the way it serves readers and advertisers," says Bob BRISCo, senior vice president of advertising and marketing, and new business development, for the Los Angeles Times. "And the reason that is happening is competition is becoming ever more fierce. The reader continues to be hit with a proliferation of targeted information sources, and papers respond by becoming ever more targeted."

These information sources include cable and TV with more channels, the Internet with more sites, and magazines with ever more precise niches -- all of which take time, readers and ad dollars away from newspapers.

Publishers, Bird says, are seeing in abundance what is happening in the advertising market: "In a proliferating media market where things are fractured, newspaper market share has dropped."

THE DEVIL RAYS MADE THEM DO IT
The Tampa Tribune is fighting for market share with a series of products, including a targeted weekend sports tab launched just before Major League Baseball's inaugural Tampa Bay Devil Rays game this year.

Donna Reed, deputy managing editor at the Tribune, says it is the paper's most aggressive product as it pursues niche markets. "It's not just for sports junkies. We have been able to cover types of sports that would not make it in the daily paper," Reed says. "It has stories on local and national personalities, and is not just sports, but leisure driven."

The Tribune has done some nontraditional things to help focus the section. It has its own staff, including ad reps. They have their own little corner carved out of the sports department area where reporters, salespeople and the rest of the section staff all work.

"We deliver it to 75,000 of our subscribers," Reed says, "and they pretty much have to ask for it." Reed says this allows the paper to guarantee a certain type of readership for the advertisers as well as to tailor the product for the readers.

Tribune subscribers who do not ask for the section may get it anyway, but only if they live in a ZIP code whose demographics fit that targeted by the section, or if they are season ticket holders for one of the local sports teams with which the Tribune has a sponsorship agreement.

"There's no additional cost to the reader; it's an added value," says Michael Kilgore, the paper's marketing communications director. "The 75,000 circulation lets us offer more news to people who want it, and make advertising affordable."

Although quite pleased with the start-up, Kilgore cautions that it is too early to know if the section actually is successful. One key, he says, will be making it through the summer doldrums and then seeing if it has staying power.

The Tribune is not depending on just sports for future growth, having cast dozens of other seeds across its market. Sprouting are:

• Payday Tampa Bay, a free help-wanted/ employment publication started recently, building on the Tribune's strength in classified.

• An additional 11/2 pages devoted to arts coverage daily, beginning on the back of Baylife and jumping inside. The position allows full color daily, as well as anchoring the section where it can be easily found.
• Revamped home and entertainment sections on the weekend.

One successful special product is a four-page wrap-around keyed to a concert or other special event that is sold outside the event. Three pages are devoted to the event; the fourth is a full-page ad.

"It gives advertisers and distributors a way to hit another market," Kilgore says, "while giving circulation an additional tool." Using the wrap, he says, the Tribune recently sold 12,700 copies of a Friday morning paper at 11:30 p.m. as concert-goers left a George Strait concert.

CLASSIFIED NICHES
That sort of broad attack for new readers has become popular across the country, with classified often leading the way. One of the pioneers was The Times-Picayune in New Orleans, where untraditional uses of classified have become a traditional way of doing business.

"Newspapers have to look for the nontraditional classified reader," says Joanne Chaisson, classified ad manager at The Times-Picayune. "You need to combo an ad so that during the schedule it runs outside classified, and that's an advantage for the advertiser."

The Times-Picayune was forced into doing many unconventional things in the early '80s as the bottom fell out of the oil market, and readers and advertisers started leaving in droves.

"We started with running business-to-business classifieds once a week in the business section of the paper," Chaisson says. "Now we have Information Highway, computer-related ads that run in classified -- but on Tuesdays, we bring them into the business section to capture the business reader."

Chaisson also has a getaway guide, a group of travel-related ads, that runs in the Travel section. A section of floral ads runs daily on the obit page.

"We have to make it easy for the reader and we can't make it hard to buy," Chaisson says. "If it benefits the reader, then it benefits the advertiser, and that's good for the paper."

Help wanted publications are proving popular elsewhere in the country as the surging economy and bull market have led to record employment levels. The Chicago Tribune has several new products in that field, including JobFinder, a weekly free publication, and Silicon Prairie, a stand-alone mailed to 25,000 high-tech professionals. The products include sections on writing resumés, worklife issues, grammar and other things that go beyond the standard help wanted ad.

They also are targeted at certain markets.

"We're getting more sophisticated in database marketing," says Kelly Shannon of the Tribune's marketing staff. "We do recruitment at high-tech job fairs and got some names there, and Job Finder was aimed at blue- and pink-collar workers, ads that had been priced out of the paper."

Jane Migely, classified advertising director at the Chicago Tribune, says the continued fragmentation of the market led to the new products.

"We've been putting out niche publications for a while with Autofinder, Nursing News and an apartment guide," Migely says. "But it's the world. We're all falling into these little niches and we (newspapers) are trying to serve everybody."

The Tribune is trying to capture new markets with its products, Migely says, while going deeper into its existing segments. Other products rolled out in Chicago include a stand-alone golf guide, a section for baby-boomers, and sections on retirement and assisted-living homes.

CIRCUIT CITY
Technology has been a major focus of the new products, whether it's in high-tech help wanted sections, Internet outposts or, in the case of The Sun of Baltimore and the New York Times, new sections focusing on technology.

On April 20, The Sun rolled out Plugged In, a personal technology section, that addressed a hole in its lineup. "Newspapers are looking for new sources of revenue or to derive more revenue from the existing customer base. A technology section is a good way to do that," says Mike Himowitz, editor of the section. "Newspapers feel there is an untapped market and they can appeal to readers that are technologically oriented."

The Sun put together a tactical team to look for revenue sources. The team included people from the newsroom, production, advertising and circulation, and came up with the idea for Plugged In. Like many newspapers, The Sun covered the business of technology, but did little with the consumer side of it.

"This is a personal technology section," Himowitz says. "It has stories that are entertaining and serious -- and about how technology affects people. It has stories about software for girls, because people have figured out that girls are out there and they will use computers. It has stories on prosecutors using Powerpoint [Microsoft's presentation software] and about biometrics."

So far, Himowitz says, the section is exceeding expectations for advertising.

Like other papers, The Sun is not limiting itself to just one new section in a bid to attract readers and increase revenue. Three Sunday sections were redesigned recently, and the classified section is being redone.

Circuits, the new technology section in the New York Times, is quite similar to that of The Sun. Unlike Baltimore, the Times already covered consumer technology, in its Monday business section and in Science Times. The Times thought the section was worth doing anyway.

"We thought there was a clear, compelling journalistic and reader need for this," says Scott Heekin-Canedy, Times vice president of planning. "The marketplace has been rapidly moving in a consumer direction and the advertising has gone with it."

Although the technology boom has been a boon for new products, there have been few cases where changes in newspaper technology has spawned new products. The Times is one of the few exceptions.

When the Times turned on its new printing plant in suburban Queens and turned off the presses in Times Square, the paper made some major changes. It went to a six-section design and redid many of the sections, Heekin-Canedy says.

The change in the presses also allowed the newsroom to form a special projects group that produces monthly themed sections. These have included pages on women's health, teens and adventure sports, all with high reader and advertiser interest.

Heekin-Canedy says the group's philosophy "is to focus on groups for the reader audience and advertising base. We could not do these before because we didn't have the production capacity."

That special sections are sprouting all over is not a surprise to Salomon Smith Barney's Bird. "It is largely a function of the maturity of the industry. Companies are looking for more creative ways to sustain growth," Bird says. "These special sections have been fairly profitable incremental revenue streams."

Some of these sections are born when people look more closely at their markets, according to Knight Ridder's Wilson. "People are looking at an audience that they have on a scope and then looking at the components and then looking at nonsubscribers," Wilson says. The idea is that they can come up with products to put in front of nonsubscribers.

Newspapers need to combat the negative growth of the marketplace, Wilson says, and targeting is one of the best ways to do that. At Knight Ridder, the properties are charged with growing revenue. It's hard to raise rates if circulation is flat, so targeted sections are a good alternative.

Reed, of the Tampa Tribune, says many of the changes come from responding to readers. "We have to listen to what people say they wanted in order to keep the readers we have and attract the ones we don't."

And a final reason for the surge in sections comes from Mary Ann Winter, an analyst with Brown Brothers Harriman.

"Papers seem to do this," she says, "when they are flush and have a little extra money to experiment."

-- Steven E. Brier

From NEWSINC., June 22, 1998, Copyright © 1998, All Rights Reserved.