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Black & White & Red Ink All Over
Daily newspapers take a hit as classified advertising dollars - and, in many cases, newsrooms - shrink
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Business New Haven
9/01/2003
By: Melissa Nicefaro
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If you’re looking for a job these days, just where do you start? Up until about five years ago, the local Sunday newspaper was the be-all and end-all of the job hunt. It didn’t much matter what profession you were looking for a job in, there were pages and pages of help-wanted advertisements for decent local jobs.
Now a job-seeker picks up the Sunday paper’s help-wanted section and wonders if she didn’t get Monday’s skinny edition by mistake. The August 23 New Haven Register, for example, had just four pages of job listings.
If fingers must be pointed (and inside the sales departments of Connecticut’s dwindling number of newspaper companies, they certainly are), there is no lack of culprits: fewer companies hiring fewer workers (in July alone, Connecticut employers shed 12,100 jobs); tighter budgets for help-wanted advertising regardless of hiring situation; and fierce competition from Internet job databases.
While many dailies are holding their own on the display advertising front, classified advertising is a different story. Given the rise of eBay, online real-estate listings and Internet job boards (see related story, page 14), classified advertising may soon be a marketplace that newspapers, with their always-rising costs of newsprint and ink, can no longer afford to be in.
Connecticut’s oldest newspaper, the Hartford Courant, is certainly feeling the affects of downward spiraling ad revenues.
Explains Courant Publisher Jack W. Davis Jr.: "The national economy has been slower than expected, and our local economy has been more sluggish. This has impacted the Courant and many other newspaper organizations with a significant falloff in revenue attributed mainly to declines in recruitment advertising, commercial printing and a generally soft retail market."
According to Davis, the Courant has responded to this adverse business environment by "flattening the organizational structure, managing employment levels and reducing expenses while maintaining our traditions of strong local news, information and editorial leadership." In other words, cutting jobs and slashing budgets.
In this, of course, the Hartford daily is hardly alone. The Courant is owned by the Chicago-based Tribune Co., a $5.5 billion behemoth that is one of the world’s largest multi-media companies.
Following its merger with Times Mirror in 2000, Tribune boasts such national newspaper names as Newsday and the nation’s largest metro daily, the Los Angeles Times. It owns Chicago superstation WGN-TV. It even owns the Major League Baseball’s Chicago Cubs.
Locally, Tribune also owns the Stamford Advocate, Greenwich Time, the Advocate alt-weekly newspaper chain and television stations WTIC-TV and WTXX-TV.
The Hartford Courant publishes ten regional editions. It also creates ValuMail coupon packages.
At the end of July, the Courant announced intentions to eliminate the jobs of 23 employees, "nearly all through layoffs — as the paper continues to struggle with a "significant decline in revenue," Publisher Davis said in a Courant article announcing the layoffs.
Davis had reportedly been optimistic late last year when he told employees that "The economy would rebound and allow the paper to get through 2003 without drastic cost-cutting," the Courant article said. "But in a company-wide e-mail, [Davis] said the lingering downturn had made layoffs ‘necessary to sustain the financial health of the Courant.’"
The story quoted Davis: "As you know, the national recovery has been slower than expected and our local economy has been even more sluggish — as indicated by the state budget crisis and continuing job losses in our market."
None of the layoffs were to come from the news department, although the size of the news-gathering staff would shrink through attrition, according to the paper. As quoted in the Courant article, editor Brian Toolan said the reductions would be manageable and would not affect the quality of the paper.
The Courant has laid off or eliminated the positions of more than 50 employees since 2000.
According to the I Want Media Web site (iwantmedia.com) — which began a tabulation of U.S. media layoffs after the beginnings of the dot.com bust in mid-2000 — some 70,000 media jobs have been lost nationwide since June 2000.
The research organization says media companies in general are continuing to tighten their belts and cut jobs. Many if not most cutbacks are attributable to the slowing economy and advertising market, disappointing results at online units, and restructurings in the aftermath of mergers.
Daily newspapers are among the hardest hit by tightening advertising budgets.
The story is in the numbers.
Total dollars spent on U.S. newspaper advertising dropped 9.4 percent between 1992 and 2002, according to the Newspaper Association of America (NAA). Between 2000 and 2002, total newspaper ad sales fell 43.9 percent (see accompanying chart), but classified ads were even harder hit, plummeting 47.7 percent.
Employment classifieds were hardest hit by a 49.8 percent decrease in sales, plunging from $8.7 billion in 2000 to $4.4 billion in 2002. Real estate advertising fell 15.5 percent and automotive advertising fell 2.5 percent over the two-year span.
Of the $44.1 billion spent nationally on newspaper advertising during 2002, $21 billion (47.6 percent) was spent by retailers. Classified ads accounted for $15.9 billion, or 36.1 percent of the market and national advertisements made up the remaining $7.2 billion (16.3 percent).
For the first six months of 2003, total newspaper ad spending rose 1.7 percent to $20.9 billion, with national ad spending up 8.4 percent, retail up 2.1 percent, and classified down another 2.2 percent.
On Sargent Drive, sales executives at the New Haven Register, so-called flagship of the Trenton, N.J.-based Journal Register Co. (JRC), are likewise feeling the heat.
On August 19, the company announced that classified employment advertising revenues for its most recent five-week period ended August 3 were down a whopping 9.5 percent over the same period of 2002.
That decline is more dramatic in the context of an overall classified revenue increase of 8.3 percent for the same period at the Register, the state’s second-largest daily in terms of average circulation. That increase was led by hikes in classified real-estate advertising and classified automobile ad revenues, spiked in part by the May introduction of a new Friday automotive feature section.
Companywide, the decline in classified help-wanted revenues at all JRC papers: down 11.1 percent for the five-week period ending August 3 over the same period in 2002. That reflects, says the company, "continued softness in the employment market."
Earlier in the year, the JRC reported a decline companywide of 1.2 percent in classified revenues from all categories during the second calendar quarter of 2003 over the same period a year ago. However, classified employment revenues alone plunged 15.7 percent over the same period.
The company, which owns 23 dailies and more than 200 non-dailies, acknowledged "continued weakness in classified employment advertising revenues."
If not for strength in automotive and real-estate classifieds, it would have an even greater bloodbath in the back-pages agate type at the Register.
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