How did newspapers make money anyway?

Formerly the bulk of newspaper revenues came from Classified Advertising with margins in the 80-85% range. Biggest income producers were Help Wanted (especially those ads aimed at "Executives and Professional." Now and others have reached a far broader readership, with an easier search protocol, and the ability to submit resumes electronically.

Two other big money makers were Real Estate (private home sales, home rentals, and apartment rentals (really big in urban markets)), and Automobiles (mostly used). Once again the net won out by incorporating 360 degree filmed shots of all rooms in a home/apartment - readers no longer had to trust in veracity of copywriter (me). Use of pictures for autos on web was a big reason for shift - again a picture was a better sales tool than words. But a newspaper ad with a pix cost way too much

General/National advertising (Ford/MacDonalds/Proctor & Gamble/Nike, etc) were big income producers but split their "buys" and had already begun to move more into TV — local dealers/retailers/food marts/electronic stores, though, spent tons - moved some of that to the web also.

Absolutely huge dollars and margins in political and/or issue advertising — especially campaign ads. Definitely paid the highest rates with NO discounts for frequency of ads or number of appearances.

Retail advertising was very competitive and, consequently, margins were much smaller; many of these advertisers switched some of their advertising to the web but few switched it all.

The big money makers in newspapers remain those in smaller markets with lots of elections and, ideally, without a nearby Wal-Mart. Generally, most smaller towns are one-paper markets and rates are set to insure generous margins (Gannett owned very many of these and they add substantially to the bottom line). However, consumers of local papers like to see bylines by local people — and they demand that coverage be provided for most civic events that big papers would normally ignore (so if the publisher gets too pricey or too indifferent to local events, the staff hears about it, and advertisers act on it). Locals are also are very interested in coverage of high school activities (football, band, and cheerleading are huge.

Political advertising for every office from the Prez down to county Animal Control Officer bring in dollars — local radio gets very little of any as most stations have limited reach and few committed advertisers.


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