Never write a headline longer than...

In 16 pages of self-evident mumbo-jumbo, a new study says future journalists should be taught to be ethical, objective, analytical, thorough, knowledgeable, and, perhaps, to speak a foreign language or two.

There's s still no math requirement, which, candidly, was a big selling point when I decided to major in journalism.

Like any consulting report worth its salt, the analysis by McKinsey & Co. for the Carnegie Foundation recommends further study. Accordingly, the pro-bono report climaxes by encouraging “journalism deans to undertake a bold effort to reshape and reinvigorate the quality of education that journalism schools offer."

Busy educators don't have to spend a lot of time boldly reshaping and reinvigorating themselves. All they have to do is spend an hour teaching their students the following seven highly perceptive quotations.

They worked just fine for me, and I'm boldly shaped, if not altogether invigorated.

:: “A newspaper’s job is to set the agenda,” said Howard M. Ziff, who taught me at the University of Illinois after a solid career as a reporter and editor in Chicago. By that, Howie meant a news organization’s job was to figure out the important stuff, ask the tough questions, dig up the answers and publish them.

:: “If your mother says she loves you, check it out,” advised Arnold A. Dornfeld, the legendary night city editor of the City News Bureau of Chicago. In requiring every rookie reporter to call his or her mother to confirm whether she indeed loved the aspiring journalist, Dornie emphasized the importance of getting the facts and getting them right.

:: “If you don’t know the lead, ask yourself, ‘What will happen next?’” This is another one from Howie Ziff, whose advice is more meaningful than ever for newspapers, which look like klutzes when they repackage day-old news broken originally by CNN, radio and the Internet. Howie’s quote emphasizes the obligation of a news organization, especially a newspaper, to penetrate a development by examining its causes, significance and consequences.

:: “Never let the facts get in the way of a story.” This quote has been around so long that no one can say who authored it, but I heard it first from Harlan Draeger, a now-retired Chicago newspaperman. “Every good story has to be told like a story,” said Harlan. “There has to be a beginning, a middle and an end. There have to be good guys and bad guys.” A superb reporter and elegant writer, Harlan always got the facts into his stories. They just didn’t get in the way.

:: “Kill your darlings,” advised the late Gene Graham, a Pulitzer Prize-winning journalist who later became a professor at the University of Illinois. In so saying, Gene was arguing for clear reporting and concise writing that puts the priority on informing readers, not flaunting the rhetorical aerobatics of a self-indulgent writer.

:: “Never write a headline longer than a newsboy can shout,” growled the late Bill Rising on my very first night at the copydesk of the Chicago Daily News. That was one of two pieces of unsolicited advice from Bill. The other, offered in more colorful colloquial language than will be employed here, was not to engage in intimate romantic relationships with female co-workers. Bill’s point on headlines, which works equally well for websites, graphics, video and other media, is that well-conceived, uncluttered communication works best. His second admonition, which I followed far more consistently than the first, is well taken, too.

:: “Always put the tits above the fold,” thundered Al Neuharth to the editors assembling one of the earliest editions of USA Today. Al, who back then was CEO of Gannett, showed up in the newsroom every night to kibitz when the first edition came off the press. When the page-one picture of a female cheerleading team was positioned too low for Al's taste, he ordered the paper to be remade in conformance with the above-stated principle. His point, of course, was that good marketing never hurt the financial health of a news organization.

Al also is the guy who observed that “only cream and SOBs rise to the top.” We'll save that tip for a future discussion of media-management skills.

We all scream for more screens

“Screens, screens, screens,” screamed a top advertising executive to a bunch of publishers in New York.

"Pay particular attention to the explosion of wireless devices and DVRs, the growth of on-demand and the saturation of broadband,” advised Renetta McCann, the prescient chief executive of Starcom MediaVest Group. “We believe that consumers [in the future] will engage with content primarily through these screens."

It’s not about high-tech but about personalization, Renetta told the International Federation of Periodical and Press World Magazine Congress, as reported by Advertising Age.

"In the long term, you're going to have to figure out how to give magazines more of a screen-based entry point for consumers," she said. "Can your food editors present one-minute recipes or cooking tips? Can your health experts create one-minute relaxation or exercise programs?"

Good questions.

Brooking no further babble

Citizen Journalism 1.0 isn’t working very well and it’s high time we admit it.

For all the excitement that has attended the debut of several audience-participation websites, most of the open-tsoris efforts undertaken to date are too inconsequential, too scattered, too opinionated and/or too poorly edited to be worth the time it takes to puzzle them out.

They are making a hash of what theoretically could be a good idea. If they can be fixed, let’s get on with it. If they can’t, then perhaps we need to move on to Plan B. Whatever that is.

The thing that gripes me about the proliferation of group-grope projects like Bluffton Today, Now Public and similar undertakings is that they take up space, take up time and add very little value for the trouble. Topics range from the narcissistic to the inane to the objectionable.

In the former category, self-absorbed ramblings about the ups, downs and ins and outs of blogging are the most popular fare.

B-o-r-i-n-g.

In the second case, how many more pictures of new babies and puppies can we take? When will people realize that life is not a series of Kodak moments? Enjoy your babies and puppies, bless them all, and leave the rest of us alone.

As for the third category, things got so ugly at the Ventura County Star that the newspaper last week shut down its public-comment site when remarks about race and immigration “quickly went off the mark and over the line” in spite of efforts by editors to delete the most virulent of them.

The experience “showed the unfortunate underbelly of the Internet,” wrote the chagrined John Moore of the Star. “The anonymity offered by the Internet on comments like this seems to encourage people to say the meanest, ugliest things about other people."

UPDATE: The Star now has reinstituted public comments with a number of restrictions, incuding filters to remove a growing dictionary of offensive words. Earlier the paper said it would permit comments only if it didn't"require us to hire a full-time babysitter.”

That's a worthy goal, but almost any open-forum site worth visiting will require a babysitter, ringmaster, traffic cop or editor to bring order to the inevitable chaos.

The value of a skilled interlocutor is proven emphatically in such efforts as Northwest Voice and Backfence. Thanks to careful tending, both sites are useful and satisfying to read. But Northwest Voice isn’t really native to the Net. Backfence is a genuine online creature, but it is not clear it is sustainable.

Northwest Voice, which is published online and in print by the Bakersfield Californian, is one of the oldest community-participation sites in this young business. The Californian simultaneously introduced its website at the same time it launched a free bi-weekly tabloid that is distributed to some 24,000 demographically desirable households.

The website, which is patrolled by editors, solicits reader contributions to supplement staff reporting for both the online and offline editions. So, it’s really a hybrid product. Even if citizen contributions flag, as they have been known to do from time to time, the project will be sustained, so long as the newspaper believes it to be strategically valuable.

Backfence is a pure web play introduced this month in two suburbs of Washington, DC. A web-only product with 199os-style visions of a multimillion-dollar, national rollout, Backfence aims to fill itself entirely with citizen-provided content. It intends to make money by selling advertising to local merchants and such larger regional and national accounts as its audience may merit.

Edited by Mark Potts, a veteran journalist of national distinction, Backfence is picture-perfect. The problem, indeed, is that it is too perfect. Because the site has not attracted very many contributions since it launched, it has been possible for Mark to carefuly groom each item. "The reality is, I really haven't had to do that much grooming," responds Mark. "A lot of what looks slick and edited about our site has more to do with design than with any intervention. Can a couple editors run 10 local sites, the way we have planned? No problem at all."

If Backfence can’t generate more interest, however, it isn’t going anyplace. If it does, how many Marks will it really take to keep Backfence looking good as it scales?

Plan B for community journalism may be Bayosphere, a new effort piloted by Dan Gillmor, the Silicon Valley journalist who literally wrote the book (“We the Media”) on citizen journalism. Because Bayosphere remains in semi-stealth mode, we can only surmise from Dan’s remarks that Bayosphere to some degree will marshal, moderate and massage the efforts of the community journalists who contribute to the site.

The question is whether community journalists will sit still for a vetting process, which some seem to equate with the Mainstream Media they disdain.

As CBS News, Mitch Albom and Newsweek famously learned when they bobbled the basics, there’s no substitute for getting your story straight. If citizen sites have been paying attention to those high-profile hijinks, they will take the steps necessary to establish their relevance and credibility.

In so doing, they can make a major contribution to elevating a public discourse profoundly tattered by rampant misinformation and partisan invective. If all they contribute is rabid babbling, who needs them?

We’ve been getting enough of that from the pros.

Big dipper: Newspaper market share

Newspapers lost the most advertising market share in the last five years, while online gained the most.

New statistics from Universal McCann, as reported in the New York Times, show the magnitude of the respective swings.

While over-all advertising expenditures increased by 19% to an estimated $201.6 billion between 1999 and 2004, newspaper ad revenues remained essentially flat at $46.6 billion at the end of the period.

With newspaper ad bookings holding steady in an expanding market, their share of the total market fell by 18.8% in the five-year period.

Online advertising in the same interval soared by 283% to almost $7 billion, increasing its share of the total market by 204%.

Behind online, the next biggest gainer was cable TV advertising, whose market share rose 79%. The only other winner was direct-mail, which gained 2.4% in share.

Broadcast TV lost 15% of market share, while magazines and radio respectively fell 9.9% and 5.6% in share.
 

Recycler's freebie plan doesn't ad up

The Tribune Co. deserves credit for being the first major newspaper publisher to grasp the concept that free online classified advertising is here to stay, but its response is strangely sub-optimal.

As all publishers should be, Tribune is worried about predictions that 8.6% of highly profitable newspaper revenues could vanish within two years as $4 billion in classified-ad revenues flow to eBay, Monster and free online sites like Craig’s List.

To combat the (mostly) free classifieds on Craig’s List, the most potent and disruptive of the challengers, Tribune plans to recycle Craig’s concept by launching in 12 cities a free classified site called Recycler.Com.

While not stunningly innovative, the launch is a forthright response to the reality that a growing number of people (especially them pesky young’uns) think “web,” not “newspaper,” when they want to sell a car, need to rent an apartment or got to have somebody to love. Courtesy of Craig, most people have come to realize they don’t have to pay for these ads, either. Hence, the threat to the more than $15 billion in classified ads sold annually by U.S. daily newspapers.

Tribune evidently was so fired up to fight free with free that it flat forgot to connect the dots that could make Recycler a far more potent strategic initiative than it appears destined to be. More on that in a moment. First, here’s the background:

Recycler, a Los Angeles institution acquired by Tribune when it bought Times Mirror in 2000, got its start 30 years ago as a free want-ad tabloid in Los Angeles. Recycler wisely set up shop on the web when such things became fashionable several years ago.

L.A.’s Recycler gives private parties free ads on both the web and in its print publication, but it charges commercial accounts a modest $8 for a basic listing. Recycler pushes a number of upsell opportunities to both individual and commercial advertisers entering listings at its website. The upsells include more text, more pictures, longer running time for the ads, and the ability to buy and sell online. This is a pretty good concept that claims to have “over 100,000 new listings” and 900,000 readers each week.

So far, so good.

In deciding to create a free online classified site in a dozen other towns, including all those where it operates the dominant newspaper, Tribune is launching the website, but inexplicably is skipping for the time being the print product that made the original Recycler a success. The Tribune’s plan is to “monitor user feedback and activity in each market to determine if there's a demand for additional print publications,” according Christine Hennessey, its public relations manager.

In the absence of the print product, it is unclear how potential users will know about the new website, because Tribune evidently is not clear on how it will promote the new service. Although the company could pitch the site at the TV stations and/or newspapers it owns in the each of the cities where Recycler is being launched, Tribune says only that it plans on “doing different things in different markets over the next few months.”

It's understandable if Tribune wants an element of surprise in its rollout plan. Let's just hope the product managers are in on the secret.

If you stipulate for the sake of argument that people indeed will find the website and start placing free ads on it, then Recycler’s success would seem to come at the expense of the paid classified business in Tribune’s own newspapers.

Unless, of course, the company had an aggressive plan to encourage Recycler advertisers to also buy ads in the incumbent papers. But, amazingly, Tribune doesn’t. “Tribune's focus is on gaining a critical mass of online listings and will evaluate print-ad demand and options in the future,” says Christine.

In the absence of a revenue-recapture plan, it looks like Recycler is poised to hasten, not arrest, the flow of paid classified ads to free online venues. So, we are left wondering:

:: How does Tribune think it is defending – or growing – its business by investing in an expensive project that further conditions consumers to expect free classified services?

:: Does Tribune really think advertisers will start buying Recycler ads if it decides to turn on the meter in three years? Won’t people just take their “free” business to Craig?

:: Does Tribune really think it can spend into oblivion the comfortably profitable Craig’s List, which started with almost no capital, doesn’t owe anybody any money and operates with a staff of just 18 people?

Recycler has the potential to be either a bold strategic stroke or a sorry strikeout. At the moment, the count is about 0-1½.

Not free, at last, at the N. Y. Times

Just a week after the Los Angeles Times stopped asking visitors to pay for certain online content, the New York Times announced plans to charge for access to some of its most prized web assets. Of the two, the NYT is on the right track.

As positive as this step is likely to be for the NYT, the plan, as discussed below, will not necessarily work for every newspaper. Still, it’s a giant leap toward establishing the prodigious value of the content that newspapers have been giving away for free in an introductory offer that has lasted for a decade.

Starting in September, the NYT will charge $49.95 a year for access to its columnists, its archives (which now cost a preposterous $3.95 per article), an online news-organizing tool and an early peek at certain features like the Sunday Magazine. Home-delivery subscribers will have unlimited access to these features at no additional charge, while all web visitors will have free access to NYT news until articles go into the pay-per-view archives after seven days.

The NYT project looks like a winner. In charging a fair price for access to exclusive, high-impact content, the NYT will establish the value of its wares and pick up some extra cash without seriously diminishing the traffic (and advertising sales) at a website that drew 1.7 million unique daily visitors in April.

In contrast to the strategically shrewd approach architected by the NYT, the LAT until last week had been charging $4.95 a month for access to one of the most popular parts of any newspaper’s web site – its entertainment section. Since Los Angeles is to entertainment what Washington is to politics and Detroit used to be to auto-making, the choice was sort of daft in the first place. The project doubtless succumbed to weaker site traffic and even weaker subscription sales.

In its ill-fated experiment, the LAT emphatically proved that you can’t charge a premium price for commodity content widely available at other sites. Publishers inspired by the NYT need to bear this in mind as they consider charging for the stuff they have been giving away for free since Al Gore invented the Internet.

Publishers could make the case, as do the Wall Street Journal and the Spokane Spokesman-Review, that everything on their web site is so special that visitors must pay to read anything on them (more details in this post). Newspapers can sell a subset of existing, home-grown content, as the NYT intends to do. Or, publishers can create original, online-only products like the Packer Insider developed by the Milwaukee Journal, which costs subscribers $34.95 a year and appears to gross something approaching seven figures.

Regardless of how newspapers play it, the content they sell has to be unique and valuable material that a reader can’t find anywhere else. The Wall Street Journal and NYT can pull this off with a straight face, but most other publications will have to create new, premium content before they can begin charging successfully for online access.

Publishers who think they can open a quickie online goldmine may wind up, instead, like unlucky canaries in a coal mine. Gasping.

Previous related posts

The longest-running introductory offer
Why buy the cow when the milk is free?
Rue the mugging of morgue readers
Peer-pressuring the Associated Press

Podcast radio: Dud on arrival

Podcast radio was a dud on arrival when it debuted this morning in San Francisco.

In what either is a bold, cutting-edge experiment or a cheap way to fill dead air until a better idea comes along, a moribund AM station at the far right of the dial became the first known broadcaster to dedicate itself to airing home-brewed programming.

In recasting KYCY-AM (1550) as KYOURadio.com, Infinity Broadcasting is trying to bring the cheek and chic of podcasting to the airwaves. Unfortunately, the linear format of radio is anathema to this rambunctious online medium. As exciting as podcasting is in real life, it comes off as being somewhere between boorish and boring on the radio.

The power and popularity of podcasting derives from the listener’s ability to choose what she wants to hear and when she wants to hear it. That, of course, is flat-out impossible in radio, which permits only one thing to be broadcast at a time.

While the strength of podcasting is its randomness and serendipity, the strength of radio as medium and a business derives from the predictability of its programming. If you are in the mood for acid rock, you tune into one station; if you want NPR, you go someplace else. For good or ill, radio has developed into a genre-specific medium, and broadcasters who think outside the box are likely to get their ears boxed at ratings time.

KYCY’s incarnation of podcast radio, which depends on the availability of submissions selected by its programmers, proved in its early hours to be a disjointed, discordant auditory smorgasbord. The mix also irritatingly included some programs that seemed more like infomercials than entertainment. Here’s a quick air check:

A program called “Rock Your Computer” was billed as a discussion of how to create music on your computer, but it devolved quickly into a series of shameless plugs for the podcaster’s ear-splitting album and the Apple software he used to make it.

This was followed by a guy who podcasts on his morning commute to work. He began with mundane gripes about lousy weather, heavy traffic, no coffee and a sick wife and kids, and then took a sharp turn to gloomy ruminations about death. “When you’re gone, you’re gone,” concluded our host. “It’s a dirt nap. There’s nothing. The thought of that is frightening, because you realize there’s no place to go to.”

Next up was a quickie riff from a European jazz artist, who played a tune that started promisingly but ended in teeth-grinding dissonance that sounded, so far as could be determined, like an out-of-tune piano in a blender.

This was followed by a fast-talking financial adviser who must have belted out his toll-free number five times in the first 90 seconds of the program.

While this fare deserves high marks for utter randomness, which could be construed by some as a plus, the rough-hewn quality of the programming makes listening a chore. Most of the shows appeared to be unedited first takes in which the podcaster aimlessly meandered down an uncertain path with no particular destination in mind, unless it was to hawk something. While some people may find this charming, I find it a waste of time.

A positive sign for this experiment is that more than 400 podcasts already have been submitted for future consideration from around the country and around the world, according to Infinity. The question is how many of those folks actually can – or would – listen to this radio station on a sustained basis.

The future of podcast radio ultimately will depend on how fondly it is perceived by the real people who matter, the folks in the front office at Infinity. At the moment, you can listen to podcast radio with complete confidence that you won’t be annoyed by any commercial messages other than the incessant promotions for the station itself.

If the audience builds and advertisers support it, then the station can look forward to a healthy run. If not, then podcasting will be sent back to its natural habitat, the web, where it will conteinue to thrive. Just like Br’er Rabbit in the briarpatch.

Good enough isn't good enough

The Newspaper Association of America proudly reports that nearly one in three Americans read an online newspaper in March, and that’s nice. But newspapers should not take this as evidence that everything is hunky-dory. It’s not.

The Pew Internet and American Life Project found that 77% of men and 66% of women use the Internet to keep up with the news, making it the No. 1 online activity. If the NAA is correct in saying 29% of news seekers are going to newspaper sites, then that means well over half of the potential audience is getting the news someplace else.

We know where they are going, too. Yahoo News, CNN, AOL and MSNBC are the top four online news destinations, far outpacing the closest print competitor, the New York Times.

But, wait, there’s more. In its survey of Internet usage during the 2004 presidential election, Pew found a significant generational divide between young and old news consumers:

Among the people under the age of 35 with high-speed connections at home, 40% said that the Internet was their main source of campaign news, twice the number (21%) who cited the newspaper. By contrast, those over the age of 35 with broadband at home, 26% said the Internet was their main source of campaign news, compared with 45% of the group who said the newspaper is mainly where they turned for news about the campaign.

Although I personally think people over the age of 35 – and, heck, even over the age of 105 – still matter, this survey illustrates that newspapers are not the top-of-mind destination for news-hungry members of the under-35 crowd. This not only displeases advertisers who favor youthful demographics, but also has unpleasant implications for the long-term prospects of print.

Here’s the conundrum: If people, even young people, are interested in the news; AND, if people, especially young people, like getting it on the Internet; AND, if newspapers are nothing if they are not sources of news, THEN, why don’t more people go to newspaper websites?

The answer was provided to a degree in a recent Carnegie Foundation study gauging consumer perceptions among newspapers and other media. As shown in this chart from an earlier posting, newspapers are seen as being harder to use, less trustworthy, more stodgy and even later with the news than competing media.

The real or perceived limitations of the print product, therefore, appear to affect (infect?) perceptions of the online product. Most publishers have contributed unwittingly to this problem by trying to make their websites seem as much like the paper as possible, populating their web pages with the same stories published in print.

To change perceptions and, significantly, to build valuable new audiences and revenue opportunities, publishers must develop websites that are more appealing to Net-native users.

Without compromising the dignity or credibility of their franchises, publishers need to add multiple media, searchable databases, interactive features, search tools, reader-participation features, shopping environments, entertainment listings, sports challenges and more.

If publishers learn to live, think and work in the Wired Age, they have a shot at reclaiming a fairer share of the online news market than they enjoy today, a doubly strategic imperative that at once will buttress their core business and create valuable new future market opportunities.

Good enough isn’t good enough.

A really big shoe on Broadway

Nike’s new dial-a-shoe billboard in Times Square is not just the ticket for exhibitionists with a shoe fetish, but it also demonstrates an excellent grasp of the promotional power of new media.

Nike for several years has operated the Nike iD website, where visitors can customize a pair of $100-plus athletic shoes by choosing different color schemes for the laces, the leather and the all-important swoosh.

Now, Nike has thoughtfully made it possible for well-heeled sneaker freaks in Manhattan to call an 800-number where they can customize shoes in real time on a 27-foot-high billboard over Times Square. The image of the shoe will be updated real time with the customer’s preferences.

So, Nike gets great exposure on the White Way, lots of free word of mouth and might even sell some more shoes.

Can old ad dogs learn new-media tricks?

Another day, another prediction that online ad sales will roughly double in the next five years to $26 billion.

It’s not a bad growth story. But it’s not that great, either, considering how much time people spend on the Internet and how little of the advertising pie goes to online media.

"When at-work Internet use is taken into consideration, consumers spend more than one-third of their time online – roughly the same amount of time they spend watching TV,” says Charlene Li, the Forrester Research analyst who predicts the coming surge in online ad sales. “Yet, marketers spend only 4% of ad budgets online versus 25% on TV."

This gap represents a terrific opportunity for broadcasters, newspapers and other legacy media companies to build both traditional and new media revenues by helping advertisers integrate interactive online capabilities into their marketing programs. This will require some creativity and some work, but the effort will strengthen these companies by equipping them with a virtually inexhaustible supply of valuable services and ad inventory.

The problem for Internet advertising is that the lion’s share of marketing dollars are spent on branding, the kinds of TV, newspaper or magazine ads that tell you how happy, sexy, healthy, wealthy or wise a given product will make you.

“Advertisers aren’t used to brand advertising on the Internet,” says Charlene. It is time-consuming to locate appropriate venues and requires lots of effort to spend relatively small amounts of money (ad agencies hate that). Moreover, the results of a branding ad, as opposed to one where the customer’s click signals a successful impression, are difficult to measure.

Attitudes are starting to change. After quizzing 99 marketers for her newly released report, Charlene found that nearly half of them plan to shift greater percentages of their future budgets to the web from traditional advertising channels like magazines, direct mail and newspapers. “McDonald’s knows it can’t sell hamburgers on the Internet,” says Charlene. “But they are very interested in using online to reinforce their branding.”

Investigating the appetitite for advertising in other media beyond the Net, Charlene found 64% of respondents are interested in advertising on blogs, 57% through RSS and 52% on such mobile devices as phones and PDAs.

If new media advertising is going to accelerate to the point that its market share is commensurate with the time consumers spend online and on their cellphones, companies operating those media are going to have to embrace systems that make it easier to rate, compare, buy and measure performance.

The legacy companies, which continue for the time being to attract the majority of the media dollars, will have to learn to sell new and traditional media together in seamless, customized, holistic packages that not only make the pitch but close the sale and build rich customer databases in the bargain. In other words, say good-bye to off-the-rack advertising schedules.

For example:

:: Show an ad for a new car and then direct the consumer to a web site where he can see a 360-view of the car, check features and prices, and then make an appointment for a test drive.

:: Tie the launch of a soft drink to the release of a new album by a popular artist. Encourage TV viewers and radio listeners to go to a website or call a toll-free phone number to download a one-play MP3 that can be downloaded online or via mobile phone. Encourage viral distribution of the MP3 by offering a coupon for a free soda if the registered user sends the song to four friends, who in turn also would receive a free-soda coupon.

:: Help merchants build direct-mail databases by directing consumers via traditional media to a website where visitors register for a free sample of a product and enter a sweepstakes.

If Charlene is right, many advertisers are ready to begin experimenting with the vast possibilities presented by new media. The swiftness, smoothness and success of their journey, ironically, will be in the hands of the legacy media companies.

If the legacy companies make the effort to become comfortable and competent with the many new possibilities, they will strengthen their franchises in an era of increasing competition for audiences and advertising dollars. If they don’t seize the opportunity to evolve successfully, they run the risk of being rendered increasingly irrelevant.

Evolve or dissolve. The choice is theirs.

Less is more, more or less

Back when newspaper circulation was rising, publishers couldn’t wait to tell you how great that was. Now that it is falling, they want you to know that size really doesn’t matter after all.

In light of the circulation decline at some 70% of the nation’s newspapers – with deeper drops in metro markets – publishers increasingly will start emphasizing the quality, not the diminishing quantity, of their audience.

While they probably should have been doing this since television began eroding readership back in the 1950s, publishers are being forced to get real about the numbers in a hurry because they can’t afford to maintain their artificially enhanced circulation in an era of declining revenues and growing pressure to increase profits.

When I say “artificially enhanced,” I don’t mean circulation figures are fraudulent, through there have been some recent high-profile cases of out-and-out cheating. Rather, I mean to say that circulation figures are substantially higher today than if the industry had not been taking extraordinary measures over the years to levitate them beyond natural market demand.

With competing media today challenging the economics of the newspaper business, the jig is just about up for publishers. But the industry can emerge leaner, meaner and healthier when it finishes the process of right-sizing its circulation.

Although 60% of a typical metro’s circulation consists of loyal subscribers who pay full price, a paper trying to maintain level circulation from year to year is forced to run continuous discount promotions to gain enough “readers” to make up the other 40%. If the newspaper went cold turkey and stopped discounting, its circulation likely would stabilize at about two-thirds of its current audience.

In the good old days, when higher circulation translated directly into higher advertising revenues, publishers could afford expensive promotions to build their subscriber rolls.

Today, of course, newspaper audiences are being fragmented by everything from Yahoo News to iPods, while a variety of print and online competitors are pressuring advertising rates. At the same time, increasingly sophisticated advertisers, who have learned to calculate ROIs and count clicks on the Internet, are demanding proof that their dollars are performing as promised.

Marketers scrutinizing the results of their campaigns use sophisticated, third-party research to learn which media perform the best in motivating their prospects to buy. Scarborough Research, for example, surveys 200,000 people per year in 75 markets to obtain information on 1,700 consumer categories. No matter how much a newspaper spends to beef up its circulation, most advertisers won’t be impressed unless they see a corresponding bump in Scarborough.

Even if money were no object, therefore, it no longer makes much sense for newspapers to spend good money after bad to pump raw circulation. But money indeed is an object for newspapers, which typically are owned by public companies that have to produce steady, reliable earnings growth to increase their stock prices.

With less cash to spend on subscriber acquisition, publishers will be confining such promotions as they can afford to the groups most desirable to Scarborough and the major merchants in their markets. At the same time, their sales pitches, fittingly, will begin to emphasize the quality, not the size, of their audience.

These changes, though healthy, will be challenging, because they profoundly affect the fundamental economics of the business, as well as the careers of people at most levels of the industry.

The transition will be worth it, however, if it results in compelling products that are valuable to subscribers and demonstrably effective for the advertisers appealing to them.

And the alternative? Unthinkable.

Circulation slide slams metros

The daily circulation of the nation's largest newspapers dropped an average of 3.3% in the six-month period ended March 31, as compared with the widely reported 1.9% drop for the industry over-all.

As demonstrated in the table below, almost every large metro newspaper lost substantially more circulation in the period than the industry average. The information was assembled by CS First Boston from the Fas-Fax statistics released Monday by the Audit Bureau of Circulations, an industry-funded watchdog.

"We were expecting the average circulation declines to fall in a relatively broad range of -2% to -3% and the over-all group decline was right in the middle of that at -1.9%," said William B. Drewry of the CSFB research team analyzing the numbers. "The majority of Wall Street will likely continue to view any decline in newspaper circulation as negative and we continue to stress that any proper analysis has to be relative to other local media trends -- particularly TV nets/stations and radio."

Noting that TV audiences are down by 1.8% and radio audiences are essentially flat, CSFB concludes that newspapers continue to "maintain their audience share" in local markets.

Fair enough. But the long-term decline in newspaper readership (see graph below) is not going to please the increasingly sophisticated advertisers seeking out media where they can measure the bang produced by their bucks. This is truer than ever in the aftermath of the high-profile circulation scandals that recently wounded the credibility of the industry.

Speaking of the recent circulation scandals, you would think the industry would have gone out of its way this time to openly present clear and easily comparable circulation information. But you would be wrong.

It shouldn't have to be that way. Can we fix that?

Notwithstanding the challenges and limitations of data gathering, it is clear that readership at major metros is declining more dramatically than at smaller dailies. The primary reasons are competition from other media and, increasingly, a variety of free print products produced either by or against the ensconced dailies. As if to underscore the disintermediation of the print audience, CSFB reports that traffic at the 25 largest newspaper websites grew a sturdy 11.4% in March.

Only time will tell whether the "accelrating decline" in metro circulation "reflects a temportary 'adjustment' or an intensifying shift of readers to digital media," says Paul Ginnochio, a securities analyst at Deutsche Bank.

The worst print circulation drop among the major metros was at the Baltimore Sun, where sales fell 11.3% for daily and 8.5% for Sunday. The news was nasty for two other Tribune Co. properties. The Los Angeles Times fell by 6.5% daily and 7.9% Sunday and the Chicago Tribune slid 6.5% daily and 4.7% Sunday.

On the plus side, the Minneapolis Star Tribune and New York Times eked out modest daily circulation gains of 0.3% and 0.2% respectively. Sunday sales at the Star Tribune slid 2.3%, while the N.Y. Times gained 0.2% on Sunday.

Despite dropping half a percentage point in daily sales, the New York Daily News increased Sunday circulation by 4.1%, the best Sunday performance in the group. Average Sunday circulation for the metros fell 3.2% vs. 2.5% for the industry as a whole.

Circulation figures were not reported for the three prominent dailies censured last year for falsely inflating their circulation figures. Audits remain to be completed for Newsday, the Chicago Sun-Times and the Dallas Morning News. (The Milwaukee Journal recently was accused in a lawsuit with inflating its numbers, which the paper has denied.)

Seeking to put the circulation swoon in the best possible light, the leader of the industry's trade association said publishers nowadays are turning away from "short-term circulation sales programs toward longer-term marketing initiatives, such as investments in subscriber retention and new products that increase readership."

In the future, said John F. Sturm, CEO of the Newspaper Association of America, "the conversations that publishers and advertisers have about newspaper audiences will cover a much wider scope than net paid circulation."

It's a good thing for the sales guys in Baltimore that the Orioles are having the best season since 1997. As an alternative to discussing the Sun's squishy circulation, they can talk baseball instead.