Sixty seconds to save a life

Nineteen Michigan radio stations this week each gave up a minute of valuable morning drive time to save a bunch of babies from lifelong disability or death. If you are a broadcaster, you can do the same, too.

The stations serving the Grand Rapids market aired a simultaneous public-service spot to alert listeners to the dangers of shaking a baby, a momentary act of frustration that is fatal 25% of the times it happens.

The non-profit National Center on Shaken Baby Syndrome estimates that as many as 1,400 shaken babies are injured a year, with up to 430 of them dying from their injuries. Children who survive shaking face an 80% chance of lifelong complications including blindness; hearing impairment; cerebral palsy; seizures, and speech and learning disabilities.

The public-service spot, which ran as a roadblock so listeners could not escape the message by switching stations, features the crying of an increasingly fussy baby and concludes with the warning: “No matter how much she cries. No matter how tired you are. No matter how frustrated you get. Never, ever shake a baby.”

The Michigan broadcasters were persuaded to run the roadblock after learning of the success of a similar effort in Milwaukee from Dr. Danielle Spilotro, a talented and dedicated pediatrician at DeVos Children’s Hospital in Grand Rapids who also happens to be my niece.

After the radio roadblock in Milwaukee in 2001, no cases of Shaken Baby Syndrome were reported for three months. In Grand Rapids, a smaller market than Milwaukee, the hospitals saw four cases of Shaken Baby Syndrome in 2006 and eight cases so far this year.

Broadcasters interested in replicating this successful campaign can acquire the media kit and the audio CD here for $60. Sixty bucks and sixty seconds of airtime aren’t much to spend to save a lot of innocent lives.

Be careful what you wish for

The bad news for the newspaper business is good news for publishers whose shareholders a year ago would have been demanding their assets be sold to the highest bidder.

With circulation, ad revenue and profits in freefall – and no bottom in sight – there’s no one around today to bid for the assets of such troubled companies as New York Times, McClatchy and most of the rest of the publishing group.

This grim reality, plus a freshly frozen M&A marketplace, has silenced the dissatisfied investors who forced the liquidation of Knight Ridder in 2006 and the agreement earlier this year to take the Tribune Co. private in a still-pending highly leveraged transaction.

But the good news for publishers – that no one is demanding their liquidation any more – is also bad news, because it means they will be stuck tending to the massive and so-far insoluble problem of cauterizing the sales losses that have eroded profits at a quickening pace for the better part of two years.

Publishers who had hoped to be left alone to manage their companies – as opposed to the fortunate few who exited KRI with $57 million in parting gifts – know the true meaning of being careful about what you wish for.

Investor pressure came off NYT Co. this week when Morgan Stanley quietly dumped its stock after lobbying unsuccessfully for nearly two years to eliminate the two-tier ownership structure that gives the Ochs-Sulzberger family more control over the company than enjoyed by public shareholders.

Morgan Stanley’s capitulation means the NYT Co. has no particular incentive to go private, a possibility raised here in April. It’s a good thing, too, because the poor performance of the company’s publishing properties and now-fallow debt market would make it all but impossible for NYT to raise the money it would need to cash out its public stockholders.

Morgan Stanley wasn’t the first of the once-aggressive newspaper investors to sell its shares and slink away. As reported here earlier, Private Capital Management, the investor that forced the breakup of Knight Ridder, has been in the process of unloading billions of dollars in shares of not only NYT but also McClatchy, Belo, Lee, Media General and Gannett.

The outlook for newspapers is so scary that even two diversified media companies who grew up in the publishing business are jettisoning their newspaper properties. Belo and Scripps are forcing their newspaper properties to fend for themselves in soon-to-be-created, free-standing companies, thus insulating their healthier broadcast, cable and interactive assets in separate entities.

Gannett, which has a fair ration of television properties in its portfolio, says it has no plans to do the same. But I wouldn’t rule it out.

Meanwhile, McClatchy, the largest pure-play newspaper publisher, is getting ready to write down a substantial portion of the $4 billion it paid for the two-thirds of KRI that it kept when it bought the company scarcely 15 months ago. McClatchy is still working through the complex accounting calculations required to mark the fallen value of KRI’s assets to current market conditions.

But this will give you a sense of how far things have fallen. The 35 million shares of stock McClatchy issued to buy KRI are carried on its books at a value of $1.8 billion, or $52.06 per share. With the stock having closed today at $17.97, those shares are worth a bit less than $629 million, or fully 65.5% less than when the deal was struck.

How’s that for depressing, fellow shareholders?

Yahoo! for Yahoo? Maybe not.

The jumbo online revenue gains at Yahoo’s newspaper partners may be transitory and short-lived, say publishers struggling to sustain initial lifts they fear they can’t replicate in the second year of the agreement.

While online sales increased in the neighborhood of 50% for some publishers who began cross-selling Yahoo’s HotJobs along with their traditional recruitment products, executives on the eve of the one-year anniversary of the partnership say it will be difficult in the second 12 months to equal its first-year success.

The Yahoo newspaper consortium, which launched in November, 2006, was forged by Belo, Cox, Scripps, Hearst, Journal Register, Lee Enterprises and MediaNews Group. Although publishers hailed the deal at the time as “transformational,” executives now are worried about maintaining the encouraging early momentum.

“We aren’t anywhere near matching the initial gains,” says an online executive at one of the earliest publishers to partner with HotJobs. “We are struggling and I don’t see how we are going to make it.”

If this experience proves to be commonplace, it would throw cold water on the idea that hefty, double-digit advances in online sales in the next few years could help Yahoo’s newspaper partners offset an appreciable portion of their declining print revenues.

As previously reported here, one Wall Street analyst hypothesized that the newspapers teaming with Yahoo could boost their online sales by a large enough amount to achieve positive over-all sales gains as soon as 2009. Paul Ginocchio, the Deutsche Bank analyst, premised his forecast on newspapers being able grow online sales by no less than 40% annually for a period of three straight years.

While year-to-date online ad sales at a publisher like Lee Enterprises are 56% stronger in 2007 than they were prior to the HotJobs deal, some executives are worried that the year-to-year numbers after the first anniversary won’t grow at anything close to the original pace.

Industry-wide, print newspaper classified revenue fell nearly 16.5% in the half of this year to $1.97 billion, according to the Newspaper Association of America. Although the NAA does not report online revenues by category, total newspaper online revenues gained 20.3% in the first six months. In the same period, Monster.Com, the leading independent online job site, reported a 22% gain in sales.

Even though Monster seems to be growing at a respectable clip, online newspaper sales can’t help but be dragged down by the eroding print side of the business, which historically was the reason help-wanted advertisers came to the newspaper in the first place. If advertisers are migrating to online vs. print recruitment, it doesn’t necessarily follow that they will stick with newspapers, especially since Monster often is cheaper than newspapers and Craig’s List is free in all but a handful of major markets where its top price for a help-wanted ad is $75.

In addition to the above challenges, newspapers face two additional hurdles in their pursuit of back-to-back years of 40% or 50% gains in their online-recruitment sales.

First, newspapers entering the second year of the Yahoo partnership won’t have the one-time infusion of new revenues they got when they initially added HotJobs to their existing recruitment efforts. A restaurant serving only lunch and dinner can boost its sales quite a bit by opening for breakfast. But it can’t add other meals in the second, third and fourth years to match the first-year bonanza.

Second, help-wanted advertising seems to be declining in concert with a real, or perceived, slowdown in the economy. Employers are thinning their payrolls in response to tighter credit, the housing slump and a feared pullback in consumer spending.

In fairness, there’s more to the Yahoo partnership than HotJobs. The venture also includes mutual cooperation in the sale of national, local and search advertising. While some of those products already are reflected in the improved online numbers for newspapers, it is likely they can be developed further.

At the moment, however, HotJobs is the major factor driving the Yahoo revenue surge. And the outlook for that vertical isn’t auspicious.

“We think recruitment advertising will slow further, even if the economy avoids a recession in 2008,” says John Janedis of Wachovia Bank.

So, publishers counting on Yahoo to rescue them may want to consider some alternative juju, too.

Brain drain

As if the mainstream media didn’t have enough trouble navigating the uncharted realm of digital innovation, they are losing many of the young, technologically astute employees who could be their guides.

“What am I doing here?” a talented young designer and programmer working at a publishing company asked me recently. “These guys don’t get it. I’ve got to get out. I’m just wasting my time.”

Like the others quoted in this article, the young journalist is not being named, so as to protect his livelihood until he bails out of his MSM job.

He summed up the frustration of the twenty- and thirty-something professionals who grew up with a keyboard at their fingertips and an iPod, or at least a Walkman, plugged in their ears. They use modern media the way their generation does, not the way their fifty-something bosses wish they would.

But the young net natives, for the most part, rank too low in the organizations that employ them to be invited to the pivotal discussions determining the stratgeic initiatives that could help their employers sustain their franchises.

“In most organizations, the people with the most online experience have the least political capital,” said one mid-level online editor at a newspaper. “It seems like the pace of change inside media is slowing, tied up in politics and lack of expertise in managing technical projects – while the pace of change is continuing apace outside our windows.”

Members of the wired generation say the process, bureaucracy and caution common to most media companies steals spontaneity and edginess away from ideas that could be appealing to their peers.

“Management is more concerned about who owns the change than they are about creating change,” said the online newspaper editor. “I hear people wail about journalism, when most of their arguments aren't about journalism but about their own job security and, more importantly, egos.”

Adding insult to injury, the net natives say they sometimes are pulled off promising projects to work on watered-down ideas that, in their opinion, won’t be successful. “I can innovate 10 times faster than any journalism organization,” said an online editor.

While the above comments may be, in part, a common reflection of generational impatience, these concerns take on new urgency at a time when most available data tell us that young people are consuming media in completely different ways than prior generations.

As but one example, consumers aged 13 to 24 narrowly favor user-generated media (blogs, YouTube, Facebook, Flckr and the like) over content created by the traditional media, according to recent research from Deloitte & Touche (see table below).

“I don't understand or like the media,” said the online newspaper editor who's planning his exit. “Blogging has shown me that I don't really need the guys that own the presses anymore. I'll probably stay in journalism, but I can't wait to get out of the media.”

Media remix

There could be two reasons advertising expenditures for the major media declined in the first half of this year for the first time since the tech bubble burst in 2001. Or, maybe three.

One cause could be that advertisers, fearing a weak economy, are cutting back on expenditures to sustain their bottom lines. The other is that advertisers are funneling more dollars into non-traditional media. And the third possibility – the one I favor – is both of the above.

Ad outlays slipped by 0.3% to $72.6 billion in the first six months of 2007 from the same period a year ago, according to TNS Media Intelligence, a company that tries to sleuth out where marketers, who don’t necessarily want people knowing what they're doing, spend their dough.

The sales drop was not spread equally among the media. As you will see from the graph below, the period was kind to such media as the Internet (+17.7%), business magazines (+6.7%), outdoor (+3.9%) and cable TV (+2.8%). The shortfalls were suffered by consumer magazines (–7.2%), newspapers (–5.8%), broadcast TV (–4.1%) and radio (–2.7%).

Advancing the theory that the over-all decline in ad sales is the result of uncertain economic conditions, Steven Fredericks, the chief executive of TNS said: “While the protracted downturn in automotive spending has been a prime contributor, the overall results reflect weakness across a wide range of industries and advertisers. Given the uncertainties about near-term economic growth and consumer spending, we expect core ad spending will continue to face challenges during the second half of the year.”

I think Steven’s probably right. But I also think fewer ad dollars are flowing to the several media his compnay happens to monitor. Maybe lots fewer, to wit:

Even though TNS reported that the nation’s top brewers cut their traditional spending by 24%, or $131 million, during the first six months of 2007, “brewers insist they haven't cut [total marketing] spending at all,” reports Jeremy Mullman of Advertising Age, adding that “in many cases [they] have increased it.”

Far from vanishing, “beer bucks are flowing into less-traditional sponsorship and promotional activities that services such as TNS don't pick up on,’’ says Jeremy. “Moreover, as a result of the influx of smaller brands into the big brewers' portfolios, more of their ad budgets are being channeled into local media, which the brewers say TNS doesn't measure, either.”

Instead of buying commercials and print ads, reports Jeremy, brewers nowadays are paying for product placement in entertainment programming (not measured by TNS-type services) and sponsoring promotional events like a bar “Olympics” in Chicago.

If you work at a mainstream media company and happen to believe, like me, that brewers aren’t the only ones forsaking the MSM for non-traditional ways to connect with customers, then you ought to start thinking about how you can help marketers engage creatively with consumers in your market.

Maybe it’s in print or on the air. But maybe it’s in a saloon.