CREATING SOURCES OF NEW REVENUE IS THIS YEAR'S TOP TASK

Costs have been cut quite nicely; now it's time to boost sales

NAPA VALLEY, Calif – With more than 160 people attending a conference about on-line classified advertising here in January, one thing has become perfectly clear about the newspaper business in 1998: We're going to shift emphasis from cutting costs to increasing revenues.

In 1994 or ’95, you couldn't have gotten 16 people together to talk about on-line classifieds or even print classifieds (I know: I moderated a discussion on the topic at that time and had only a handful of people in the room).

Though we'll provide complete conference coverage in our sister publication, The Cole Papers, I came away from that meeting (as well as another one focusing on advertising held the following week in Florida) with a sense that there is a renewed focus on getting out there and selling some ads.

Whether we're talking about giving salespeople better tools or providing customers with a better way to interact with us, publishers across America seem to be swinging away from recession-induced cost-cutting measures and looking at newer, better ways to get more dollars in the door.

We're certainly in a business that is becoming less and less sedentary and more and more cyclical. The long, slow recession of the early part of the decade did give us a laser-like focus on cutting costs, though. And cut we have; we're running leaner organizations than ever before (although there's a case to be made that some areas of the business – especially the newsroom – have been cut overly much). To add new revenues on top of decreased expenses just carries the dollars to the bottom line.

Inside, we bring you the first round of earnings reports, both for the fourth quarter of ’97 and for the entire year (next time you'll get a full analysis and more reports from publicly traded companies). Like the three before it, the last quarter looks like it was especially kind to the newspaper business. Year-end results should have publishers and newspaper executives positively glowing.

But, as we know too well from the early ’90s, this could change with the flick of a newsprint price increase, or the collapse of a financial market or three in some far-off land.

The only way to insure continued growth in newspaper revenues and profits is to sell more ads; it's my sense that that's just what the business is trying to do.

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Also inside, you'll find an in-depth look at how newspapers can leverage their editorial content into expositions and conferences. Longtime newspaper business observer and marketing expert Roger S. Peterson talks to newspapers around the country, analyzing how they have selected topics that interest the public – with the side benefit of not only bringing in their own revenues, but also increasing display advertising lineage through special sections or ROP.

I have said for a couple of years that newspapers must come to grips with the notion that to survive into the 21st century, they must have many, many streams of income. The energy-expended/revenue equation for expositions and conferences is so great that newspapers must consider these for their potential ancillary income.

Lastly, Senior Editor Pete Wetmore reviews the 48-year newspaper career of Bob Danzig, the recently retired head of Hearst Newspapers. As a 12-year veteran Hearstling, I encountered Danzig a couple of times, but the first is probably the most telling.

In 1981, Danzig visited the San Francisco Examiner. I was walking into the editor's office when he was walking out, and we were introduced. Danzig said, "Oh, yeah. Dave Cole – you came to work here in 1977 on the copy desk and moved to systems last year. I hear you're running the computer department well."

Remember, I'd never met the man, and he wasn't expecting to meet me. That was Bob Danzig's way of running a newspaper company – knowing everyone, what they did and their strengths.

That's probably how we should all run our businesses.

– David M. Cole

Inside ...

• Year-end results are a mixed bag of mostly good news
• Newspapers are finding event promotions a new source of revenue
• Bob Danzig leaves the only company he's ever known
• Florida's Sun-Sentinel teams up with two local TV stations
• Another Cowles unit, several dailies sold
• An alphabet soup of new technology is simmering
• Persons

From NEWSINC., Feb. 2, 1998, Copyright © 1998, The Cole Group. All Rights Reserved.