Newspapers and department stores no longer have a loving relationship. After generations of what appeared to be a match made in heaven, retail giants, particularly Macy’s, are cutting back on the lifeblood that keeps newspapers alive. That’s ad revenue.
While a suspiciously wandering eye permeates the real world versus digital climate, print and retail haven’t parted ways just yet. They still have a mutually beneficial relationship, at least to a certain extent. But if the current downward spiral is any indicator, retail might soon file for a formal separation.
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There’s an Irony in the Relationship
Once upon a time, newspapers and major retailers had a simpatico relationship. Print gave department stores such as Macy’s much-needed exposure. In return, the retail giants devoted nearly all of their advertising budgets to print. But like many business love stories that fell apart, the Internet was a bit of a home wrecker.
The revenue issues that newspapers have experienced for years is old news. The only things new about it are the creative experiments designed to recapture some of the former revenue security. Pitiful few of them actually work. But in a slightly ironic twist, retailers are experiencing the same problems as print.
Where newspapers watched as readers and ad revenue left en masse for digital, Macy’s, Kohl’s and other department stores lost brick-and-mortar business to Internet-only retailers, particularly Amazon. Both industries offer digital options. But both former industry leaders are in a “fight for survival,” says Politico.
Ad Revenue Isn’t Showing the Love
How much trouble is there on the home front? Macy’s newspaper run of press (ROP) ads are being hacked down by about half. Politico estimates that Macy’s alone accounts for a staggering $900,000 plummet in ad revenue just for ROP. Fortunately, preprint ads haven’t changed much. At least not yet.
But retailers aren’t slashing print ads out of spite. Where print no longer has the readership that it once did, department stores aren’t getting the exposure that they once enjoyed. The benefit isn’t there, so advertising dollars are being spent elsewhere.
Both former giants are experiencing the same problems, but joining forces isn’t the way to revive retail. It doesn’t make sense to keep investing there. Print is the most expensive way to advertise. And unlike the golden era, it’s now offering the worst return on investment.
When big stores can easily reach their customer base on their own, print and
digital newspapers have no choice but to evolve in a new direction.
Macy’s Publishes Many of its Own Ads Now
Digital is the direction that retailers and newspapers are heading. And where department stores once needed newspapers to give them exposure, an interesting thing happened in the transition. Retailers are publishing their own ads.
Targeted advertising lets stores place digital ads in front of the right eyes without involving newspapers at all. That’s bad news for print and digital news, of course. But it’s a boon for retailers. Newspapers have reacted by offering less expensive advertising, but retail isn’t buying in like before.
On the upside, smaller, local stores can now afford major print exposure, such as double-truck ads. You’ll see fewer national chains taking up those slots and more local businesses now. And on the downside, the reason they can afford it is that print keeps lowering the cost of what was once very impressive newspaper real estate.
No one likes to see a marriage on the rocks, but you know what they say. Sometimes people just grow apart. And sometimes business partners who practically finished each other’s sentences find that they have little in common anymore.
It’s yet another chapter in the story of how the Internet broke up a happy home. It’s not going to change, predicts Politico. Print is likely to become a quaint icon, like an old boyfriend that pops in your head once in a while. And digital will continue to become the new relationship, the way that ordinary business gets done.
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