PR 101

This sight could soon be a thing of the past.

I hate it when I agree with press baron Rupert Murdoch. But The Alien (as the late, great Chicago newspaper columnist Mike Royko called him) is correct. Newspapers should start charging for their online efforts. However, Murdoch’s suggestion is half-uh, planned. In my view, newspapers should stop printing completely and go exclusively on line. Think Kindles and IPods. Throw in a heaping helping of social media and I think newspapers would again be successful. I feel it is going to take something that radical to save quality journalism.

What’s killing newspapers is that the so-called Millennials get their information from the Internet – primarily from social media. They make decisions on purchases by reading other customers’ online comments, and get their news from sites such as Google News, Twitter, Digg and Facebook and go to Craigslist for classified ads. Their lifestyle does not lend itself to reading a newspaper as they sip a cup of coffee at the breakfast table.

Editors around the world have tried valiantly to reach out to those readers. Hiring younger reporters, creating special sections aimed (hopefully) at younger reader’s interest and sponsoring concerts and other events. None of it has worked.

Newspapers need to survive. I could talk watchdogs and the Fourth Estate, Thomas Jefferson and others. But, for the Internet generation, I will provide a major reason. Where do you think all of the aggregated content on news sites comes from? It comes from journalists around the world gathering that information. Who will provide that if news organizations go away?

As marketers, we still need news outlets. It is still one of the best ways to reach potential customers.

“By undermining the financial viability of traditional media, marketers are jeopardizing the only viable means currently available for reaching mass audiences,” Karlene Lukovitz wrote in the Aug. 4 issue of MarketingDaily, “That’s the core premise of “The CMO’s Dilemma: Can You Reach the Masses Without Mass Media?,” a new white paper co-authored by John Rose and Neal Zuckerman of The Boston Consulting Group. Rose and Zuckerman argue that it’s critical that marketers, agencies and media companies start addressing the issues surrounding this dilemma together.”

So, what to do? Well, I would scrap the presses and everything else physical used to produce a newspaper. In their place, I would provide every reader with a Kindle or IPod. I would sell subscribers the electronic reader at a reduced rate and then provide everything from breaking news to crossword puzzles on the Web.

“Wireless can offer newspapers a distribution platform that can provide a new source of revenue, as well as replace revenue loss from a readership transitioning from a physical to a digital product by providing enhanced value,” Mark Desautels, of The Wireless Association wrote in an NAA blog.

I agree and it also would save a lot of money for newspapers, I think. I could not find an aggregated figure for newspaper production costs. But, the Business Insider estimated it costs the New York Times twice as much to print the paper as it would to give all 800,000-plus readers a Kindle. The blog estimates the Times spends approximately $644 million a year in production costs – that’s printing and distribution.

It currently costs $680 a year to subscribe to the New York Times, according to its website. According to Amazon’s website, a Kindle retails for $299. When I was a reporter, it was assumed that four people read each paper. So, the Times would need to procure 200,000 kindles, give or take. I am willing to bet Amazon would discount the price for buying in that kind of bulk. And that’s a one-time expense.

So, the Times cuts $644 million in expenses by going to an electronic only newspaper. It also has the means to reach out to all those Gen-Yers who wouldn’t be caught dead getting newsprint all over their fingers. This is a generation who gets its information from the Internet. So go where they are and give them the news by sending out The Electronic Gazette.

My Electronic Gazette would send out news 24-hours-a-day, seven-days-a-week. There would be podcasts and video. The advantage it would have over current Internet news sites is that it would be news geared toward where it was based. That’s key. It’s easy to get national and international news. What’s hard to find out is what is happening in your community. As newspapers have made cuts, one of the things that has been thrown over the side is in-depth coverage of local news.

It is well documented that newspaper websites are recording millions of hits. The market is already there. It just needs to be monetized.

“Surprisingly, research conducted by Frank N. Magid Associates in June indicates that consumers are willing to pay for access to the content they enjoy,” Lindsey Schutte wrote in the Aug. 7 edition EngageGenY, a Media:Post blog. “In fact, members of Gen Y are more likely to say they will spend money than Gen Xers and Baby Boomers.

“For instance, 80% of Gen Yers say they would pay for music, whereas only 52% of Baby Boomers say the same,” Schutte wrote. “Sixty-nine percent of Gen Yers would pay for professionally produced television programming, whereas only 51% of Baby Boomers say the same. The gap narrows when it comes to news and information, 43% of Gen Yers say they would pay versus 36% of Baby Boomers — but the gap still exists. Paying is defined as exchanging money; it does not include accepting ads for content.”

Social media would need to be part of the mix. I think electronic papers could drive circulation up by social media. If I were the publisher of The Electronic Gazette, I would make sure links our stories were tweeted, Dugg, and were on Friendfeed. I would invite bloggers to link to our site. Facebook would be a big part of my effort. I think social media would deliver the so-called “golden readers” advertisers want: the 18- to 25-year-olds who do not yet have much brand loyalty.

What this would do would be to create a community around the newspaper – the same has been built around Apple or Zappos shoes. Once that happens, newspapers might actually survive.

NOTE TO MY READERS: If you are interested in a free, introductory course on social media, email me. This is the last week I will make this offer. Myself and some other social media acolytes are giving away an EBook written by social media guru Simon U. Ford. Ford sold several thousand of the books for $67. However, we have permission to give it away for a limited time. In addition, you get five free podcasts. We also will be holding a series of four virtual “book clubs” to go over the book. Between the book and the sessions, you will receive a comprehensive overview of social media. Because we want to provide the best possible training, there are 25 spots left. For more information, go to the Social Boomers site. That’s right, we are actually marketing to Boomers – and anyone else who is interested.

It is no secret that the recession is deeply affecting marketing, public relations and advertising agencies. In the last two months, at least a dozen marketing communications people I know have lost their jobs. It is nothing they have done or haven’t done. It’s just that clients are just not spending.

I can attest to the recession’s effects on my own small business. Clients have cut spending, gone away completely, or taken longer to make decisions on new marketing efforts. I don’t blame them. There is a lot of fear out there. We have not been through anything like this since the end of World War II. None of us know what to do.

So companies are doing what seems logical. They are retrenching, laying off people, and slashing their marketing budgets. The thinking seems to be that we need to hoard our resources or we won’t survive. Right now, we cannot worry marketing. Besides, the thinking goes, consumers aren’t buying right now anyway. They too are retrenching.

On the surface, that seems like the course to take. Prudence and frugality should rule until the whole thing is over. do. But it’s not the course companies should be taking. and I can prove it. Let’s first consider the cereal giant, Kellogg.

“So, when the Depression hit, no one knew what would happen to consumer demand,” James Surowiecki wrote in the April 20, 2009 issue of The New Yorker. “Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.) By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty per cent and it had become what it remains today: the industry’s dominant player.”

Surowiecki also wrote “… a major study, by the Strategic Planning Institute, of corporate behavior during the past thirty years found that reducing ad spending during recessions did improve companies’ return on capital. It also meant, though, that they grew less quickly in the years following recessions than more free-spending competitors did.”

It is understandable that many executives are scared to gamble on introducing and marketing something new. I think they see themselves as captains of the Titanic. If they go too fast, they risk running into the iceberg. Going slow allows them to miss the obstacles. But remember this about the Titanic: it wasn’t speed that sank it; it was the failure to see the iceberg that did in the ship. Neither lookout had binoculars and didn’t see the massive piece of ice until it was too late.

Fearing that iceberg, executives don’t see the value in stoking the engines up. But, as long as there are good look-outs with the right equipment, the ice can be avoided. Some companies know that. Let’s look at some the products introduced and marketed during economic hard times:

• Kraft introduced Miracle Whip in 1933. Through both radio and newspaper ads, it became the top salad dressing in the United States.

• In 1933, Proctor & Gamble went on the radio with the first soap opera – “Ma Perkins,” sponsored by Oxydol.  P&G was so satisfied with the sales increase, they went on to introduce “Vic and Sadie” for Crisco, “O’Niells” for Ivory Soap and “Forever Young” for Camay.  By 1939 the Cincinnati-based company was sponsoring 21 radio programs. It doubled its radio-advertising budget every two years during the Depression.
• Also during the Depression, General Motors used intensive advertising to pass Ford as the number auto company. I find it interesting that Ford is now gearing up its marketing efforts, while GM sits on the sidelines.
• Apple introduced the IPod in 2001, around the bottom of the last recession. Apple is a master of viral marketing. We all know what happened to the Apple’s profits as a result. In addition, Apple has used the cache built by IPod to increase its market in areas such as laptop computers.

I could on, but the point is, cutting back the wrong thing to do. Of course, it’s a gamble.

As Surowiecki concluded: “The academics Peter Dickson and Joseph Giglierano have argued that companies have to worry about two kinds of failure: “sinking the boat” (wrecking the company by making a bad bet) or “missing the boat” (letting a great opportunity pass). Today, most companies are far more worried about sinking the boat than about missing it. That’s why the opportunity to do what Kellogg did exists. That’s also why it’s so nerve-racking to try it.”

Of course, I have an answer for that – social media. I know I am obnoxious about this, but I firmly believe that social media is going to replace traditional advertising, marketing, and public relations within the not-to-distant future. Think of social media in the same Proctor & Gamble thought of radio in the 1930s. A lot of the company’s shareholders were opposed to using the new medium, especially during The Great Depression.

Think of social media as the new radio. As radio was to P&G, social media could be to a smart company willing to take a chance. A lot of companies are starting to dabble in it, but few have made a total commitment. I think there is both fear and unfamiliarity with the new medium. A survey by the blog überceo found that the majority of CEOs whose companies are on the Fortune 100 are – the blog’s words – social media slackers. They don’t understand it or know how to use it.

That’s where someone like me enters the picture. It is my job to show executives why it is smart to market using social media. Just let any savvy marketer who understands media into the room and we will show why this recession could be the best thing that ever happened to your company.