June 24, 2011

More media vie for city ad dollars

Published June 24, 2011
Information is gathered today in far many more ways
than when it was delivered on your front porch.
(Image by Stock.xchng vi)
Second of two
By Ted Schnell • BocaJump
The dominance of traditional media such as newspapers, radio and television once meant there were relatively few choices for “getting the word out” about anything.

For cities, government agencies, civic groups and businesses, press releases typically were the way to go, sometimes sparking enough interest that an editor would assign a reporter and photographer or cameraman to cover the story.

But often the method of choice was the purchase of an advertisement.

Life was simple. For countless decades, getting something into the local paper was the most efficient way to deliver information to the greatest number of people in a given area in what then was considered a relatively short time.

Times change, however, and change has a tendency to be unsettling.

Elgin City Manager Sean Stegall, speaking in his office on Wednesday afternoon, said the way the city communicates with its residents has undergone a tremendous transformation just in his tenure with the city of Elgin.

“When I came here, all we really needed to do just 11 years ago was to have relationships – we’d have press releases, and it was all about newspapers, and then some trade publications and those things,” Stegall said.

The arrival of the Internet has ended the days of dominance by traditional media.
Stegall stressed that does not mean traditional media are no longer relevant or useful. They still have a value.

But there are far more ways of disseminating information today, Stegall said, and there is no longer a one-size-fits-all approach to “getting the word out.” Deciding how to get that information out means looking at demographics, finding out who is getting their information from where, and making use of those media accordingly. Middle-age to older readers likely prefer to hold something in their hands to read; middle-age to younger readers may prefer using a PC, a tablet or a smartphone.

Further, there are more information providers out there vying for access to information – and for advertising dollars. That puts new media like BocaJump – new kids on the block by comparison – in competition with traditional media for a piece of the advertising pie.
That pie may be shrinking as the nation struggles through its economic woes, but the growth of e-commerce means that pie also is being divvied up among more venues. In 2010, that pie totaled $316,588.02.
Documenting the decline
In March, Mashable.com reported that by late 2010, for the first time more people were getting their news from the Internet than from newspapers, and that more ad dollars went to online outlets than to newspapers. Drawing more than 40 million page views a month, Mashable.com is considered by many a top source of news on social and digital media, technology and web culture.

Mashable.com’s report shocked some, but to many in the newspaper, it came as little surprise.

The industry has taken a one-two punch with the rise of the Internet and the decline in the economy. That, in turn, has triggered cutbacks, smaller papers and layoffs that, in turn, hamper the industry’s ability to continue providing the quantity and quality of local news readers expect.

Newspaper readership has been in decline since World War II, but the drop has become more precipitous in the United States over the past several years. The Pew Research Center’s Project for Excellence in Journalism found in its State of the News Media 2011 annual report on American journalism, that newspaper circulation in the United States has seen decline in the number of subscribers continue. The report states: “In the United States, newspaper circulation fell by 10.6 percent daily and 7.1 percent on Sundays in the six months from March to September 30, 2009, compared with a year earlier, according to Audit Bureau of Circulations data.

“The U.S. newspaper publishing market has shrunk more dramatically in recent years than in much of the world as an ongoing downturn in newspapers met the global economic recession. From 2007 to 2009, U.S. newspapers saw an estimated 30% drop in revenues from online and offline circulation and advertising, outpacing other developed nations,” the Pew report states.
Media vie for access, dollars
The decline reported by Pew Research Center and the shift in readership and advertising dollars cited by Mashable.com give credence to Stegall’s view that the city must be more diligent and effective in how it communicates with its residents.

“Our relationship with BocaJump, the reason the city wanted to be involved in that, was in recognition of more and more people will continue to get information from places like BocaJump, and that’s only going to increase,” he said.

Reviewing the list of companies and organizations the city has paid for advertising, Stegall readily acknowledges the growing numbers in favor of new media companies. Further, even money spent with traditional media has shifted with time to specific target groups.

“We’re focusing our efforts in several places – actually, BocaJump is one of the smaller pieces of that,” Stegall said.

Last year, the city paid BocaJump $2,500 a month – a flat monthly fee that totaled $15,000 during BocaJump’s inaugural six months after its launch last summer, Stegall said.

“That’s $2,500 a month for all the advertising we want – unlimited,” Stegall said. “We could put stuff on there all day, every day, for $2,500 … Could we be using BocaJump more than we are right now? Sure, but if you go to an all-you-can-eat, you wish you can take home the crab. We’re using as much as we can, but we will continue to grow it.

“It’s like anything of that type when it’s unlimited,” he continued. “There are some months BocaJump’s coming out on the wrong end because if they’d have gone per diem (on the fee), they’d have made a lot more. And there are months where they come out ahead.”

He also pointed out it's a deal no newspaper would make.

The arrangement is continuing in 2011, with the city budgeting $30,000 to advertise with BocaJump.

But there are larger chunks of Elgin’s advertising budget that target other specific groups – golfers, for example. With three golf courses offering some premiere opportunities, the city wants to focus is its advertising dollars on those venues that will be most effective in attracting new clientele.

New media, again, is playing a role in the city’s golf advertising budget, Stegall acknowledged. Golf course advertising accounted for more than a third of the city’s $316,588.02 budget in 2010.

The explosive growth of new media and the number of people it draws is having an effect on spending decisions related to advertising, Stegall said.

“I think it’s moving away from the print media in certain respects,” he said. “Much more of it, like anything else, is drawn by analytics and cost-benefit analysis.”

That goes back to Stegall’s remarks in the first part of this series, related to the one-size-fits-all approach of disseminating information, or getting the word out.

“It’s about the idea that the mass customization of information doesn’t work any longer,” Stegall said.

“In many cases, it’s difficult to know whether you’ve reached your audiences or not,” he said. “Some of the print media have a thing – their circulation numbers.”

The problem with circulation numbers is they tell you only how many households the overall product is exposed to, not who’s actually looking at the ad on Page 3, for example.

“But when it comes to mobile-based or Web-based, you know if people actually opened it and looked at it, I mean specifically,” Stegall said. “So your ability to demonstrate return on investment is so much greater than if you ran an advertisement in a magazine …”

That becomes even more important in an era of diminished resources, Stegall said.

Internet analytics have given advertisers a way to gauge the effectiveness of their ads that were never available to traditional media.

But that’s not to say traditional media like newspapers are out on the sidelines.

“There’s still a role for it,” Stegall said. “But it’s gone from being our sole, our entire effort, to just one component of a multi-tiered strategy. … Relying on any one thing is not effective. … I need both of them … It has to be multifaceted.”