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| Page One detail, Newseum. |
But check out all the fine print in the New York paper's deal:
Showing posts with label Marketing. Show all posts
Showing posts with label Marketing. Show all posts
Thursday, December 12, 2013
Rochester | All the news that's fine to print
But check out all the fine print in the New York paper's deal:
Sunday, December 08, 2013
Digital Divide | Along a journey to transformation, an aging publisher stumbles at a critical crossroads
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| Gannett's website markets newspapers and other subsidiaries as consumer brands. |
In late October, when CEO Gracia Martore briefed Wall Street stock analysts on Gannett's latest quarterly report, she drew a bright line under another rise in digital revenue -- fresh evidence, she said, the company was successfully weaning itself from its legacy newspaper business.
In fact, the nation's top newspaper publisher started aggressively retailing this new image last winter during the advertising industry's "upfront" market, where traditional print media jockeyed with TV networks for ad dollars. The chief of national sales, Mary Murcko, told the trade publication AdAge: "We are not the media company -- the 100-year-old newspaper company -- people still think we are."
This was a Madison Avenue milestone, the debut of a made-over publisher long dismissed as a relic sidelined by Internet and mobile technologies. Now it was a "media and marketing solutions company" pitching a portfolio of consumer brands. Gannett was finally running with the big dogs.
But behind the scenes, hundreds of pages of newly examined company documents tell a different story, one sharply at odds with Gannett's energetic public relations campaign to burnish its old school profile.
Although digital revenue did rise last quarter, regulatory documents show the growth rate has been retreating all year. It was 29% in the first quarter, 20% in the second, and 12% in the third. It will narrow even more in the current quarter, Gannett warned investors Nov. 6 in a U.S. Securities and Exchange Commission filing.
After jumping when Gannett started launching 78 newspaper paywalls two years ago, digital’s contribution rate to company-wide results only clung to 30% last quarter because overall revenue fell, SEC documents show.
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| Martore |
Revenue from Gannett's freestanding digital businesses -- chiefly, the big employment site CareerBuilder -- has been growing at only low single-digit rates after peaking at 13% in 2011. Year to date, it's up just 4% from a year ago, SEC documents show.
The digital squeeze is all the more worrisome because it comes amid an accelerating decline in the company's still-biggest source of revenue, newspaper advertising, which fell 6% in the last quarter. To be sure, revenue growth pulls back as any company's financial base fattens. Nonetheless, a plateau this soon raises concerns about Gannett's drive to become a digital powerhouse amid bruising competition from more fleet-footed publishers like Facebook and Twitter.
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| Frank Gannett |
The story is also about an entrenched board of directors, the opportunity they missed at a fateful moment, and two executives who led the company to a financial precipice -- only to pull it back before it tipped into oblivion.
Transforming vs. tweaking
There's little doubt Gannett has taken major strides toward its goal of becoming a more digital enterprise. Seven years ago, before digital got pushed to the fore, it was only 5% of annual revenue. Since then, it’s grown by $900 million, to last year's $1.3 billion. That came as the company reported its first annual increase in full-year revenue, $5.4 billion, since 2006.
Gannett has also reduced its reliance on newspapers; their advertising and circulation tumbled to 65% of all company-wide revenue last year vs. 83% in 2006.
The Belo takeover will almost double the number of TV stations to 43, transforming Gannett into a broadcasting company with a side business in newspapers. It will become the nation's fourth-largest owner of big network affiliates, with a bigger footprint in lucrative markets like Texas and the Pacific Northwest. Under the deal, which includes $1.5 billion in cash and assumption of $715 million in debt, broadcasting will eventually account for more than half of earnings, according to the company. Announced in June, the Belo purchase is a major reason Gannett's stock has surged during this year's second half.
From the depths of the recession, when shares fell below $2 as competitors went bust, Gannett is now trading in the mid-$20s; it closed Friday at $25.55. Year to date, it's up 42% vs. a much smaller 27% gain in the S&P 500 index. To be sure, shares were treading water all year before the Belo deal. And other publishers' stocks also have jumped during what's been a sizzling bull market.
The board of directors has boosted the dividend twice since slashing it 90% four years ago. The company has repaid billions in once-crippling debt. And Martore has pledged to return $1.3 billion to stockholders by 2015 through dividends and share repurchases.
But Gannett still faces enormous challenges.
The company remains heavily dependent on its most troubled division, newspapers. Their ad sales have fallen every year since 2006, with no end in sight. That includes digital advertising, too. Indeed, after nearly leveling off the end of 2012, losses have grown in percentage terms during each of the past three quarters.
Paywalls are on track to generate $100 million in new earnings. But that's fueled by the big subscription price increases in 2012 that aren't set to be repeated; Gannett says only that it's now selectively raising prices in some markets. The company's publishing partner in Detroit and elsewhere just announced similar paywall plans, but with little enthusiasm. "Let's be clear," John Paton, CEO of Digital First Media wrote last month. "Paid digital subscriptions are not a long-term strategy. They don't transform anything; they tweak. At best, they are a short-term tactic."
Although Gannett's TV stations contributed mightily to last year's year-over-year revenue increase, that stemmed from record political and summer Olympics ads on the core NBC affiliates. That's a revenue roller coaster only occurring every other year. Meanwhile, broadcasters are just steps behind newspapers in losing ads to rival publishers like Google and Tumblr, says media consultant Ken Doctor.
"Think about how much digital targeting could take away political broadcast money by 2016," he wrote when the Belo deal was announced. At best, "Gannett may have bought itself another three to five years of relative revenue stability."
In any case, it will be well into next year before Belo's operations are fully integrated. And it could then take as long as three years to achieve all the forecast savings by slashing overhead and negotiating more lucrative retransmission agreements to hit earnings targets, according to Gannett.
Digital weapons in Gannett's arsenal are in jeopardy, or are too new to make meaningful contributions.
The USA Today Sports Media Group underwent a shakeup when its founding president, Tom Beusse, resigned unexpectedly in October -- casting doubts on his promise to deliver more than $300 million in new revenue by 2015. USA Today, the company's most famous brand, has failed to attract a big enough audience willing to pay for digital access. Publisher Larry Kramer says only that paywalls are being studied.
Gannett is redesigning all its U.S. news websites and digital apps to boost readership and ads. But more than two years in, only USA Today and a handful of others have made the switch. That's despite a recent forecast they'd be installed in the top 35 markets by year's end. Indeed, at one point, Gannett said all 105 sites would be relaunched as soon as this past February.
The newly christened G/O Digital marketing services unit, which advises small businesses on using social media, is forecast to generate up to $350 million in new sales, but also not until 2015. Revenue there grew 90% in the second quarter and a smaller 70% in the third. Martore has declined to divulge dollar amounts when pressed by analysts.
To be certain, Martore has made no secret of the fact Gannett's strategy will produce uneven results. "It was never meant to be a quick or immediate fix," she said in July. "Our transformation plan is a complex and multifaceted process, and we do not expect linear growth each quarter."
Gannett's corporate communications department did not respond to my questions for this story.
Barbarians at the gate
Gannett's digital push began in earnest in 2005 when the board of directors was casting about for a new CEO to replace Doug McCorkindale. An attorney with no journalism background, McCorkindale had been a company executive 34 years. He was only the fifth CEO since Gannett's start a century before, one in an uninterrupted line of insiders at the core of an insular corporate culture.
Barron's not long before had put McCorkindale on the cover under the headline, "Gannett's Good News." Wall Street's must-read weekly gushed over his empire building. "I'm potentially interested in buying anything in the news, information, advertising and entertainment businesses," he said. "If the Pearson group wanted to sell the Financial Times, I'd look at it very closely. Dow Jones & Co. is a great franchise, and if it ever came into play, I'd be very interested."
And why not? Gannett had the requisite war chest: Annual revenue was headed for a record $8 billion. Earnings would hit $4.90 a share, just three cents shy of a record. From coast to coast, in Guam, and the U.K., Gannett employed 53,000 at hundreds of daily and weekly publications, magazines and the several dozen TV stations.
But time was running out. Publishers and broadcasters were finally facing real competition from a rising number of new, nimble start-ups. Only one year before, 2004, Google launched its IPO, and Mark Zuckerberg started Facebook from a Harvard dorm room. YouTube was brand new.
In 2006, Twitter fired off the first tweet; its recent initial public offering values the microblogging service at $24.5 billion vs. Gannett's $5.8 billion. Instagram would not start until 2010, only to be bought by Facebook two years later for $1 billion cash. (And it had only 13 employees.)
Against that backdrop, Gannett's board might have ignored precedent and hired an outsider with real digital chops as the sixth chief executive. But under McCorkindale, who also chaired the board, directors played it safe. They promoted Craig Dubow, 50, from broadcasting president to lead a company still dominated by newspapers. A University of Texas graduate, Dubow had been an employee 24 years, starting at Denver station KUSA.
Years later, after Gannett's battered stock had plunged to less than five bucks a share, an anonymous Gannett Blog reader recalled Dubow's ascension memorably:
"A myopic board of directors placed a man, a great, very likable man, with a brilliant broadcasting career, but a man that had not spent a minute of his professional life inside a newspaper, in charge of a company with 100 or so newspapers at the worst time in the history for print newspapers. It is like putting at the helm of Titanic a great producer of wheat from Indiana, who had never been at sea before. He could sink the ship even without icebergs."
But McCorkindale, announcing Dubow's promotion in spring 2005, thought otherwise: "Craig has all the skills a 21st century media CEO should have, from highly successful management experience and broad-based knowledge of the digital world to the vision and energy of a top-notch leader."
Dubow got a big raise: His first year's pay soared to $2.4 million from $1 million as head of broadcasting, according to SEC documents. Martore, chief financial officer at the time, became Gannett's No. 2 executive. They would work in lockstep when the company entered free fall.
That Wednesday afternoon, Gannett's stock closed at $75 a share.
Charting digital's new course
Dubow immediately set a new strategic plan focused on digital. Newsrooms were now "Information Centers," reorganized to favor websites over print in a bid to ratchet up traffic and ad revenue. Digital ventures would be nurtured within, starting with a "moms" site aimed at female consumers.
Dubow launched the company's first R&D lab and a Gannett Digital division with this goal, according to his 2006 annual letter to shareholders:
"To move Gannett from a newspaper and television company with affiliated websites to a digital powerhouse, capable of capturing a growing share of what pundits believe will be a pool of Internet advertising dollars in excess of $20 billion by 2008."
Of course, Dubow hadn't inherited an analog dinosaur. The company already had that $400 million in digital revenue -- 5% of all. He closed his letter with a prediction: "With our employees, our discipline and our plan, I am confident 2007 will be as transformative as 2006."
He was right, although surely not as he'd imagined.
Financial panic erupts
The housing bubble floating the economy burst. Gannett was badly exposed in four states among the first to be hit hard: Arizona, California, Florida and Nevada. Combined, they accounted for 40% of the decline in the company's U.S. ad revenue.
The real estate bust spawned a global credit crisis and the Great Recession, slamming Gannett. Complicating matters, the company had accumulated $3.8 billion in long-term debt just as the recession deepened, sapping revenue needed to service it. Some of the debt stemmed from $1.8 billion in Gannett stock buybacks during 2005-2008 at prices averaging $64 a share, according to SEC documents. Most of those buybacks -- $1.3 billion -- were in 2005 alone, the year Dubow took over as CEO and Martore entered her third year as chief financial officer. (Based on Friday's $25.55 closing price, those shares are now worth well less than half as much: $726 million, excluding dividend savings.)
Certainly, other publishers -- the New York Times Co., McClatchy, Lee Enterprises -- had made similar blunders during an industry-wide spending orgy.
In the recession years 2007-2009, Gannett's annual revenue plunged 25%, to $5.6 billion. Dubow and Martore, by now his heir apparent, responded with draconian cost-cutting to stave off creditors: Massive layoffs. Furloughs. Wage cuts. A frozen pension plan. A tattered dividend. With newspaper values collapsing everywhere, Gannett wrote off $8.4 billion worth of its assets in 2008 alone.
To be sure, management took big hits, too. Dubow's annual pay fell to $4.7 million in 2009 vs. $7.5 million in 2007. Still, infuriating employees, the board of directors continued awarding large cash bonuses. In SEC documents covering those years, they cited a long list of accomplishments that specifically included whacking 11,000 jobs.
Dubow doubled down on his digital plan, hiring Gannett's first chief digital officer, Chris Saridakis. Gannett expanded the Moms Like Me network, entertainment site Metromix, and other non-print ventures.
But perhaps most important, that fall Dubow wrested razor-thin majority control of employment classifieds site CareerBuilder from Tribune Co.'s pugnacious CEO, Sam Zell. Dubow had an edge over Zell because Tribune was headed for bankruptcy.
With the $135 million CareerBuilder deal, Gannett made a big change in financial reports to Wall Street. It created a digital-only line consolidating all revenues from CareerBuilder and other standalone businesses.
Significantly, CareerBuilder meant Martore could book 100% of its revenue even though Gannett barely owned 51%. The very next quarter, the digital-only line surged to $170 million from $24 million a year before. In the years that followed, the accounting shift helped Gannett sell itself as more of a digital company, and less about paper and ink.
But it wasn't enough.
Just as the recession eased, some of the most high-profile digital efforts started fraying. In spring 2010, Saridakis quit as chief digital officer after only two years, complaining about the Dubow team's indecisiveness. In a prescient parting letter, he ripped paywall plans. Dubow took a full year to replace him with David Payne.
Payne shuttered the once-celebrated Moms Like Me consumer network after concluding further investment would be a waste. Entertainment site Metromix slumped. Other digital ventures collapsed. The ad services subsidiary PointRoll started churning through CEOs, threatening its hugely profitable pipeline. More recently, an online coupons site, DealChicken, has been retrenching.
A new Crystal Palace chief
In October 2011, with revenue still falling and plagued by back problems, Dubow quit. Reviled for the slash-and-burn tactics that ultimately cost 20,000 jobs on his watch, he retired with an estimated $32 million payout. The board promoted Martore, then 60 years old, to become Gannett's first female CEO.
Like Dubow, she also was an insider, always working at the corporate offices now housed in a glittering complex outside Washington that employees call the Crystal Palace. Martore arrived in 1985 as assistant treasurer, later rising to chief financial officer in 2003. Her bio reads like a classic American bootstrapper story, according to The Washington Post.
"Granddaughter of Italian immigrants," wrote Post correspondent Paul Farhi. "Father died when she was a kid. Held down three jobs to get through Wellesley College. Learned a skill and worked like the dickens."
Martore quickly sought a less imperious image before employees traumatized by waves of layoffs. She ended reserved parking for top executives. And she ditched an executive suite sculpture dubbed the Blue Ball of Death for its role in the infamous firing of three USA Today employees in 2001. A big Red Sox fan, Martore soon enlivened dry analyst meetings with sports metaphors and even jokes.
One of her first, most important jobs was shepherding eagerly awaited newspaper paywalls into 2012. With newspaper ad sales still falling, milking circulation was a must. Management forecast those $100 million in additional annual earnings by 2013 with the paywalls and new apps. With relatively little investment in hiring and marketing, it was like found money.
By then, Gannett had been testing paywalls for two years. Dubow had said early data showed "very interesting results," although he was never more specific. Based on how the company eventually marketed them, however, the pilot tests didn't uncover much demand among the company's bread-and-butter customers: predominantly older, less technology-driven print subscribers.
Gannett gave its paywalls an ungainly name, all-access content subscription model, and sold them in just two flavors: a print subscription including Web and app access for up to around $25 a month. Or digital-only for $12-$15 monthly. Using a "metered" approach, non-subscribers could read a limited number of articles for free before getting prompted to pay.
But the paywalls arrived with an unpleasant surprise: those double-digit subscription price hikes at renewal. Trying to spin the bad news, Gannett said the substantially higher prices included digital access, ignoring the obvious: until then, digital had always been free anyway.
'Free is better than not free'
The roll out revealed a sobering truth. The only way Gannett could really ramp up digital circulation revenue was to force it on three million legacy readers as an embedded cost in their print subscriptions. The vaunted paywalls boiled down to an old-fashioned price increase with a digital veneer. No surprise to Paton, the Digital First CEO, who wrote early this year: "Most paywalls in the U.S. are simply initiatives in subscription price hikes -- bundling digital with print with no clear path for sustainable growth."
Whatever their future, Gannett's jacked-up subscriptions didn't sit well with readers at papers like The Des Moines Register.
In June 2012, they groused during an online chat when Publisher Laura Hollingsworth tried to justify them. "My team and I are prepared to stand by our value and ask our communities to invest in the best news and information and reporting that can be offered," she said.
One reader's quick comeback: "Actually, free is a better value than not free."
Then another: "While I support the paper's move to a paywall for digital content, I calculated my increase at over 40%. It seems that the paper is punishing its print subscribers. Will the Register offer a print-only subscription?"
Hollingsworth said no.
To be sure, paywalls created a second, especially attractive revenue stream: digital-only subscribers. They skewed younger, the very market advertisers covet because they spend lots on electronics, dining, entertainment and home furnishings. Plus, digital subscribers were nearly Gannett's only hope to replace those millions of aging print customers.
At first, Gannett relied almost entirely on word-of-mouth sales. Early results were promising. "The good news," said Bob Dickey, the newspaper division's president, "is our new digital subscribers index younger, male, married with children and more affluent than we first realized, filling an important audience gap for us."
Crawling out on a limb
At the start of this year, Gannett had sold 46,000 digital subscribers across 78 markets. Then in early February, Martore made a strategic mistake: She forecast 250,000 to 300,000 by the end of this year, once Gannett started spending a "not inconsequential" amount on promotion. To be sure, it was a modest goal, averaging fewer than 4,000 per market. Plus, the company already had that running start.
Martore said: "Our focus is to take on new digital-only subscribers, and that's where our focus is going to be in 2013."
The campaign has bombed. By the end of September, the company had netted only 80,000, after some upgraded to print -- leaving Gannett far short of the forecast. All but abandoning the year-end goal, Martore tried moving the goal posts to the number of print readers who had activated digital accounts included with their print subscriptions: 1.5 million, about half of all.
She has called them "paying digital subscribers," comparable to The New York Times' 730,000 digital-only subscriptions sold after erecting its paywall in 2011. Inexplicably, Martore calls that an "apples-to-apples" comparison. (The number of Times digital subscribers has yet to plateau, soaring 28% in this year's third quarter alone.)
Pivoting 180 degrees, Martore dismissed young digital subscribers as barely consequential to measuring paywall success. "Frankly," she told the stock analysts Oct. 21, "that's probably one of the least significant and important metrics that we have used."
But analyst Craig Huber of Huber Research Partners pressed her to confirm Gannett had sold so few. Martore's reply: "If you're just specifically looking at that one small metric, yes, that's exactly what I'm saying."
As these typically deferential meetings go, this was close to taking off the gloves. And it may not be the last time.
Pushing for Gannett's breakup
Wall Street has started nudging Martore to spin off the newspaper business from broadcasting post-Belo. This would create two publicly traded companies, freeing the more nimble TV business plus the CareerBuilder stake and other purely digital businesses from the sluggish publishing division. USA Today and the U.K. Newsquest division, with 17 dailies plus hundreds of weeklies, could be sold separately.
Current shareholders would get stock in the new standalone newspaper company, allowing them to better gauge the relative worth of one business over the other. (In the argot of Wall Street, it's called unlocking shareholder value.) In an alternate scenario, Gannett could sell the papers piecemeal, but that would be a more drawn-out process subject to the vagaries of regional and local markets. In any case, the newspapers, unmoored from the financial resources but also the bureaucracy of a larger enterprise, would need to provide for themselves.
This has been done before. Belo itself split newspapers and TV stations in 2008. News Corp. did the same last July with The Wall Street Journal and dozens of other papers. Tribune Co., also bulking up on TV, has similar plans for the Los Angeles Times and seven others.
Martore isn't sold on the idea. Gannett's U.S. dailies and TV stations occupy a combined 111 markets, offering economies of scale no one else can match, she says. Still, if newspapers become an even bigger drag on growth, analysts will surely push harder for a breakup. Their next scheduled meeting with Martore's team is Wednesday morning at the annual UBS media conference in New York.
Even as she demurs, Martore leaves herself wiggle room, as she always does when analysts ask about future strategy. She and her fellow board members will never say never, she said in October: "We're always looking at different alternatives. . . . What we're in this business to do is to create additional shareholder value. And that's what we're focused on doing."
This much is certain: Martore now has fewer than three years to see her strategy to fruition; she faces mandatory retirement age when she turns 65 in September 2016. The president of the broadcasting division, Dave Lougee, is a logical successor. He's 54 and came to Gannett six years ago from Belo after a long TV career, a professional pedigree that doesn't show tremendous interest in newspapers.
Martore's October analyst teleconference ended, the meeting's mood far less ebullient than the one last March when Gannett mounted its spirited push to sell Madison Avenue on the "New Gannett."
The public relations campaign unfolded in midtown Manhattan with an elaborately orchestrated presentation to ad agencies and marketers during Gannett's first-ever upfront sales meeting. The venue was an auditorium at the AXA Equitable Center where Gannett staged a mock TV talk show it videotaped before an audience of 400.
The company's chief marketing officer, Maryam Banikarim, kicked off the meeting, where Gannett introduced itself as a company not just about newspaper brands, but also social media, video and leading-edge "rich media" ad services. At 44 years old, Banikarim is the more youthful face of the refashioned company, a job she got in 2011 as the first-ever marketing chief. (Martore, scheduled to be there, was home with the flu.)
On stage, the host-for-hire, comedian Andrew Kennedy, threw one of many scripted softball questions: "I thought Gannett was a newspaper company?"
Banikarim feigned a gasp. "Well," she said, "a lot of people think that. There's lots of interesting things about Gannett people don't know."
The Oracle of Omaha
Soon, she told the audience about Warren Buffett's just-published annual letter to Berkshire Hathaway shareholders, where the Nebraska industrialist talked up newspapers in the digital age.
There are good reasons to quote him. As one of the world's top investors, the "Oracle of Omaha" has snapped up more than 65 dailies and weeklies. In his letter, Buffett painted a rosy portrait of the industry's future. (This was before Berkshire dumped all its Gannett stock five months later.)
"My favorite line," Banikarim told the audience, "is where he says, 'wherever there's a pervasive sense of community, a paper with a viable Internet strategy . . . serves the special informational interests of that community and will be indispensable."
She added: "It's like I wrote it myself."
Not quite. Here's a key passage Banikarim left aside:
"We do not believe," Buffett wrote, "that success will come from cutting either the news content or frequency of publication. Indeed, skimpy news coverage will almost certainly lead to skimpy readership. And the less-than-daily publication that is now being tried in some large towns or cities -- while it may improve profits in the short term -- seems certain to diminish the papers’ relevance over time."
And: "Our goal is to keep our papers loaded with content of interest to our readers and to be paid appropriately by those who find us useful, whether the product they view is in their hands or on the Internet."
A postscript
Two months ago, Gannett tore a page from Buffett's playbook, starting a closely watched pilot test of the Butterfly Project. It has restored hundreds of pages of weekly news drained in recent years from four newspapers in New York, Florida, Indiana and Wisconsin. The test includes a new daily local edition of USA Today.
Gannett hopes it will shore up advertising and print circulation when digital subscriptions have failed to gain traction. In the months ahead, it appears likely the initiative will extend to about three dozen of the company's biggest U.S. newspapers. Their combined circulation exceeds 2.3 million weekdays and 3.5 million Sundays.
USA Today, still recovering from a steep dive in ads and circulation, could claim an enormous increase in circulation as well.
It is a huge, surprising bet on print, a sharp turn even as Gannett continues its journey to a digital future that's anything but assured.
Transforming vs. tweaking
There's little doubt Gannett has taken major strides toward its goal of becoming a more digital enterprise. Seven years ago, before digital got pushed to the fore, it was only 5% of annual revenue. Since then, it’s grown by $900 million, to last year's $1.3 billion. That came as the company reported its first annual increase in full-year revenue, $5.4 billion, since 2006.
Gannett has also reduced its reliance on newspapers; their advertising and circulation tumbled to 65% of all company-wide revenue last year vs. 83% in 2006.
The Belo takeover will almost double the number of TV stations to 43, transforming Gannett into a broadcasting company with a side business in newspapers. It will become the nation's fourth-largest owner of big network affiliates, with a bigger footprint in lucrative markets like Texas and the Pacific Northwest. Under the deal, which includes $1.5 billion in cash and assumption of $715 million in debt, broadcasting will eventually account for more than half of earnings, according to the company. Announced in June, the Belo purchase is a major reason Gannett's stock has surged during this year's second half.
From the depths of the recession, when shares fell below $2 as competitors went bust, Gannett is now trading in the mid-$20s; it closed Friday at $25.55. Year to date, it's up 42% vs. a much smaller 27% gain in the S&P 500 index. To be sure, shares were treading water all year before the Belo deal. And other publishers' stocks also have jumped during what's been a sizzling bull market.
The board of directors has boosted the dividend twice since slashing it 90% four years ago. The company has repaid billions in once-crippling debt. And Martore has pledged to return $1.3 billion to stockholders by 2015 through dividends and share repurchases.
But Gannett still faces enormous challenges.
The company remains heavily dependent on its most troubled division, newspapers. Their ad sales have fallen every year since 2006, with no end in sight. That includes digital advertising, too. Indeed, after nearly leveling off the end of 2012, losses have grown in percentage terms during each of the past three quarters.
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| Paton |
Although Gannett's TV stations contributed mightily to last year's year-over-year revenue increase, that stemmed from record political and summer Olympics ads on the core NBC affiliates. That's a revenue roller coaster only occurring every other year. Meanwhile, broadcasters are just steps behind newspapers in losing ads to rival publishers like Google and Tumblr, says media consultant Ken Doctor.
"Think about how much digital targeting could take away political broadcast money by 2016," he wrote when the Belo deal was announced. At best, "Gannett may have bought itself another three to five years of relative revenue stability."
In any case, it will be well into next year before Belo's operations are fully integrated. And it could then take as long as three years to achieve all the forecast savings by slashing overhead and negotiating more lucrative retransmission agreements to hit earnings targets, according to Gannett.
Digital weapons in Gannett's arsenal are in jeopardy, or are too new to make meaningful contributions.
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| USA Today's iPad app is still free. |
Gannett is redesigning all its U.S. news websites and digital apps to boost readership and ads. But more than two years in, only USA Today and a handful of others have made the switch. That's despite a recent forecast they'd be installed in the top 35 markets by year's end. Indeed, at one point, Gannett said all 105 sites would be relaunched as soon as this past February.
The newly christened G/O Digital marketing services unit, which advises small businesses on using social media, is forecast to generate up to $350 million in new sales, but also not until 2015. Revenue there grew 90% in the second quarter and a smaller 70% in the third. Martore has declined to divulge dollar amounts when pressed by analysts.
To be certain, Martore has made no secret of the fact Gannett's strategy will produce uneven results. "It was never meant to be a quick or immediate fix," she said in July. "Our transformation plan is a complex and multifaceted process, and we do not expect linear growth each quarter."
Gannett's corporate communications department did not respond to my questions for this story.
Barbarians at the gate
Gannett's digital push began in earnest in 2005 when the board of directors was casting about for a new CEO to replace Doug McCorkindale. An attorney with no journalism background, McCorkindale had been a company executive 34 years. He was only the fifth CEO since Gannett's start a century before, one in an uninterrupted line of insiders at the core of an insular corporate culture.
Barron's not long before had put McCorkindale on the cover under the headline, "Gannett's Good News." Wall Street's must-read weekly gushed over his empire building. "I'm potentially interested in buying anything in the news, information, advertising and entertainment businesses," he said. "If the Pearson group wanted to sell the Financial Times, I'd look at it very closely. Dow Jones & Co. is a great franchise, and if it ever came into play, I'd be very interested."
And why not? Gannett had the requisite war chest: Annual revenue was headed for a record $8 billion. Earnings would hit $4.90 a share, just three cents shy of a record. From coast to coast, in Guam, and the U.K., Gannett employed 53,000 at hundreds of daily and weekly publications, magazines and the several dozen TV stations.
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| Zuckerberg |
In 2006, Twitter fired off the first tweet; its recent initial public offering values the microblogging service at $24.5 billion vs. Gannett's $5.8 billion. Instagram would not start until 2010, only to be bought by Facebook two years later for $1 billion cash. (And it had only 13 employees.)
Against that backdrop, Gannett's board might have ignored precedent and hired an outsider with real digital chops as the sixth chief executive. But under McCorkindale, who also chaired the board, directors played it safe. They promoted Craig Dubow, 50, from broadcasting president to lead a company still dominated by newspapers. A University of Texas graduate, Dubow had been an employee 24 years, starting at Denver station KUSA.
Years later, after Gannett's battered stock had plunged to less than five bucks a share, an anonymous Gannett Blog reader recalled Dubow's ascension memorably:
"A myopic board of directors placed a man, a great, very likable man, with a brilliant broadcasting career, but a man that had not spent a minute of his professional life inside a newspaper, in charge of a company with 100 or so newspapers at the worst time in the history for print newspapers. It is like putting at the helm of Titanic a great producer of wheat from Indiana, who had never been at sea before. He could sink the ship even without icebergs."
But McCorkindale, announcing Dubow's promotion in spring 2005, thought otherwise: "Craig has all the skills a 21st century media CEO should have, from highly successful management experience and broad-based knowledge of the digital world to the vision and energy of a top-notch leader."
Dubow got a big raise: His first year's pay soared to $2.4 million from $1 million as head of broadcasting, according to SEC documents. Martore, chief financial officer at the time, became Gannett's No. 2 executive. They would work in lockstep when the company entered free fall.
That Wednesday afternoon, Gannett's stock closed at $75 a share.
Dubow immediately set a new strategic plan focused on digital. Newsrooms were now "Information Centers," reorganized to favor websites over print in a bid to ratchet up traffic and ad revenue. Digital ventures would be nurtured within, starting with a "moms" site aimed at female consumers.
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| Dubow in 2006 |
"To move Gannett from a newspaper and television company with affiliated websites to a digital powerhouse, capable of capturing a growing share of what pundits believe will be a pool of Internet advertising dollars in excess of $20 billion by 2008."
Of course, Dubow hadn't inherited an analog dinosaur. The company already had that $400 million in digital revenue -- 5% of all. He closed his letter with a prediction: "With our employees, our discipline and our plan, I am confident 2007 will be as transformative as 2006."
He was right, although surely not as he'd imagined.
Financial panic erupts
The housing bubble floating the economy burst. Gannett was badly exposed in four states among the first to be hit hard: Arizona, California, Florida and Nevada. Combined, they accounted for 40% of the decline in the company's U.S. ad revenue.
The real estate bust spawned a global credit crisis and the Great Recession, slamming Gannett. Complicating matters, the company had accumulated $3.8 billion in long-term debt just as the recession deepened, sapping revenue needed to service it. Some of the debt stemmed from $1.8 billion in Gannett stock buybacks during 2005-2008 at prices averaging $64 a share, according to SEC documents. Most of those buybacks -- $1.3 billion -- were in 2005 alone, the year Dubow took over as CEO and Martore entered her third year as chief financial officer. (Based on Friday's $25.55 closing price, those shares are now worth well less than half as much: $726 million, excluding dividend savings.)
Certainly, other publishers -- the New York Times Co., McClatchy, Lee Enterprises -- had made similar blunders during an industry-wide spending orgy.
In the recession years 2007-2009, Gannett's annual revenue plunged 25%, to $5.6 billion. Dubow and Martore, by now his heir apparent, responded with draconian cost-cutting to stave off creditors: Massive layoffs. Furloughs. Wage cuts. A frozen pension plan. A tattered dividend. With newspaper values collapsing everywhere, Gannett wrote off $8.4 billion worth of its assets in 2008 alone.
To be sure, management took big hits, too. Dubow's annual pay fell to $4.7 million in 2009 vs. $7.5 million in 2007. Still, infuriating employees, the board of directors continued awarding large cash bonuses. In SEC documents covering those years, they cited a long list of accomplishments that specifically included whacking 11,000 jobs.
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| Zell |
With the $135 million CareerBuilder deal, Gannett made a big change in financial reports to Wall Street. It created a digital-only line consolidating all revenues from CareerBuilder and other standalone businesses.
Significantly, CareerBuilder meant Martore could book 100% of its revenue even though Gannett barely owned 51%. The very next quarter, the digital-only line surged to $170 million from $24 million a year before. In the years that followed, the accounting shift helped Gannett sell itself as more of a digital company, and less about paper and ink.
But it wasn't enough.
Just as the recession eased, some of the most high-profile digital efforts started fraying. In spring 2010, Saridakis quit as chief digital officer after only two years, complaining about the Dubow team's indecisiveness. In a prescient parting letter, he ripped paywall plans. Dubow took a full year to replace him with David Payne.
In October 2011, with revenue still falling and plagued by back problems, Dubow quit. Reviled for the slash-and-burn tactics that ultimately cost 20,000 jobs on his watch, he retired with an estimated $32 million payout. The board promoted Martore, then 60 years old, to become Gannett's first female CEO.
Like Dubow, she also was an insider, always working at the corporate offices now housed in a glittering complex outside Washington that employees call the Crystal Palace. Martore arrived in 1985 as assistant treasurer, later rising to chief financial officer in 2003. Her bio reads like a classic American bootstrapper story, according to The Washington Post.
"Granddaughter of Italian immigrants," wrote Post correspondent Paul Farhi. "Father died when she was a kid. Held down three jobs to get through Wellesley College. Learned a skill and worked like the dickens."
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| The much-hated "Blue Ball" sculpture. |
One of her first, most important jobs was shepherding eagerly awaited newspaper paywalls into 2012. With newspaper ad sales still falling, milking circulation was a must. Management forecast those $100 million in additional annual earnings by 2013 with the paywalls and new apps. With relatively little investment in hiring and marketing, it was like found money.
By then, Gannett had been testing paywalls for two years. Dubow had said early data showed "very interesting results," although he was never more specific. Based on how the company eventually marketed them, however, the pilot tests didn't uncover much demand among the company's bread-and-butter customers: predominantly older, less technology-driven print subscribers.
Gannett gave its paywalls an ungainly name, all-access content subscription model, and sold them in just two flavors: a print subscription including Web and app access for up to around $25 a month. Or digital-only for $12-$15 monthly. Using a "metered" approach, non-subscribers could read a limited number of articles for free before getting prompted to pay.
But the paywalls arrived with an unpleasant surprise: those double-digit subscription price hikes at renewal. Trying to spin the bad news, Gannett said the substantially higher prices included digital access, ignoring the obvious: until then, digital had always been free anyway.
'Free is better than not free'
The roll out revealed a sobering truth. The only way Gannett could really ramp up digital circulation revenue was to force it on three million legacy readers as an embedded cost in their print subscriptions. The vaunted paywalls boiled down to an old-fashioned price increase with a digital veneer. No surprise to Paton, the Digital First CEO, who wrote early this year: "Most paywalls in the U.S. are simply initiatives in subscription price hikes -- bundling digital with print with no clear path for sustainable growth."
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| Yesterday's Register, Newseum. |
One reader's quick comeback: "Actually, free is a better value than not free."
Then another: "While I support the paper's move to a paywall for digital content, I calculated my increase at over 40%. It seems that the paper is punishing its print subscribers. Will the Register offer a print-only subscription?"
Hollingsworth said no.
To be sure, paywalls created a second, especially attractive revenue stream: digital-only subscribers. They skewed younger, the very market advertisers covet because they spend lots on electronics, dining, entertainment and home furnishings. Plus, digital subscribers were nearly Gannett's only hope to replace those millions of aging print customers.
At first, Gannett relied almost entirely on word-of-mouth sales. Early results were promising. "The good news," said Bob Dickey, the newspaper division's president, "is our new digital subscribers index younger, male, married with children and more affluent than we first realized, filling an important audience gap for us."
Crawling out on a limb
At the start of this year, Gannett had sold 46,000 digital subscribers across 78 markets. Then in early February, Martore made a strategic mistake: She forecast 250,000 to 300,000 by the end of this year, once Gannett started spending a "not inconsequential" amount on promotion. To be sure, it was a modest goal, averaging fewer than 4,000 per market. Plus, the company already had that running start.
Martore said: "Our focus is to take on new digital-only subscribers, and that's where our focus is going to be in 2013."
The campaign has bombed. By the end of September, the company had netted only 80,000, after some upgraded to print -- leaving Gannett far short of the forecast. All but abandoning the year-end goal, Martore tried moving the goal posts to the number of print readers who had activated digital accounts included with their print subscriptions: 1.5 million, about half of all.
Pivoting 180 degrees, Martore dismissed young digital subscribers as barely consequential to measuring paywall success. "Frankly," she told the stock analysts Oct. 21, "that's probably one of the least significant and important metrics that we have used."
But analyst Craig Huber of Huber Research Partners pressed her to confirm Gannett had sold so few. Martore's reply: "If you're just specifically looking at that one small metric, yes, that's exactly what I'm saying."
As these typically deferential meetings go, this was close to taking off the gloves. And it may not be the last time.
Pushing for Gannett's breakup
Wall Street has started nudging Martore to spin off the newspaper business from broadcasting post-Belo. This would create two publicly traded companies, freeing the more nimble TV business plus the CareerBuilder stake and other purely digital businesses from the sluggish publishing division. USA Today and the U.K. Newsquest division, with 17 dailies plus hundreds of weeklies, could be sold separately.
Current shareholders would get stock in the new standalone newspaper company, allowing them to better gauge the relative worth of one business over the other. (In the argot of Wall Street, it's called unlocking shareholder value.) In an alternate scenario, Gannett could sell the papers piecemeal, but that would be a more drawn-out process subject to the vagaries of regional and local markets. In any case, the newspapers, unmoored from the financial resources but also the bureaucracy of a larger enterprise, would need to provide for themselves.
This has been done before. Belo itself split newspapers and TV stations in 2008. News Corp. did the same last July with The Wall Street Journal and dozens of other papers. Tribune Co., also bulking up on TV, has similar plans for the Los Angeles Times and seven others.
Martore isn't sold on the idea. Gannett's U.S. dailies and TV stations occupy a combined 111 markets, offering economies of scale no one else can match, she says. Still, if newspapers become an even bigger drag on growth, analysts will surely push harder for a breakup. Their next scheduled meeting with Martore's team is Wednesday morning at the annual UBS media conference in New York.
Even as she demurs, Martore leaves herself wiggle room, as she always does when analysts ask about future strategy. She and her fellow board members will never say never, she said in October: "We're always looking at different alternatives. . . . What we're in this business to do is to create additional shareholder value. And that's what we're focused on doing."
This much is certain: Martore now has fewer than three years to see her strategy to fruition; she faces mandatory retirement age when she turns 65 in September 2016. The president of the broadcasting division, Dave Lougee, is a logical successor. He's 54 and came to Gannett six years ago from Belo after a long TV career, a professional pedigree that doesn't show tremendous interest in newspapers.
Martore's October analyst teleconference ended, the meeting's mood far less ebullient than the one last March when Gannett mounted its spirited push to sell Madison Avenue on the "New Gannett."
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| Marketing chief Banikarim, right, with Kennedy at the "upfront." |
The company's chief marketing officer, Maryam Banikarim, kicked off the meeting, where Gannett introduced itself as a company not just about newspaper brands, but also social media, video and leading-edge "rich media" ad services. At 44 years old, Banikarim is the more youthful face of the refashioned company, a job she got in 2011 as the first-ever marketing chief. (Martore, scheduled to be there, was home with the flu.)
On stage, the host-for-hire, comedian Andrew Kennedy, threw one of many scripted softball questions: "I thought Gannett was a newspaper company?"
Banikarim feigned a gasp. "Well," she said, "a lot of people think that. There's lots of interesting things about Gannett people don't know."
The Oracle of Omaha
Soon, she told the audience about Warren Buffett's just-published annual letter to Berkshire Hathaway shareholders, where the Nebraska industrialist talked up newspapers in the digital age.
There are good reasons to quote him. As one of the world's top investors, the "Oracle of Omaha" has snapped up more than 65 dailies and weeklies. In his letter, Buffett painted a rosy portrait of the industry's future. (This was before Berkshire dumped all its Gannett stock five months later.)
She added: "It's like I wrote it myself."
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| Buffett |
"We do not believe," Buffett wrote, "that success will come from cutting either the news content or frequency of publication. Indeed, skimpy news coverage will almost certainly lead to skimpy readership. And the less-than-daily publication that is now being tried in some large towns or cities -- while it may improve profits in the short term -- seems certain to diminish the papers’ relevance over time."
And: "Our goal is to keep our papers loaded with content of interest to our readers and to be paid appropriately by those who find us useful, whether the product they view is in their hands or on the Internet."
* * *
A postscript
Two months ago, Gannett tore a page from Buffett's playbook, starting a closely watched pilot test of the Butterfly Project. It has restored hundreds of pages of weekly news drained in recent years from four newspapers in New York, Florida, Indiana and Wisconsin. The test includes a new daily local edition of USA Today.
Gannett hopes it will shore up advertising and print circulation when digital subscriptions have failed to gain traction. In the months ahead, it appears likely the initiative will extend to about three dozen of the company's biggest U.S. newspapers. Their combined circulation exceeds 2.3 million weekdays and 3.5 million Sundays.
USA Today, still recovering from a steep dive in ads and circulation, could claim an enormous increase in circulation as well.
It is a huge, surprising bet on print, a sharp turn even as Gannett continues its journey to a digital future that's anything but assured.
Tuesday, November 26, 2013
Pop Quiz | Gannett Foundation exec gifts 2012!
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| Illustrations hint at charities favored by top execs. See quiz, below. |
Right in time for Thanksgiving, I've just obtained a copy of the Gannett Foundation's 2012 IRS tax return, the annual report that reveals the highs and lows of the company's philanthropic arm.
All the rest of the foundation's grants go to non-profits in communities where the nation's top newspaper publisher does business. As with many companies, that makes the foundation an extension of Gannett's public relations operation. (Indeed, the foundation's executive director is Debra Goetz, the company's vice president of marketing, according to the IRS return.)
Here's the fine print
The IRS tax returns are public documents under federal open-records laws. They're the most detailed reports charitable foundations must make public every year. For the Gannett Foundation, the documents only disclose names of executives under their special program. The returns don't identify individual employees using GannettMatch. (Read and download a free 116-page copy of the 2012 return.)
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| Payne |
This spreadsheet lists 43 contributions earmarked last year by 15 top executives totaling $215,000. (Chief Financial Officer Victoria Harker directed just $5,000; she came to Gannett only midway through the year.) Click on the "2011" tab at the bottom of the spreadsheet to see a list of the previous year's gifts.
Now for that pop quiz
Which executives chose which non-profits?
- Center for Reproductive Rights: $1,000. (I sure didn't see this one coming: "Our groundbreaking cases before national courts, United Nations committees, and regional human rights bodies have expanded access to reproductive health care, including birth control, safe abortion, prenatal and obstetric care, and unbiased information.")
- University of Texas Foundation for support of the College of Communications' Innovation Fund: $15,000. (Obvious hint: The university's other programs include the Craig A. & Denise W. Dubow Endowed Presidential Scholarship.)
- Indiana University Clown Science Program: $7,500. ("Licensed clown science practitioners provide humor therapy in a variety of settings.")
- Glimmerglass Opera: $1,500. (Show tunes! "The company’s mission is to produce new, little-known and familiar operas and works of music theater in innovative productions.")
- Wellesley College: $10,000. (Longtime readers will say: "Duh!" For everyone else: "Wellesley is known for the thousands of accomplished, thoughtful women it has sent out into the world for over 100 years -- women who are committed to making a difference.")
(Answers are in the comments section, below.)
Earlier: Gannett Foundation gives $1,200 to Focus on the Family, founded by the conservative evangelical minister James Dobson.
Earlier: Gannett Foundation gives $1,200 to Focus on the Family, founded by the conservative evangelical minister James Dobson.
This is now, that was then
The Gannett Foundation is actually the organization's second incarnation. The original was renamed Freedom Forum two decades ago when the late Gannett CEO Al Neuharth, facing the prospect of retirement spent riding an adult-sized tricycle in Cocoa Beach, Fla., got other ideas. (Way, way too complicated to explain here. But you can get a flavor of what's happened since then.)
Thursday, November 21, 2013
Digital Divide | Do as we say and not as we tweet
Around noon today, Gannett's smallest daily newspaper -- the 2,358-circulation Port Clinton News Herald -- issued this Tweet:
Port Clinton has just 10 people in its newsroom and God love 'em, all but the news clerk lists a Twitter handle in the staff directory.
But here's what drew my attention to the hardly overstaffed daily: That tweet up there is the 66th posted to its Twitter page in just the past week alone.
Now I invite you to examine the date on the last tweet posted on Corporate's official Twitter feed, the very same Corporate that's leaning on the Port Clintons to do more with less every day:
So, the score is Port Clinton, 66 -- and Corporate, zip. (By the way, this isn't the first time, either.)
Ohio owes its residents more than $30 million in business tax overpayments. http://t.co/jdiJlxyWiO
— News Herald (@pcnewsherald) November 21, 2013In and off itself, that wouldn't seem especially remarkable. After all, Corporate is pushing dailies of all sizes to shoot video, update Facebook, Instagram, Pinterest, Tumblr -- and tweet, tweet, tweet like there's no tomorrow. This is all in the service of Gannett becoming a digital powerhouse while shedding its image as a fuddy-duddy newspaper publisher.Port Clinton has just 10 people in its newsroom and God love 'em, all but the news clerk lists a Twitter handle in the staff directory.
But here's what drew my attention to the hardly overstaffed daily: That tweet up there is the 66th posted to its Twitter page in just the past week alone.
Now I invite you to examine the date on the last tweet posted on Corporate's official Twitter feed, the very same Corporate that's leaning on the Port Clintons to do more with less every day:
USA TODAY GM @derekjmurphy (2nd from left) was honored as a #CUPCatalysts Change Agent at last night's Media Forum. pic.twitter.com/mYYqErS3CE
— Gannett (@Gannett) November 14, 2013So, the score is Port Clinton, 66 -- and Corporate, zip. (By the way, this isn't the first time, either.)
Tuesday, November 05, 2013
What Banikarim is watching on TV and in movies
In a new AdAge article about what "media pros" read and watch on TV and in movie theaters, Gannett Chief Marketing Officer Maryam Banikarim is featured in a "sponsored" tip -- presumably because USA Today is the story's lead sponsor.
"I love TV," she tells the industry trade site. "Always have. Always will. I have a penchant for mysteries -- Wallander, Homeland and the one I just finished binge watching on a five-hour plane ride: Broadchurch. If we're watching TV as a family it's either Modern Family, The Voice or The X Factor. With the holidays nearing, one of my favorite things to do is go to the movies -- the newest Hunger Games and August Osage County are already on my list. I've been having a good deal of plane time of late, and I just finished Amy Hatvany's Safe with Me. I couldn't put it down. That book is a movie waiting to happen. Wait, did I just come full circle?"
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| Banikarim |
Thursday, October 31, 2013
USA Today will count Butterfly edition circulation; move comes as it once more claims No. 1 circ rank
With print circulation tumbling again, USA Today Publisher Larry Kramer confirmed in a memo today that the struggling paper plans to include in its future circulation reports the new daily section inserted in four community dailies in the Butterfly Project trial that began this month.
That would add 360,000 in print weekday circulation and 579,000 on Sundays, for the first time giving the 31-year-old paper weekend circulation data to pitch to advertisers.
Until today, the paper had not said publicly whether it would include the standalone news section published at those papers in Indianapolis; Fort Myers, Fla.; Appleton, Wisc., and Rochester, N.Y.
The decision means USAT could expand circulation even more if the Butterfly Project is extended to perhaps three dozen of the largest 81 community dailies. They have a combined print circulation of 2.3 million on weekdays and more than 3.5 million Sundays. Corporate hasn't said how long the Butterfly test will be run.
Kramer's memo came as the paper disclosed it is once more claiming the No. 1 spot in newspaper circulation by counting free tablet and mobile phone use data on top of print edition sales. In doing so, the paper would overtake the current leader, The Wall Street Journal, and the second-ranked New York Times.
Muddying circulation waters
But the move makes it even harder to do an apples-to-apples comparison among papers, because the tablet and mobile phone users aren't paying readers. The WSJ and NYT figures are for their more valuable paid print and digital circulation.
Overall, this means circulation data will become even less meaningful to advertisers. USAT has long been dogged by critics who questioned the integrity of the paper's print circulation data because so much of it was to business travelers who got free copies given to them by hotels, airlines and other institutional buyers who bought in bulk at a steep discount.
With its new formula, USAT now says it has 2.9 million in circulation vs. 1.7 million in its March 31 report to the Alliance for Audited Media. That compares with 2.3 million for the WSJ and 1.9 million for the NYT, according to a report today in Capital New York.
However, USAT's new count masks another stunning loss of print circulation for the six months ended Sept. 30. It plunged 19% from a year ago, according to a Poynter Institute report today.
USAT's decision to count tablet and mobile data will help soften the blow of steep circulation losses the paper has forecast as a result of doubling its single-copy price to $2 on Sept. 30.
Digital age challenges
Kramer's memo arrives as the AAM (formerly the Audit Bureau of Circulations) released its Sept. 30 report to members this morning. Effective today, the AAM is no longer making public its top-25 circulation reports, however.
The industry has been wrestling with how to count circulation in the digital age, where papers have gained millions of readers who access websites for free. Historically, the industry had always counted paid circulation as most valuable. The shifting accounting has been a particular challenge for USAT, which doesn't charge readers for digital access to its website and digital apps -- unlike the WSJ and NYT.
AAM Executive Vice President Neal Lulofs told Poynter that the group's traditional method of counting circulation is no longer a meaningful metric for advertisers in today’s "complex multichannel, print/digital, paid/free, branded edition, bundled/paywalled, you-name-it environment."
The Butterfly Project, which has been in the works for more than a year, was seen as another way for USAT to regain traction in circulation and advertising while also giving an editorial boost to Gannett's community dailies. The standalone USAT section provides another platform to sell national advertising and adds dozens of pages of additional foreign and national news to the smaller community papers every week. The section is produced by USAT at its main office in McLean, Va.
USAT first lost the No. 1 spot in the September 2009 when the WSJ started included paid digital subscribers. USAT then fell to No. 3 when the NYT launched its paywall and also counted digital subscribers.
Kramer's new tactic
Counting tablet and phone app usage is a new marketing strategy for the paper under Kramer, the paper's first publisher with a deep digital background. He founded the widely read financial news site MarketWatch before coming to USAT in May 2012. His mandate: to turn around the paper, which had been losing multimillion dollars in advertising amid steep circulation declines as the paper's bread-and-butter customers, business travelers and hotels, abandoned print newspapers.
Four years ago, USAT had downplayed its drop in the rankings by emphasizing that it remained the top selling print paper, partly as a result of its big single-copy sales.
"Single copy newsstand sales," the paper said in a press release, "reflect customers who actively seek out the newspaper each day and pay full newsstand price, which is widely considered the most valuable circulation by advertisers."
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| USAT's honor box |
Until today, the paper had not said publicly whether it would include the standalone news section published at those papers in Indianapolis; Fort Myers, Fla.; Appleton, Wisc., and Rochester, N.Y.
The decision means USAT could expand circulation even more if the Butterfly Project is extended to perhaps three dozen of the largest 81 community dailies. They have a combined print circulation of 2.3 million on weekdays and more than 3.5 million Sundays. Corporate hasn't said how long the Butterfly test will be run.
Kramer's memo came as the paper disclosed it is once more claiming the No. 1 spot in newspaper circulation by counting free tablet and mobile phone use data on top of print edition sales. In doing so, the paper would overtake the current leader, The Wall Street Journal, and the second-ranked New York Times.
Muddying circulation waters
But the move makes it even harder to do an apples-to-apples comparison among papers, because the tablet and mobile phone users aren't paying readers. The WSJ and NYT figures are for their more valuable paid print and digital circulation.
Overall, this means circulation data will become even less meaningful to advertisers. USAT has long been dogged by critics who questioned the integrity of the paper's print circulation data because so much of it was to business travelers who got free copies given to them by hotels, airlines and other institutional buyers who bought in bulk at a steep discount.
With its new formula, USAT now says it has 2.9 million in circulation vs. 1.7 million in its March 31 report to the Alliance for Audited Media. That compares with 2.3 million for the WSJ and 1.9 million for the NYT, according to a report today in Capital New York.
However, USAT's new count masks another stunning loss of print circulation for the six months ended Sept. 30. It plunged 19% from a year ago, according to a Poynter Institute report today.
USAT's decision to count tablet and mobile data will help soften the blow of steep circulation losses the paper has forecast as a result of doubling its single-copy price to $2 on Sept. 30.
Digital age challenges
Kramer's memo arrives as the AAM (formerly the Audit Bureau of Circulations) released its Sept. 30 report to members this morning. Effective today, the AAM is no longer making public its top-25 circulation reports, however.
The industry has been wrestling with how to count circulation in the digital age, where papers have gained millions of readers who access websites for free. Historically, the industry had always counted paid circulation as most valuable. The shifting accounting has been a particular challenge for USAT, which doesn't charge readers for digital access to its website and digital apps -- unlike the WSJ and NYT.
AAM Executive Vice President Neal Lulofs told Poynter that the group's traditional method of counting circulation is no longer a meaningful metric for advertisers in today’s "complex multichannel, print/digital, paid/free, branded edition, bundled/paywalled, you-name-it environment."
The Butterfly Project, which has been in the works for more than a year, was seen as another way for USAT to regain traction in circulation and advertising while also giving an editorial boost to Gannett's community dailies. The standalone USAT section provides another platform to sell national advertising and adds dozens of pages of additional foreign and national news to the smaller community papers every week. The section is produced by USAT at its main office in McLean, Va.
USAT first lost the No. 1 spot in the September 2009 when the WSJ started included paid digital subscribers. USAT then fell to No. 3 when the NYT launched its paywall and also counted digital subscribers.
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| Kramer |
Counting tablet and phone app usage is a new marketing strategy for the paper under Kramer, the paper's first publisher with a deep digital background. He founded the widely read financial news site MarketWatch before coming to USAT in May 2012. His mandate: to turn around the paper, which had been losing multimillion dollars in advertising amid steep circulation declines as the paper's bread-and-butter customers, business travelers and hotels, abandoned print newspapers.
Four years ago, USAT had downplayed its drop in the rankings by emphasizing that it remained the top selling print paper, partly as a result of its big single-copy sales.
"Single copy newsstand sales," the paper said in a press release, "reflect customers who actively seek out the newspaper each day and pay full newsstand price, which is widely considered the most valuable circulation by advertisers."
Tuesday, October 08, 2013
USAT | Watch the new series of "TV" commercials
USA Today published three new "television" commercials yesterday on its YouTube page. (I use those quotation marks because I'm not exactly sure what you call video commercials when they appear on multiple platforms.) So far, each one has been watched fewer than 400 times.
Have these commercials started appearing anywhere else? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.
Have these commercials started appearing anywhere else? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.
Wednesday, August 14, 2013
Stop me if you've heard this one before. (Please!)
Yesterday, Corporate unveiled a new brand name for its digital marketing services unit, in a press release with this headline: "New Branding Signals Gannett’s Evolution as a Full-Service Media and Marketing Company with Suite of Best in Class Digital Products."
As someone who reads a lot of Crystal Palace communications, I couldn't help but groan. That's a superlative used so frequently, I think it's on someone's save-get key. (Ask your grandfather what those were.)
Curious, I took a quick stroll through Gannett Blog's archives plus the Web -- and confirmed my suspicions:
"Gannett is a leading international media and marketing solutions company, delivering best-in-class content and services across an integrated, multi-platform portfolio." -- Annual Report to shareholders, Jan. 2, 2013.
"The mobile team is responsible for developing a strategy for delivering best-in-class mobile solutions scalable throughout multiple Gannett companies including USA Today." -- job description, Aug. 6, for a senior HTML5 developer.
"Our continued laser-focus to build best in class products and content will keep them coming back." -- Publisher Larry Kramer, April 30, on The New York Times passing USAT in circulation.
"During her time at Gannett, Roxanne has been instrumental in helping Gannett recruit and retain top-notch, best-in-class talent." -- CEO Gracia Martore, May 1, 2012, announcing the retirement of HR chief Roxanne Horning.
"This is an exciting time for Gannett, as we leverage our many competitive advantages to deliver best-in-class content and services across an integrated, multi-platform portfolio." -- Martore, April 12, 2012, in a press release announcing an executive appointment.
"It is a privilege to run Gannett Broadcasting because thanks to a group of best-in-class professionals, we are exceptionally strong." -- Broadcasting President Dave Lougee, Feb. 22, 2012, speaking to Wall Street analysts during a conference.
"Both of us were brought in to build centrally best in class capabilities." -- Chief Marketing Officer Maryam Banikarim, referencing herself and Chief Digital Officer David Payne, at the same February analyst conference.
"This is an exciting opportunity to help build and motivate a high performing, integrated, best in class, corporate communication function at one of the largest and highly respected media organizations." -- Corporate, Nov. 17, 2011, in a job description advertising for the company's next head of public relations.
"We have to prioritize our efforts and focus on the digital products and services where we can be truly best in class." -- Chief Digital Officer David Payne and others, Oct. 6, 2011, announcing the shuttering of Moms Like Me.
"HighSchoolSports.net will offer national and local advertisers an exciting, best-of-class vehicle to reach teens and parents." -- Gannett Digital Ventures President Jack Williams, Oct. 17, 2007, announcing that website's purchase.
Not to be outdone...
Anonymous@12:05 p.m. offered their own take on June 11, 2012, about Corporate's adoption of purpose-ology:
Kinda related: the very funny mocumentary Best in Show (2000); watch the trailer.
Curious, I took a quick stroll through Gannett Blog's archives plus the Web -- and confirmed my suspicions:
"Gannett is a leading international media and marketing solutions company, delivering best-in-class content and services across an integrated, multi-platform portfolio." -- Annual Report to shareholders, Jan. 2, 2013.
"The mobile team is responsible for developing a strategy for delivering best-in-class mobile solutions scalable throughout multiple Gannett companies including USA Today." -- job description, Aug. 6, for a senior HTML5 developer.
"Our continued laser-focus to build best in class products and content will keep them coming back." -- Publisher Larry Kramer, April 30, on The New York Times passing USAT in circulation.
"During her time at Gannett, Roxanne has been instrumental in helping Gannett recruit and retain top-notch, best-in-class talent." -- CEO Gracia Martore, May 1, 2012, announcing the retirement of HR chief Roxanne Horning.
"This is an exciting time for Gannett, as we leverage our many competitive advantages to deliver best-in-class content and services across an integrated, multi-platform portfolio." -- Martore, April 12, 2012, in a press release announcing an executive appointment.
"It is a privilege to run Gannett Broadcasting because thanks to a group of best-in-class professionals, we are exceptionally strong." -- Broadcasting President Dave Lougee, Feb. 22, 2012, speaking to Wall Street analysts during a conference.
"Both of us were brought in to build centrally best in class capabilities." -- Chief Marketing Officer Maryam Banikarim, referencing herself and Chief Digital Officer David Payne, at the same February analyst conference.
"This is an exciting opportunity to help build and motivate a high performing, integrated, best in class, corporate communication function at one of the largest and highly respected media organizations." -- Corporate, Nov. 17, 2011, in a job description advertising for the company's next head of public relations.
"We have to prioritize our efforts and focus on the digital products and services where we can be truly best in class." -- Chief Digital Officer David Payne and others, Oct. 6, 2011, announcing the shuttering of Moms Like Me.
"HighSchoolSports.net will offer national and local advertisers an exciting, best-of-class vehicle to reach teens and parents." -- Gannett Digital Ventures President Jack Williams, Oct. 17, 2007, announcing that website's purchase.
Not to be outdone...
Anonymous@12:05 p.m. offered their own take on June 11, 2012, about Corporate's adoption of purpose-ology:
"We are best in class. Kindergarten class."
Kinda related: the very funny mocumentary Best in Show (2000); watch the trailer.
Tuesday, August 13, 2013
The new brand for digital marketing services: G/O
Gannett revealed that G/O Digital brand name today for a unit that's been around at least since February 2012. That's when the company said it expected digital marketing services would generate an additional $275 million to $350 million in annual revenue by 2015.
In a press release, GCI said the new name "embodies the quick, precise impact" its services would deliver to national, regional and small to mid-sized businesses.
A moratorium, please?
The press release includes this subheadline: "New Branding Signals Gannett’s Evolution as a Full-Service Media and Marketing Company with Suite of Best in Class Digital Products." (Emphasis added.)
A deal: I'll promise to never refer to GCI's publicists as "flacks" if they'll stop using "best in class" in press releases.
Not to be confused with...
G/O Corp., which custom designs products for the nuclear power industry, shipyards and various industrial and pharmaceutical accounts. (Perhaps this is where Homer Simpson gets his work clothes at the Springfield Nuclear Power Plant.)
Slightly related: One of my favorite movies is 1999's Go, which gets a 92% fresh rating on Rotten Tomatoes. Watch the possibly NSFW trailer.
In a press release, GCI said the new name "embodies the quick, precise impact" its services would deliver to national, regional and small to mid-sized businesses.
A moratorium, please?
The press release includes this subheadline: "New Branding Signals Gannett’s Evolution as a Full-Service Media and Marketing Company with Suite of Best in Class Digital Products." (Emphasis added.)
A deal: I'll promise to never refer to GCI's publicists as "flacks" if they'll stop using "best in class" in press releases.
G/O Corp., which custom designs products for the nuclear power industry, shipyards and various industrial and pharmaceutical accounts. (Perhaps this is where Homer Simpson gets his work clothes at the Springfield Nuclear Power Plant.)
Slightly related: One of my favorite movies is 1999's Go, which gets a 92% fresh rating on Rotten Tomatoes. Watch the possibly NSFW trailer.
Monday, July 29, 2013
In big tech story, the score is Google: 6, Gannett: 0
I'm talking about yesterday's news that the world's No. 2 and No. 3 advertising agencies are merging to become No. 1, a global behemoth with $23 billion in annual revenue.
The headline over The New York Times' Page One story about the hookup of Omnicom and Publicis says it all: "Two ad giants chasing Google in merger deal." No wonder. Google's name appears six times in the story.
Newspapers? Zip. Gannett? Also, zip.
Indeed, I didn't see newspapers mentioned even once in any coverage by (ironically) the other national U.S. newspapers: The Wall Street Journal and GCI's own flagship, USA Today.
One NYT paragraph shows why this is actually a technology story, rather than one strictly about advertising: Between them, Omnicom and Publicis accounted for $22.7 billion in revenue last year, more than the next highest ad firm, WPP. But no ad company comes close to the $50 billion in revenue that Google made last year, largely on the strength of its advertising business.
GCI's Achilles' heel
And those other ad companies, of course, include GCI. Last year, the company's newspapers and other print publications sold $2.4 billion in advertising, making that it's single-biggest source of revenue. Throw in advertising from the broadcasting division, and it rises to $3.4 billion. Heck, GCI's total 2012 revenue, which includes $1.1 billion in circulation, was still a drop in Google's bucket: $5.4 billion.
Newspaper ad revenue is the Achilles' heel. In the second quarter, it fell 5.3%, representing an acceleration in the rate of decline over the past two years, according to last week's financial report.
The challenge for Omnicom and Publicis is that more and more advertisers are bypassing agencies (and newspapers, TV stations and other media) in favor of direct appeals to consumers via online publishers including Google, Facebook and Twitter.
"Advertisers like Nike, Comcast, Progressive and Procter & Gamble," the NYT says, "are now using automated exchanges -- fast-paced, algorithmic bidding systems -- to target individual consumers rather than the mass audiences that broadcasters and publishers serve up."
To be sure, GCI isn't sitting still. For one thing, the nation's No. 1 newspaper publisher can't run fast enough from its newspaper and news roots. The "About Gannett" boilerplate at the bottom of every company press release illustrates that perfectly. In last week's earnings release, it said:
"Gannett is an international media and marketing solutions company that informs and engages more than 100 million people every month through its powerful network of broadcast, digital, mobile and publishing properties. Our portfolio of trusted brands offers marketers unmatched local-to-national reach and customizable, innovative marketing solutions across any platform. Gannett is committed to connecting people -- and the companies who want to reach them -- with their interests and communities."
Compare that to 2011
Here's the boilerplate on the day GCI said it had hired its first chief marketing officer (emphasis added):
"Gannett is an international news and information company operating on multiple platforms including the Internet, mobile, newspapers, magazines and TV stations. Gannett is an Internet leader with hundreds of newspaper and TV web sites; CareerBuilder.com, the nation's top employment site; USATODAY.com; and more than 80 local MomsLikeMe.com sites. Gannett publishes 82 daily U.S. newspapers, including USA TODAY, the nation's largest-selling daily newspaper, and more than 600 magazines and other non-dailies including USA WEEKEND. Gannett also operates 23 television stations in 19 U.S. markets. Gannett subsidiary Newsquest is one of the UK's leading regional community news providers, with 17 daily paid-for titles, more than 200 weekly newspapers, magazines and trade publications, and a network of web sites."
Near as I can tell, that press release about CMO Maryam Banikarim was the last time "newspapers" and "news" appeared in the boilerplate.
Now, GCI emphasizes its own network: a collection of sites drawing an average of about 55 million unique visitors each month. To be clear, nearly half of those -- 24 million -- are at CareerBuilder, the giant employment site GCI controls with minority partners Tribune and McClatchy.
And within that broader network, the company is racing to establish a big subsidiary: the USA Today Sports Media Group, which sews together all the sports content from USAT, the 23 TV stations, and 81 U.S. community dailies. That group is supposed to generate more than $300 million in additional annual revenue by 2015.
A too-slow digital shift
There's also the still nascent Gannett Digital Marketing Services division, which advises small and mid-size businesses on social media and other mobile and Web strategies. It's forecast to add between $275 million and $350 million, also by 2015, the company said early last year.
Meanwhile, GCI is nearing the relaunch of its mobile and news websites to create a more uniform experience and easier buying opportunity for advertisers. That could help with national ad sales, where last week GCI appointed a new vice president, Howard Griffin, in the community newspaper division.
But the drawn-out timetable for the digital relaunch project illustrates the challenges the company faces in dealing with Google, Facebook and other more nimble 21st century media companies. GCI announced plans for the relaunch in August 2011. Now, two years later, the company's best forecast is for a relaunch in only the top 35 markets to be "largely completed" by the end of 2013. That slow-mo pace was revealed in last week's quarterly conference call with Wall Street analysts.
The Omnicom-Publicis deal is the traditional advertising industry's push back against Google and a growing number of other digital competitors. But it's not an effort to shore up newspapers or TV -- industries that are increasingly 20th century news.
Newspapers? Zip. Gannett? Also, zip.
Indeed, I didn't see newspapers mentioned even once in any coverage by (ironically) the other national U.S. newspapers: The Wall Street Journal and GCI's own flagship, USA Today.
GCI's Achilles' heel
And those other ad companies, of course, include GCI. Last year, the company's newspapers and other print publications sold $2.4 billion in advertising, making that it's single-biggest source of revenue. Throw in advertising from the broadcasting division, and it rises to $3.4 billion. Heck, GCI's total 2012 revenue, which includes $1.1 billion in circulation, was still a drop in Google's bucket: $5.4 billion.
Newspaper ad revenue is the Achilles' heel. In the second quarter, it fell 5.3%, representing an acceleration in the rate of decline over the past two years, according to last week's financial report.
The challenge for Omnicom and Publicis is that more and more advertisers are bypassing agencies (and newspapers, TV stations and other media) in favor of direct appeals to consumers via online publishers including Google, Facebook and Twitter.
"Advertisers like Nike, Comcast, Progressive and Procter & Gamble," the NYT says, "are now using automated exchanges -- fast-paced, algorithmic bidding systems -- to target individual consumers rather than the mass audiences that broadcasters and publishers serve up."
To be sure, GCI isn't sitting still. For one thing, the nation's No. 1 newspaper publisher can't run fast enough from its newspaper and news roots. The "About Gannett" boilerplate at the bottom of every company press release illustrates that perfectly. In last week's earnings release, it said:
"Gannett is an international media and marketing solutions company that informs and engages more than 100 million people every month through its powerful network of broadcast, digital, mobile and publishing properties. Our portfolio of trusted brands offers marketers unmatched local-to-national reach and customizable, innovative marketing solutions across any platform. Gannett is committed to connecting people -- and the companies who want to reach them -- with their interests and communities."
Compare that to 2011
Here's the boilerplate on the day GCI said it had hired its first chief marketing officer (emphasis added):
"Gannett is an international news and information company operating on multiple platforms including the Internet, mobile, newspapers, magazines and TV stations. Gannett is an Internet leader with hundreds of newspaper and TV web sites; CareerBuilder.com, the nation's top employment site; USATODAY.com; and more than 80 local MomsLikeMe.com sites. Gannett publishes 82 daily U.S. newspapers, including USA TODAY, the nation's largest-selling daily newspaper, and more than 600 magazines and other non-dailies including USA WEEKEND. Gannett also operates 23 television stations in 19 U.S. markets. Gannett subsidiary Newsquest is one of the UK's leading regional community news providers, with 17 daily paid-for titles, more than 200 weekly newspapers, magazines and trade publications, and a network of web sites."
Near as I can tell, that press release about CMO Maryam Banikarim was the last time "newspapers" and "news" appeared in the boilerplate.
Now, GCI emphasizes its own network: a collection of sites drawing an average of about 55 million unique visitors each month. To be clear, nearly half of those -- 24 million -- are at CareerBuilder, the giant employment site GCI controls with minority partners Tribune and McClatchy.
And within that broader network, the company is racing to establish a big subsidiary: the USA Today Sports Media Group, which sews together all the sports content from USAT, the 23 TV stations, and 81 U.S. community dailies. That group is supposed to generate more than $300 million in additional annual revenue by 2015.
A too-slow digital shift
There's also the still nascent Gannett Digital Marketing Services division, which advises small and mid-size businesses on social media and other mobile and Web strategies. It's forecast to add between $275 million and $350 million, also by 2015, the company said early last year.
Meanwhile, GCI is nearing the relaunch of its mobile and news websites to create a more uniform experience and easier buying opportunity for advertisers. That could help with national ad sales, where last week GCI appointed a new vice president, Howard Griffin, in the community newspaper division.
But the drawn-out timetable for the digital relaunch project illustrates the challenges the company faces in dealing with Google, Facebook and other more nimble 21st century media companies. GCI announced plans for the relaunch in August 2011. Now, two years later, the company's best forecast is for a relaunch in only the top 35 markets to be "largely completed" by the end of 2013. That slow-mo pace was revealed in last week's quarterly conference call with Wall Street analysts.
The Omnicom-Publicis deal is the traditional advertising industry's push back against Google and a growing number of other digital competitors. But it's not an effort to shore up newspapers or TV -- industries that are increasingly 20th century news.
Tuesday, July 02, 2013
When in doubt, brand it with every name available
As you can see in the screenshot, above, the video about 19 Arizona firefighters who died Sunday battling a brushfire carries all three brand names.
Related: Republic staffers debate propriety toothpaste preroll with fire deaths video.
Friday, May 17, 2013
Marketing | That was then, and this is now
"This is an exciting time to join Gannett. There’s a fundamental shift in the relationship between consumers and media today, and Gannett is leading the way in transforming how it serves the needs of consumers."
-- Emma Gilding, quoted in an Aug. 6, 2012, press release, when Corporate announced that she'd been hired as vice president of brand research and strategy, reporting to Chief Marketing Officer Maryam Banikarim. Yesterday, nine months later, she left that job, according to a Gannett Blogger. On her LinkedIn profile, she now lists herself as a "principle" at GildingBerry&co.
Tuesday, April 09, 2013
I had to read this twice to believe it was true
L’Oréal, the cosmetics company, has a staff of 400 people who post content on Facebook every day, according to Marc Menesguen, the company’s chief marketing officer.
“It’s a lot of work and requires a lot of commitment,” he says. “The digital revolution is on at L’Oréal.”
Wednesday, March 13, 2013
Video | Watch this one from the Gannett 'upfront'
The 7:25 minute video shows host and comedian Andrew Kennedy interviewing the first "guest" on the talk show-like presentation to potential advertisers: Maryam Banikarim, the company's chief marketing officer. It's one of nine from the event uploaded to Gannett's YouTube page.
Monday, February 11, 2013
USAT | Ex-AOL executive named general manager; challenges include flagging advertising, circulation
USA Today disclosed today that it hired a former AOL Huffington Post Media Group executive, Derek Murphy, as general manager in charge of day-to-day operations. Murphy, who was GM of multicultural media at AOL, replaces Susie Ellwood, who resigned three months ago to become publisher of Cox Media's Austin American-Statesman.
Murphy reports to Larry Kramer, who has been publisher of Gannett's best-known brand since May. USAT did not provide his age in its announcement or in a story on its website about his appointment.
USAT was vague about Murphy's specific responsibilities. Kramer was quoted as saying that his "role will be to manage the transition of USA Today to a digital-first enterprise. He will lead a dynamic senior leadership team to grow the USA Today brand."
Even before Kramer's arrival, however, several of USAT's traditional key functions were spun off to other Gannett executives or divisions -- including advertising sales and marketing, which are managed by Chief Marketing Officer Maryam Banikarim's office, and production and circulation, which are now part of Gannett Publishing Services. That leaves a relatively diminished portfolio anchored by editorial for Murphy and Kramer to manage in the struggling paper's current turnaround.
Advertising, circulation fall
USAT faces challenges on several fronts, starting with advertising revenue. Gannett's national advertising sales, which are a proxy for USAT's financial health, continue to decline, albeit at a smaller rate. In the fourth quarter, national ad revenue fell 6.4%, GCI disclosed last week. While that includes the entire company, USAT accounts for a disproportionate share.
The trend is improving. National fell 7.6% in the third quarter; 18.2% in the second quarter, as Kramer was coming on, and 14.5% in the first quarter.
Circulation is another weak spot. USAT's circulation fell 3.9% to 1.7 million during the six months ended Sept. 30, a period when its two national rivals reported gains. The New York Times' soared 40%, to 1.6 million, on the strength of digital subscriptions instituted with a paywall. The Wall Street Journal's jumped 9.4% to 2.3 million, also due to digital subscriptions.
Lone among Gannett's dailies, USAT does not charge for digital access, and it has not publicly disclosed any plans to do so. In September, the paper redesigned its website, digital and print editions.
A top minority exec
Murphy's educational background is unusual for a publishing executive, especially in newspapering: He holds a bachelor of science degree in engineering and management from Tufts University, according to today's announcement. It's unclear which type of engineering Murphy studied, however.
Murphy is African-American, and his appointment immediately makes him one of Gannett's highest-level minority executives when the company's management ranks have been growing less diverse at the most senior levels. Historically, GCI has led the newspaper industry in workforce diversity efforts.
At AOL, he led the "overall strategy, audience development, operational and business performance for the launch and management of several new multicultural websites and related content and advertising partnerships," today's announcement says. "Murphy joined Huffington Post in 2009 as senior vice president, business development, where he was responsible for structuring strategic partnerships to scale the business and deliver material growth in content offerings, brand presence, audience engagement and revenues."
Before that, he was vice president, business development and operations for CNN News Group, where he developed strategic content syndication, marketing and distribution partnerships for CNN digital and select CNN television network properties.
 |
| Murphy |
USAT was vague about Murphy's specific responsibilities. Kramer was quoted as saying that his "role will be to manage the transition of USA Today to a digital-first enterprise. He will lead a dynamic senior leadership team to grow the USA Today brand."
Even before Kramer's arrival, however, several of USAT's traditional key functions were spun off to other Gannett executives or divisions -- including advertising sales and marketing, which are managed by Chief Marketing Officer Maryam Banikarim's office, and production and circulation, which are now part of Gannett Publishing Services. That leaves a relatively diminished portfolio anchored by editorial for Murphy and Kramer to manage in the struggling paper's current turnaround.
Advertising, circulation fall
USAT faces challenges on several fronts, starting with advertising revenue. Gannett's national advertising sales, which are a proxy for USAT's financial health, continue to decline, albeit at a smaller rate. In the fourth quarter, national ad revenue fell 6.4%, GCI disclosed last week. While that includes the entire company, USAT accounts for a disproportionate share.
The trend is improving. National fell 7.6% in the third quarter; 18.2% in the second quarter, as Kramer was coming on, and 14.5% in the first quarter.
Circulation is another weak spot. USAT's circulation fell 3.9% to 1.7 million during the six months ended Sept. 30, a period when its two national rivals reported gains. The New York Times' soared 40%, to 1.6 million, on the strength of digital subscriptions instituted with a paywall. The Wall Street Journal's jumped 9.4% to 2.3 million, also due to digital subscriptions.
Lone among Gannett's dailies, USAT does not charge for digital access, and it has not publicly disclosed any plans to do so. In September, the paper redesigned its website, digital and print editions.
A top minority exec
Murphy's educational background is unusual for a publishing executive, especially in newspapering: He holds a bachelor of science degree in engineering and management from Tufts University, according to today's announcement. It's unclear which type of engineering Murphy studied, however.
Murphy is African-American, and his appointment immediately makes him one of Gannett's highest-level minority executives when the company's management ranks have been growing less diverse at the most senior levels. Historically, GCI has led the newspaper industry in workforce diversity efforts.
At AOL, he led the "overall strategy, audience development, operational and business performance for the launch and management of several new multicultural websites and related content and advertising partnerships," today's announcement says. "Murphy joined Huffington Post in 2009 as senior vice president, business development, where he was responsible for structuring strategic partnerships to scale the business and deliver material growth in content offerings, brand presence, audience engagement and revenues."
Before that, he was vice president, business development and operations for CNN News Group, where he developed strategic content syndication, marketing and distribution partnerships for CNN digital and select CNN television network properties.
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