Where USF faculty, students and graduates are invited to talk about journalism and its problems and opportunities. This blog is not affiliated with the University of San Francisco, nor is the university responsible for any of the opinions expressed herein -- though it is certainly responsible for the people who entertain those opinions, having educated them. They make us proud.

Thursday, September 15, 2005

Nelson Toriano: I Worked for the San Francisco Chronicle (A True Story)

Nelson tells it like it is, and how it should be.

Well, it’s about damn time we have a journalism major!! I would’ve declared that a long time ago. Since graduation and completing my service as the Advertising Manager at the Foghorn, I went directly to work at the San Francisco Chronicle. A year and half later, I left my position as a Retail Advertising Account Executive. But how to get into that company was a triumph in itself.

Imagine me, fresh out of college, sitting at the head of a long mahogany table in this opulent conference room. On either side were two advertising directors and two advertising vice-presidents. And my job for the next hour is to walk them through my resume, bullet point by bullet point, and tell them why they should hire me … as their INTERN! (It wasn’t even for a permanent position?!) Mind you, this panel interview follows five other interviews (two of which were for other positions) and four tests, which included a personality test. Of course, I was sweating bullets (even during the personality test). But during the interview, I remembered one thing I learned in journalism: get these people talking. So I turned the interview back on them, asked them a bunch of questions on what they do, what they like, and flattered them a little bit. Soon enough, all five of us were laughing, and I fulfilled my intention: they felt so comfortable with me that we kept talking and talking. They liked me, so I got the job.

Although, I might be one of the few students who are more interested in the business side of journalism than the writing side, the training I got in journalism courses works in everyday situations—like a job interview. But after working in advertising and seeing how it constitutes 60% of the paper, generates the financial backbone of the newspaper industry, and how ruthless people are, I feel that it’s important for the journalism major to offer a seminar on advertising.

One thing I’ve learned along the way is that production of newsprint is declining. However, the newspaper as a company, may still survive only if it keeps up with the latest trends in advertising.

San Francisco Bay Area, Los Angeles, and New York are among the largest markets in the nation for newspapers. All three had the biggest decreases in subscribers. On a grand scale, that results in downsizing (which I personally was a victim of), thinner newspapers (because of less content), and a slow tarnishing of the newspaper brand in the market. People will first associate the newspaper brand with the actual newsprint before they associate it to the newspaper’s website or any other medium. So if the public sees fewer newspapers, people automatically think the newspaper is not doing so well, which may or may not be the case. But to even cause mere curiosity is not a good thing for a newspaper company that loves to uphold a steadfast image.

One contributing factor is advertisers do not receive the return on their investments in all newspaper advertising. For example, to put one ad in the Main News section means that one advertiser will be advertising to the whole Bay Area. But I worked with a laser hair removal clinic in Marin County, and they didn’t care about advertising to the South Bay. Instead, they preferred niche marketed publications, specifically those that catered just to Marin County. In addition, while Main News is the section that every reader reads, it is also the most expensive. So the laser hair removal clinic liked the niche sections, like Friday, a regional section of the newspaper whose editorial content is specifically about Marin County. Moreover, this section is cheaper than Main News because their distribution is zoned just for Marin County, not the whole Bay Area. On the other hand, the newspaper company is generating less revenue from niche marketed sections. And while niche marketed publications work for the advertisers’ benefit, advertisers turn to other magazines and local newspapers whose readers who will most likely be interested in their product. Therefore, they are spending their advertising dollars on variety of publications instead of just one medium, like the Chronicle. On a side note, the advertising department of newspapers sometimes markets a specific writer whose beat matches the lifestyle of a business’ consumer. There are many times I was pitching to home-related advertisers, and said that their advertisement will be placed alongside this well-known and sought-after home-improvement columnist. The advertising department will use beat writers as marketing tools.

Secondly, advertising online is far cheaper than print altogether. Advertisers invest their money in skyscrapers and banners, and place them on web pages the contents of which caters to a specific audience (again, niche marketing). For example, restaurants rarely advertise in print because they usually have a small budget for advertising. And small advertisements get totally lost amongst the newspaper’s heavy copy. But the restaurant will want to pay for a skyscraper on a webpage about food reviews, and that skyscraper is linked to the restaurant’s webpage, where the viewer can reserve a table online. In addition, the newspaper’s marketing team tracks the web page visitor as to when they clicked, how often they clicked, sometimes down to that visitor’s email (if the visitor is required to be a registered user to use that newspaper’s website). All this information shows the advertiser how effective their advertisement is. And if the advertiser is confident that the skyscraper is working, that advertiser spends more money on advertising. Plus, advertisers are getting exposure to people who never buy the newspaper but who only read their news online, like students and those with the 9-5 jobs. Therefore advertisers expose themselves to a market much larger than what a newspaper ad can offer. And since most newspaper websites are visited during the 9-5 work hours, businesses can keep themselves exposed to a visitor, even while they’re working. So if a business does both online and newspaper -- the latter tends to be read in the morning, evening, or on the weekends -- an advertiser has the potential of exposing themselves to a visitor 24/7, the most exposure possible for any advertiser. So it’s in the newspapers’ best interest to cut back on producing the newsprint, and invest their money on making their websites more sophisticated because advertisers like online more than they! like newsprint.

Thirdly, and the most lucrative, is direct marketing. Every major newspaper obtains demographic information about their subscribers, AND they have access to obtaining information about people who don’t subscribe. Essentially, San Francisco Chronicle has demographic information about every single person in the Bay Area. What residences don’t know is how detailed that information is. For example, I worked with a very upscale professional bike shop in Palo Alto, whose consumers tend to come from a ten mile radius. The shop wanted to bring in more people, but they only want the rich, sports-minded thirty-somethings. Obviously, a print or online ad would give them too broad of exposure. So in my cubicle, I worked with the marketing department to get information of every single million dollar home, whose owners reported somewhere that they are active in sports and/or purchased a bike within the past year, and where they lived. So the business gave me money to create a custom postcard, which I created with my artist, and mailed those postcards to those households who fit the criteria. The incentive for the advertiser was that his highly-targeted advertisement is going to be mailed to a household, who is most likely going to be interested in his products. So his return on his investment is much higher than a newspaper ad. The incentive for me was the money he gave me. Direct marketing is expensive because of all the work. So it’s in the newspaper’s best interest to invest more money on demographic research and direct marketing than developing newspaper ads. So the next time you see what you think is junk mail, it can be a direct marketed piece sent to you and only you. That’s because many companies have tricky ways of obtaining your demographic information all for the sake of generating revenue. (I can’t tell you how often I have to explain this to businesses, and they responded, “I didn’t know newspapers can do that!”)

With all that said, San Francisco, Los Angeles, and New York’s newspapers have fewer subscribers and thinner newspapers. But they are spending their money on their websites and obtaining as much information about their residences as possible. (They are literally watching us.) The catch is audiences have always associated the newspaper’s brand to the actual newsprint. Again, if audiences see a thinner newspaper, it could look like the newspaper is not doing so well. In reality, that may not be the case. But another catch is that it takes less man-power to operate a newspaper website or conduct demographic research, and therefore, newspapers don’t need to employ so many people in advertising. So many publications in these three markets are downsizing because they can generate more revenue by staffing fewer people.

What does all this mean for the newspaper industry as a whole? Production of newsprint will continue to decline as newspapers’ websites become more sophisticated … and people will get more junk mail. I do not know how much these trends impact the editorial side. But I do know that once a company starts downsizing, almost no one in the company is immune.

So … perhaps the journalism major can offer a seminar to highlight the business side of the journalism industry. Really, newspapers are companies, and there’s a profit to be had and people to pay to keep the organization alive and running. I think some understanding of how the money flows throughout the company deepens students’ knowledge of the industry as a whole, and deepens their appreciation of the journalism discipline … and my nerdy butt thinks this stuff is interesting. Now that I’ve given my two cents, I shall step down from my soapbox now and finish my glass of Merlot.

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