Media companies struggle for ad revenue as economy softens

Worry about sales reigns among those

responsible for revenue at area media outlets.

"This is the most challenging time for forecasting,"

says John Murphy, general manager,

Reno News and Review in Reno."I'm planning

for what we feel will be the worst, but that doesn't

mean I expect that."

Lawson Fox, general manager at KTVN

Channel 2, says,"The marketplace is challenging.

Base categories like autos and casinos are

struggling."

At newspapers, says Nevada Press

Association Executive Director Barry Smith in

Carson City,"Paid circulation has dropped and

continues to drop but readership is higher than

ever online.However advertising on the

Internet has not kept pace price wise, and

yields a lesser margin."

The problem in a nutshell for publishers:

"They can't charge as much," says Smith.

Newspapers are hurt, too, by weakness in

classified advertising for real estate, employment

and autos. Some of that business has

migrated on-line. Some of it vaporized when

the economy stalled.

Arne Hoel, chief executive officer of Swift

Communications in Reno, says,"Our newspapers

have been impacted most significantly in

the classified revenue segment. The current climate

is difficult for media and most folks in

any branch of the media industry have not seen

advertising expenditures decline like this during

their careers."

Making things yet more difficult, says

Murphy,"In the newspaper business,margins

are even slimmer than in retail."

To take up the income slack, Smith says

most papers have added a multitude of publications

targeted to narrower markets.

"That's how revenues have kept pace," he

says."For instance, the Las Vegas Review

Journal has 30 niche publications."

Meanwhile, the Internet is bringing about

structural changes to all media, says Hoel.

"This creates new opportunities and our

company will continue to explore new technology

and niches to bring consumers and advertisers

together.Because technology continues to

change rapidly, the newspaper industry has to

be willing to do the same."

KTVN's Fox, for instance, says Web site visits

spike dramatically during times of breaking

news such as earthquakes, blizzards and fires.

Murphy agrees with the need for new

thinking.

"Hard economic times force business to

reevaluate their marketing

plans, to seek new opportunities,"

says the News and

Review general manager.

And it's no longer enough,

he says,merely to sell ads.

"Our sales people,when they

go out, know their job is to

help customers think in new

ways."

Murphy expects Web site

revenues to post a modest 10

percent growth in 2009.

"But newspaper will continue

to be our main focus,"

he says."Unlike some of the

major national chains, which

are neglecting the paper product

in favor of the online edition."

Another new technology

is digital TV. But it's expected to arrive with a

ripple, not a splash, in February.

"With set prices dropping, people are

adapting quickly," says Fox."Only 6 percent

haven't done anything to prepare for the conversion."

Broadcast media enjoyed a spike in ad revenue

last year due to the flurry of election year

political ads. But Fox says of the election year

comedown,"We plan for it every two years; the

business plan doesn't count on an election

spike."

Overall, says Murphy,"I have a sense of

optimism for the local economy, except for

gaming and tourism, which may not have seen

their worst days."