Inefficient print

We already knew that newspapers’ classified business was as good as gone, but even so I found these stats from the Wall Street Journal this morning devastating:

Last March, Baylor Health Care System, a large Dallas-based nonprofit, began purchasing keywords on Google, Yahoo and employment-related search engines SimplyHired.com and Indeed.com. The search-engine ads generated more applicants, at less cost, than the other recruiting methods, says Eileen Bouthillet, director of human resources communications.

In the first six months of the program, Ms. Bouthillet says, the search-engine ads delivered 5,250 applicants, at an average cost of $4. By contrast, Baylor paid an average of $30 for each of the 3,125 applicants who came via job boards, and $750 each for the 215 applicants who replied to a newspaper or magazine ad.

As a result, Ms. Bouthillet says Baylor has reduced spending on job boards and print ads. . . .

UPS says it received more than 150,000 applications from [its holiday hiring] campaign, at an average cost 75% to 80% cheaper than print ads. “We’re cutting newsprint wherever we can and trying to move more to online media,” says Matthew Lavery, corporate work-force planning manager. “Google is outperforming other online media.”

If this is true of job advertising, it will be true of other categories – including papers’ last hope: retail – especially local ones as mobile makes Google even better at targeting. Google has the mechanism to serve small, local advertisers who were never served by papers; papers don’t. I think this probably means that the best opportunity local outlets have is to help local advertisers with their SEO – to place ads on Google for them. (See Fred Wilson’s tweet on this model at CUNY’s New Business Models for News Summit.)

Print has always been inefficient. Now advertisers are learning just how inefficient as online becomes more efficient. This is another reason to develop the strategy to drop print now.

  • Mike D

    Very interesting, and certainly not good news for newspapers. I’d rather see a stat that showed $$ per hire than $$ per application. Have you seen any stats like that?

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  • http://www.bizcard.com/ Print Matt

    The print industry is truly going through a new shift. Publishers should start to embrace this shift and put more efforts into their web and the mobile phone properties.

  • http://eatsleeppublish.com Jason Preston

    That’s a pretty horrid comparison, when you put it all side by side. There are certain products that can still get a largely intangible lift from brand association, but even so, when you can cut your costs by that much – why bother?

    The problem, of course, is that Google never has paid for the cost of content creation, and their so ubiquitous that they’re driving the cost of advertising down to a level that WON’T support advertising, because of course, that’s not a cost they’re concerned about. Sigh.

    • Andy Freeman

      One problem with “Google has never paid for the cost of content creation” is that the vast majority of newspaper costs have nothing to do with content creation. The other is that it ignores what Google does pay for, and give away, namely visibility.

      Note that newspapers, and everyone else, is perfectly free to block Google. If you’re not doing so, you’re either dumb or you believe that the value of visibility is greater than the cost of content creation.

      Yes, Google is trying to drive down the cost of delivering advertising, because that’s one of the costs that they pay (and have to pass on to their customers). At the same time, they’re trying to drive up the value of advertising, because that’s how they make money.

      In other words, Google is trying to drive up the profits of advertising. This is a bad thing for folks who make money off the costs or make money off of devaluing advertising but it’s unclear why it’s necessarily a bad thing for newspapers.

  • http://rexblog.com Rex Hammock

    re: “Print has always been inefficient. Now advertisers are learning just how inefficient as online becomes more efficient. This is another reason to develop the strategy to drop print now.”

    Jeff. You know I agree with you 99% of the time, but this post is a rather broad brush indictment of books, newspapers and magazines based on a cherry-picked example of one narrow type of advertising.

    I agree with you that classified advertising (like job-recruitment ads) are ideal for search-oriented transactions. Google and Craigslist proved that long ago.

    But search advertising and classifieds are a solution to a specific type of marketing challenge. Other challenges demand other approaches.

    You’ve just released a book (a good one that I’ve recommended to several people), but I would have never found had you not promoted it on this blog and had, instead, depended solely on purchasing Google search terms.

    I’ll be the first to suggest (and have done so often) that certain business models related to print are going to die (like those that depend on classified advertising), but there are many things other media can do that the Web can’t.

    Great marketers don’t want less media options — they want more.

    Great marketers (and unfortunately, there are too few of them) know the power of the Web, but they also understand print, TV and outdoor as well.

    Mini Cooper, Apple, Nike — they continuously challenge their advertising agencies to create great advertising using ever media imaginable.

    Apple, for instance, is a brilliant advertiser in print, on TV and outdoor. Yet, ironically(?), its online advertising budget is a small fraction of what it spends on other media. Why? One could write a book on the answer to that question. Maybe call it What Would Apple Do? ; )

  • http://www.viralhousingfix.com Dan McCarthy

    I agree with Rex, adding a couple of key data points from our experience in one segment of the classifieds market: apartments for rent.

    We publish print & internet guides to apartment communities in over 100 markets around the country. The market has six main players: three pure-play internet business and three integrated-media businesses that combine print and internet distribution.

    From the start, we’ve been providing the print and internet distribution to our advertisers for one price, and we’re evaluated versus our competitors on a cost per lead basis (all of the leads are tracked through toll numbers and e-mail counts.)

    In the apartment community space, the integrated media buy has two advantages over the internet-only buy: volume and cost per lead. The internet-only buy has one key advantage: lower absolute price.

    My experience in this category has demonstrated that consumers will still refer to timely, easy-to-access print directories that incorporate well-organized and efficient information. They will refer to the web as well. And they will generate leads through both sources.

    In fairly level market, an advertiser can differentiate themselves (in terms of lead volume and cost per lead performance) by using the print product, where, ironically, they can stand out more prominently than they might in an competitive online advertising category. Or, they can dial down their expenditures, and sacrifice some amount of lead volume, by advertising online.

    For those of us competing in this sector, we’re watching the lead volume by media source carefully. When it become uneconomical to print the physical product, there is a path to convert wholly to the web product. I don’t see that happening soon in this category. Multiple media, multiple outlets, one message works, as long as it is economically rational for the advertiser.

  • http://rexblog.com Rex Hammock

    After my earlier comment, I thought I should come back and say for the record: I think all but a few newspapers are going to die, but not because they are printed on paper. I think they are going to die because they have been run by complete idiots for the past three decades.

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  • http://brandonemarketing.com Bill Alpert

    @ Rex and Dan: I think your analysis is spot on. A general indictment of print is all too easy, but spotting its benefits for marketers require a more in-depth look.

    Print publishers long exploited their classified pages with obscene rates, which likely carried much of the cost of the editorial portions of their paper. That model no longer works, which is not to say there aren’t other ways to fund a print publication that is focused on a marketing initiative.

    The real problem is how to fund the services of the professional journalists who write the stories and editorial content for these publications. The internet model has to date not produced sufficient for newspaper publishers, since the popular expectation on the internet is cheap FREE!

    Print buyers can purchase print production at very competitive prices these days. It’s really a wide open opportunity created by those rushing to their computers. Hopefully marketers will find ways to create compelling content that addresses yet another issue: getting people to read anything at all!

  • http://brandonemarketing.com Bill Alpert

    @ Rex and Dan: I think your analysis is spot on. A general indictment of print is all too easy, but spotting its benefits for marketers require a more in-depth look.

    Print publishers long exploited their classified pages with obscene rates, which likely carried much of the cost of the editorial portions of their paper. That model no longer works, which is not to say there aren’t other ways to fund a print publication that is focused on a marketing initiative.

    The real problem is how to fund the services of the professional journalists who write the stories and editorial content for these publications. The internet model has to date not produced sufficient income for newspaper publishers, since the popular expectation on the internet is cheap FREE!

    Print buyers can purchase print production at very competitive prices these days. It’s really a wide open opportunity created by those rushing to their computers. Hopefully marketers will find ways to create compelling content that addresses yet another issue: getting people to read anything at all!

  • http://brandonemarketing.com Bill Alpert

    @ Rex and Dan: I think your analysis is spot on. A general indictment of print is all too easy, but spotting its benefits for marketers require a more in-depth look.

    Print publishers long exploited their classified pages with obscene rates, which likely carried much of the cost of the editorial portions of their paper. That model no longer works, which is not to say there aren’t other ways to fund a print publication that is focused on a marketing initiative.

    The real problem is how to fund the services of the professional journalists who write the stories and editorial content for these publications. The internet model has to date not produced sufficient income for newspaper publishers, since the popular expectation on the internet is cheap or free.

    Print buyers can purchase print production at very competitive prices these days. It’s really a wide open opportunity created by those rushing to their computers. Hopefully marketers will find ways to create compelling content that addresses yet another issue: getting people to read anything at all!

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  • Paul Boswell

    I’m not sure what is proved by the delivery of 5,250 applicants. I say, “Big deal.” We’re well into the 21st century and we still do job recruitment like we did in the 19th century, we just put newspaper ads on a computer screen without using 1% of the power of the computer to do the tedious clerical work. So, now some poor HR person or manager has to read 5,250 resumes? And those job search sites — don’t make me laugh. Their business model has NOTHING to do with getting people a job. They exist solely to serve up ads and job listings. They want their job seekers to stay unemployed as long as possible, so the longer they stay on the site, the longer they serve ads…each mouse click is like a slot machine handle being pulled for the job site. If employers would get their heads out of their a**es they should be asking for a universal job bank where employees complete a skills assessment, along with their requirements of an employer (location, salary range, other benefits) while employers do the same for the job. The computer then scores the best matches and presents 2-3 top candidates (or 2-3 top jobs to the job seeker) so they can get on with interviewing the best prospects without all the paperwork.

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