After classified ads, inserts may desert papers

Bad as 2009 was financially for newspapers, one advertising staple held up pretty well -- preprinted inserts and the accompanying coupons
bargain-hunitng readers love to clip and use in a tough economy. There are rumblings, however that inserts, like classified advertising before it, may be coming under intense digital competition and other pressures over the next several years. This time, the warning comes from the industry's own Newspaper Association of America.

In a little-noticed white paper published in late October, the NAA and Kannon Consulting, warned that inserts, which account for half of retail advertising, are "under siege."

Among the problems they cite:

• There are worries whether newspaper inserts can hold their own given big circulation losses and poor penetration among younger users.
• Digital coupon use, while still relatively small, is growing quickly, as are specials offered on companies' own Web sites.
• Over the last several years the cost to advertisers of printing the inserts (with paper more expensive) and distributing (with fuel more expensive) hit at a time when marketing budgets are tight. (Paper prices fell in 2009 but are likely to head back up later this year).
• The complexity for a national advertiser dealing with placements in many papers causes many to turn to "third-party intermediaries" to manage the transactions, adding another layer of expense.

Proposals for a collective response to an obvious industry problem tend not to happen. Blame inertia, blame the big papers and big companies who want to do it their own way, blame executives who can't stomach the expense of abandoning a current vendor or internal system and creating a new one.

Urgent business distress doesn't sweep away the objections.  I wonder, though, if the execs were absent from eighth grade history class when the other boys and girls pondered Benjamin Franklin's Revolutionary War aphorism: "We indeed, must all hang together, or assuredly we will all hang separately.

http://www.poynter.org/column.asp?id=123&aid=177740