Papers Pushed on Numbers

Two powerful print ad buyers are making a new demand on already suffering newspaper publishers: make circulation guarantees if you want our business.

The buyers, Robin Steinberg, svp, director of print investment and activation, MediaVest; and Brenda White, senior vp, publishing activation director, Starcom USA, are already well-known for demanding more circ accountability from magazines. Together they control about $2 billion in annual print spending, and with this move, they hope to bring consistency to compensating advertisers when circ falls short.

“We have to have accountability in every aspect of the publishing business,” White said. Buyers have pushed hard on this issue as newspaper circ has fallen 16.5 percent in the past five years. “It’s no longer acceptable to not at least provide a minimum guarantee,” Steinberg said. “It’s the low-hanging fruit that has not become common practice. It’s ridiculous.”

The New York Times and USA Today are among those said to have agreed to the demands.

But the idea has met inevitable resistance from an industry that not long ago enjoyed 20 percent-plus profit margins. “It’s just not something the newspaper industry’s ever done,” said Dean Singleton, chairman and CEO, MediaNews Group, and one of a few newspaper execs who would comment on the subject. He prefers selling on the basis of audience, not circ, adding that rate bases would complicate the ad-sales process because buyers don’t want multiple ways of doing business.

But Don Meek, evp of digital at Tribune Co., one of a few publishers along with The Wall Street Journal that already offers guarantees, said times have changed and newspapers should as well. “Can you tell me another medium that doesn’t offer an audience guarantee?” he said. “If we don’t change, we risk becoming obsolete.”
Players’ Notes:

Robin Steinberg: MediaVest

• Controls $1 billion in print spending for clients like Walmart, Kraft

• Is demanding that papers adjust their value when circulation falls

Brenda White: Starcom USA

• Oversees $1 billion in print spending for P&G, GM, others

• After rate base guarantees, will push newspapers to guarantee performance of advertising