Huge growth in online newspaper readership is being reported and
one researcher suggests that the Internet “may turn out to be the
lifeline the newspaper industry has been seeking.” But it may be a
lifeline that strangles employment advertising if significant
changes aren’t made by newspapers.

The Media Audit reported in late May that many more daily online
newspapers are reaching and passing 20 percent market saturation –
already approaching half the newspapers’ print penetration.

At nearly the same time, the Newspaper Association of America
reported research that said, “Online newspapers are the No. 1
source of local news and information online…”

Despite these cheerful reports, the NAA reports the classified
ad category that most heavily has been affected by the Internet –
employment – fell a whopping 38.4 percent nationally in the first
quarter of 2002, compared with the same quarter last year.

The Media Audit report said that in the 85 metro markets
surveyed in 2001, 28 daily newspaper web sites attracted more than
20 percent of the adults in their immediate market during the last
month.

“Attracting 20 percent of a market doesn’t sound like a
significant achievement until you compare those numbers to the
daily newspaper print product numbers,” said Bob Jordan, co-chair
of the company that produces the Media Audit. “In more than a few
major markets the local daily newspaper is struggling to keep 45 to
50 percent of the adults as readers…”

The Media Audit said that in 2001 45.3 percent of the
respondents surveyed in 85 markets were not exposed to a daily
newspaper on an average weekday, up from 40.1 percent in 1998. The
Media Audit noted that “the newspaper industry has experienced a
steady decline in readership for 30 years.”

Said Jordan: “The Internet may turn out to be the lifeline the
newspaper industry has been seeking.”

That talk may be wishful thinking, at least in the area of
employment advertising.

The best snapshot of the employment advertising “crisis” I’ve
seen lately was prepared by Peter Zollman’s Classified
Intelligence, which has produced a report “Employment Advertising:
The Migration from Newspapers to Multiple Media.”

Says Zollman: “Once upon a time, newspapers had essentially 100
percent of the employment advertising business. Recruiters
advertised in the paper because, well, they had to. There was
nowhere else to go to find people who wanted new jobs.

“No longer.

“For one thing, ‘passive job-seekers’ – people who aren’t
looking, but might be enticed to accept a new position – are the
new holy grail of recruitment. And they aren’t reached very well
through the newspaper help-wanted section.

“For another, younger audiences don’t read the paper like Mom
and Dad did. The loss of younger readers (or lack, since you can’t
lose a reader you never had), means employers have to look beyond
the newspaper for prospective employees.

“For yet another, new recruitment ad options – online, radio,
television, direct mail – now target specific prospective
job-seekers with services that didn’t exist just a few years ago.
…

“In interviews with more than a dozen executives responsible for
placing recruitment ads for major employers across the U.S., we got
the same message, over and over: ‘We’re moving our advertising out
of the newspaper and trying new things. Not all of it, but a
growing portion of it.’ “

Part of the decline in employment advertising is attributed to
the recession of 2001-2002. The job market is no longer extremely
tight, so employers don’t have to spend nearly as much money
recruiting.

With the recession apparently ending, newspaper recruitment
advertising isn’t seeing the rebound that other sectors have seen.
The NAA for the first quarter showed the classified categories of
auto up 4.7 percent, real estate up 2.8 percent, all other
classified ads up 6.6 percent, but recruitment advertising’s 38.4
percent plummet sent the entire classified category down 13.6
percent.

Kannon Consulting, under contract to the NAA, estimates that a
tight job market will resume for the rest of this decade, with an
estimated 22 million new jobs being created and another 45 million
jobs “churning.”

Where will the market place for these jobs be? Kannon suggested
that the printed newspapers will retain advertising for the
“low-tech,” lower paying jobs, while high-tech, better-paying jobs
will continue to migrate to the Internet. Kannon suggests online
newspapers can capture a significant portion of this business, if
properly positioned.

However, many of the lower-paying, low-tech jobs will be filled
by young first-time job seekers, who often look to the Internet
ahead of a printed newspaper. This trend makes puts entry level
jobs at risk for print newspapers.

So why can’t newspapers – with their strong local online
dominance – capture or retain that market inside their online
products?

The problem may be in the newspapers’ culture, writes Michael
Romaner, president of NAA’s New Media Federation. Romaner writes in
the May issue of the Edge Unplugged: “…We need to have good
products, but we’d better change the sales culture to make them
work.”

What exactly does that mean?

To start with, I suggest we look at “unbundling” our recruitment
advertising – that is, we don’t force a customer to buy both a
print and online ad. Let customers buy online-only ads, if they
wish. (Think you don’t have a culture problem at your newspaper?
Try making the above suggestion to your classified manager and
watch the sparks fly.)

If we insist on bundling employment advertising, we will be
forcing customers to pay high rates for advertising that they don’t
value. If we don’t offer as cost-effective method for online
advertising, someone else will – or already has.

The Internet may be the “lifeline the newspaper industry is
seeking” – but only if we’re willing to change our culture.

(Marc Wilson is CEO/general manager of TownNews.com. He’s
reachable at marcus@townnews.com).