If Newspapers are Dying, Then Why Are The Big Dogs Investing In Them?

If you asked the average American what they thought of the newspaper industry they might say words or phrases like dinosaur, old school, behind the times or just simply dead or dying. There was a time when that may have been true.

Today however, newspapers, and in particular newspaper recruitment advertising departments, have embraced the Internet, utilizing niche job boards as part of their strategy and leveraging mobile and social.

In fact Digital, Mobile and Social are the topics of discussion at the Society for Classified Advertising Managers of America Conference, February 20-22nd at The DFW Hyatt. www.SCAMA.org. Guest speakers include Gary Zukowski, founder of TweetMyJobs.com and Craig Diebel, VP Digital and Classified Advertising for the Fort Worth Star Telegram.

This forward-thinking approach to media has caught the attention of such business icons as Warren Buffet and Jeff Bezos. Buffet formed BH Media Group and to date has acquired sixty-nine newspapers including excellent and profitable publications like Tulsaworld, The Richmond Times-Dispatch and The Omaha World Herald.

Bezos became the latest billionaire to enter the newspaper industry when he purchased The Washington Post for $250 million dollars. Other notable newspapers picked up by large investors include OPUBCO, parent of The Oklahoman newspaper, which was purchased in 2011 by Denver-based businessman Philip Anschutz and the Baton Rouge Advocate purchased by Louisiana investor John Georges in early 2013.

So what do these large successful investors see in the newspaper business? Perhaps it can be found in two notable quotes from the Godfather of Business himself. Mr. Buffet has said two things that may be appropriate to the newspaper world.

“Be greedy when others are fearful.” And…

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

The Newspapers these investors have purchased are top of the line publications with a tremendous upside. They have embraced Digital-Niche-Social-Mobile as a business building strategy and see a bright future in the newspaper industry.

Art De La Torre, Advertising/Business Development Manager for The Advocate Newspaper in Baton Rouge, LA and SCAMA Board Member also sees the light at the end of the tunnel for the industry.

“When I look at our Employment job postings from 2012 versus 2013, we actually had more job postings in 2013. Not a lot more, but more. Our volume has not decreased.

The Advocate is still the local source if you are looking for a job or a new career in Baton Rouge.

John Georges, a brilliant businessman from New Orleans, bought The Advocate in May 2012. He understands the importance of a local newspaper. We now have three separate daily editions of The Advocate in Baton Rouge, New Orleans and Lafayette. He would not be investing into The Advocate if he thought the newspaper was dying.”

De La Torre’s comments are insightful. At a time when many major job boards are losing market share, newspapers and niche boards are increasing marginally. Focusing on Local is a key reason. Social and mobile lend themselves well to the Local Strategy and the vast number of advertisers in any market would rather go local first, particularly in employment.

My own company, Cross-Post LLC, with more than 100 newspapers selling our products, has for ten years invested in the newspaper recruitment advertising market, and has seen double-digit growth every year since 2008; the start of the great recession. With rare exception, we have seen most of our clients increase market share and revenues, year over year, and to the paper, the growth has come from Niche, Digital, Social and Mobile.

Wise niche players realized early on that having hundreds of sales people sell their products each day has its advantages as well and major niche job boards like Latpro.com, RetirementJobs.com, Hospitaljobsonline.com, USMilitary.com and many others have embraced the Cross-Post Newspaper model.

While some believe Newspapers Publishing is a “sunset industry” others like Buffet and Bezos believe there is a huge difference between dying and changing and therein lays a tremendous opportunity.

To attend or display at the upcoming Digital-Social-Mobile Conference at the DFW Hyatt in Dallas on February 20-22nd, visit the Society of Classified Advertising Managers of America at www.SCAMA.org or drop me a line at carl@cross-post.com.