iewPoint | Volume 2 | Number 3 | March 2006
A forum for news about Verified and the business in which we thrive.

This Month's Features:
Newspapers in Smaller Markets Remain Strong
Hispanic Publications Growing Rapidly in the U.S.
Creating the Perfect Magazine Cover
Events Calendar
Dallas Morning News Inserts CD-ROM
Guide to Your Audit – Mail Distribution


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Newspapers in Smaller Markets Remain Strong

If you believe everything you read, newspapers are in their death throes. Dwindling circulation, shrinking ad revenues, loss of classifieds, online news, citizen journalism, severe staff cuts—all of these factors have dealt a blow to their overall health.

"This newspaper bashing, it's nothing new, but in the last year and a half with Knight Ridder [under pressure to sell] and Wall Street just hammering away how the newspaper industry sucks, it's really increased—and it's just not right," said John Cribb of Cribb & Associates, a newspaper broker and appraising firm in Bozeman, Montana.

Despite the dire predictions, newspapers in the small- and mid-sized markets are feeling fine. They're operating in the black and have a positive attitude about the future of their business.

Fed up with all of the industry bashing, Cribb commissioned a survey from research firm Critical Data, Inc. The survey quizzed small- and mid-sized newspaper executives and gathered responses from 45 newspapers.

The survey revealed a different point of view from the smaller papers:
  • 93% said they "were still enjoying the newspaper business."

  • 82% said they would encourage their children to go into the newspaper business.

  • 9 out of 10 executives said they expected to increase their revenues in 2006.
These publishers don't have their head in the sand. Most publishers see the Internet as their biggest competitive challenge (42% said so) over print (rated second with a 24% response). They also worry about the Web eroding their classified ads.

The small- and mid-size papers represent the majority of U.S. newspapers. Of the respondents, 77.8% reported they grew revenue in 2005. The average growth was close to 7% and they expected to do the same this year.

"The big-market guys do have problems," said Cribb. "They face the most intense competition and face the worst fall-out from paid circulation [declines]. A lot of their franchise is international and national news—and that's not much of a franchise anymore with the Internet and all the other sources out there. But you go to the small- and mid-markets...and they've got the local news franchise, and that is a powerful, powerful franchise."




Hispanic Publications Growing Rapidly in the U.S.

Over the past 10 years, Hispanic publications of all kinds have displayed more growth than any other category—increasing from 124 in 1996 to 329 this year, for a gain of 165%.

Deborah Striplin, Standard Periodical Directory editorial director, said part of the growth in Hispanic titles was fueled by the introduction of regional publications such as Tu Ciudad Los Angeles and Ser Magazine in Laredo, Texas, as well as an increase in national publications such as Siempre Mujer.

Hispanics are now the largest minority group in the U.S.—35.3 million people or 12.5% of the population. The Hispanic market is particularly attractive to advertisers because they are "vigorous consumers," says Robert Montemayor principal of Montemayor Consulting. According to Montemayor, consumer spending among Hispanics reached an estimated $700 billion in 2004. "If you look at it from now to the next 30 or 40 years, the role Hispanics play as consumers and potential readers will be huge."

Hispanics tend to make every day special for their families, as opposed to saving up for a family vacation. According to the Selig Center for Economic Growth, they spend a higher proportion of their income on such things as groceries, telephone services, furniture, major appliances, clothing, shoes, and housing.

Only four other countries—Mexico, Spain, Colombia, and Argentina—have more Spanish-speaking residents than the U.S. Some Hispanics live here for years without becoming fluent in English, while others may speak English well but feel more comfortable in Spanish. Some younger Hispanics who live their life primarily in English realize the advantages of being bilingual or just want to preserve their culture and traditions.

Spanish-speaking readers are no longer limited to established markets such as Texas and California. From 1990 to 2000, the Hispanic population more than tripled in Georgia, North Carolina, Nevada, Alabama, Arkansas, South Carolina, and Tennessee. Both large and small papers from around the country are responding to the trend. The Free-Lance Star in Fredericksburg, Virginia, started a trial Spanish-language newspaper in December 2003. The response was so great, that the paper decided to produce a monthly publication, La Conexión, which is written almost entirely in Spanish.

Multinational corporations are coming on board as well. Procter & Gamble is trying to expand sales for its Ariel laundry detergent, which is popular in Mexico, into U.S. Wal-Mart stores. Pepsi-Cola North America is bringing Manzanita Sol, a popular apple-flavored drink in Mexico, to Southern California, Texas, Arizona, New York City, and Miami.

Lara Montilla, senior marketing manager for Pepsi, said, "The U.S. is exploring different flavors more now than before. We definitely will see a lot of crossing paths when it comes to innovation that is targeted to ethnic consumers but crosses into the general market."

Latinos have had a huge influence on the U.S. diet. Items like jalapeno peppers, mangos, and avacados weren't part of the U.S. palate. "These weren't mainstream until the Hispanic population grew," said Macria Mogelonksy, a senior research analyst for Mintel International.

Yvonne (Bonnie) Garcia of Market Vision, a marketing agency in San Antonio, Texas, said, "Immigrants have more product choices here than in Latin America. Language hurdles make them eager for information in Spanish. Companies that build their brands in the Hispanic market from the ground up and market their products in a way Latinos understand, whether in-language or in-culture, will be the most successful."




Creating the Perfect Magazine Cover

Kate White, editor-in-chief of Cosmopolitan magazine, was the keynote speaker at a recent DMA Circ Day luncheon, and instead of focusing on rate base or renewal timing, she decided to take on the almost mystical topic of magazine covers and cover lines. White knows what she is talking about—Cosmo is the best selling consumer magazine in the country with a total circulation of approximately two million.

White said that she spends two weeks a month working on covers and cover lines. With newsstand sales falling, White stressed how important covers were as a selling tool for the magazine. White offered these tips for creating a cover that sells:
  • Obey the 80/20 rule—80 percent of the best ideas come from just 20 percent of your staff.

  • Choose your cover look and stick with it. Find what makes a cover work and use it to create a "personality" that is yours alone.

  • Trust your instincts, but make sure you educate yourself first. Use research (focus groups, readers surveys, etc.) to find out who your readers are and what they want.

  • Put time into the cover lines—and use outside help if you need it. Make sure your magazine has a "voice" as well as a look.

  • Use the cover lines to make hard promises and make sure they deliver.

  • Don't create the cover by committee. However, editorial, art, production and circulation should work together on this important element.

  • Innovate constantly.
White quipped, "If I wasn't here, I'd be working on cover lines like 'Mattress Moves So Hot His Thighs Will Go Up in Flames.'"




Events Calendar

America East Newspaper Operations and Technology Conference
March 27–29, 2006
The Hershey Lodge and Convention Center, Hershey, PA
www.america-east.com

FOLIO: 2nd Annual Publishing Summit
March 28–29, 2006
Westin Michigan Avenue, Chicago, IL
www.foliosummit.com

2006 National Association of Hispanic Publications Convention & Expo
March 29–April 2, 2006
Hilton Las Vegas, Las Vegas, NV
www.nahp.org

Ontario Community Newspaper Association 2006 Spring Convention
March 31–April 1, 2006
Toronto Airport Renaissance Hotel, Toronto, Ontario
www.ocna.org

Circulation Management Association of Canada - Magazines Canada School for Publishing
March 31–April 9, 2006
Queen's Landing, Niagra-on-the-Lake, ON, Canada
www.circ.org

NEXPO 06
April 1–4, 2006
McCormick Place Complex, Chicago, IL
www.nexpo.com

Newspaper Association of America 2006 Annual Convention
April 2–4, 2006
Fairmont Chicago, Chicago, IL
www.naa.org

10th Annual New York Magazine Day
April 20, 2006
Marriott Marquis, New York, NY
www.theadvertisingclub.com

Mid-Atlantic Community Newspaper Association
April 21–23, 2006
Wyndham Harrisburg-Hershey, Harrisburg, PA
Email: alysem@fast.net

Southern Circulation Manager Association
April 30–May 3, 2006
Sheraton Read House Hotel, Chattanooga, TN
www.scmaonline.net

Midwestern Circulation Management Association Marketing Conference
April 19–22, 2006
Embassy Suites Hotel, Omaha, NE
www.midwestcirculation.com

Jim Desser, COO of Verified, will be attending the Midwestern CMA. Jim would be happy to answer any of your questions and talk about the valuable services Verified provides.

32nd Annual Association of Alternate Postal Systems Conference
April 22–25, 2006
Westin Resort and Spa, Cancun, Mexico
www.aapsinc.org

Tim Prouty (CEO) and Jim Desser (COO) of Verified, will be attending the 32nd Annual Conference. Tim and Jim would be happy to answer any of your questions and talk about the valuable services Verified provides.

Central States Circulation Management Association Conference
April 23–25, 2006
Hotel Pere Marquette, Peoria, IL
www.cscma.com

Texas Circulation Management Association Conference
April 24–26, 2006
Raddison Hotel, South Padre Island, TX
www.texascma.org

American Society of Newspaper Editors Annual Convention
April 25–28, 2006
Westin Hotel, Seattle, WA
www.asne.org

Cal-West Circulation Management Association Conference
April 26–28, 2006
El Dorado Hotel, Reno NV
www.cwcma.com

Southern Circulation Management Association Conference
April 30–May 3, 2006
Chattanooga, TN
www.scmasonline.net

Assoc. of Free Community Papers and the Community Papers of Florida 2006 Joint Conference
May 4–6, 2006
Doral Golf Resort and Spa, Miami, FL
www.afcp.org

North Dakota Newspaper Association Convention
May 5–6, 2005
Radisson Hotel, Bismark, ND
www.ndna.com

New York Sate Circulation Management Association Conference
May 10–13, 206
The Sagamore Resort, Lake George, NY
www.nyscma.com

Mid-Atlantic Circulation Management Association Conference
May 14–16, 2006
Hilton Hotel, Wilmington, NC
www.midatlanticcma.org

2006 Interactive Media Conference
(Sponsored by Editor & Publisher and Mediaweek)
May 17–19, 2006
Green Valley Ranch, Las Vegas, NV
www.interactivemediaconference.com

New England Association of Circulation Executives Annual Spring Sales Conference
May 21–24, 2006
Viking Hotel, Newport, RI
www.neace.com

Canadian Community Newspaper Association National Convention
May 24–27, 2006
Delta Quebec, Quebec City, QU, Canada
www.communitynews.ca

If you have an event that you would like to announce, please send your information to e-newsletter@verifiedaudit.com.




Dallas Morning News Inserts CD-ROM

The Dallas Morning News announced recently that it has entered into an agreement to distribute an entertainment magazine on CD-ROM in their Sunday edition monthly starting April 30th. The disk will be inserted into 625,000 newspapers distributed to subscribers and available on newsstands in the Dallas/Fort Worth area.

The magazine, titled Hollywood Previews Entertainment iMagazine, is published by iMedia International, Inc., a digital media company that produces DVDs and CD-ROMs for multimedia marketing and promotional campaigns. The new CD-ROM contains movie trailers, contests, interviews, TV shows, music videos, and video games.

Hollywood Preview is interactive, allowing users to click on featured Websites to buy movies, TV shows, music, and games featured in the magazine. The deal with iMedia gives the Dallas Morning News the opportunity to sell space on the disk and divide the revenue. Advertisers can buy video and print advertising in a package deal.

An incredibly valuable feature for advertisers is iMedia's iReporting capability. The proprietary technology gives advertisers permission-based, real-time online tracking. The technology measures usage and gathers response data.

"Based on past newspaper distributions in various test markets conducted by iMedia, we know that this product generates a very high average number of people who take the CD from the newspaper and view it in their computer," said Henry Williamson, President of Newspaper Syndication for iMedia.

Newspapers can now play a role that Google and Yahoo! have played in the past," said Universal Press Syndicate President, Bob Duffy, whose syndicate is representing iMedia. "For example, with Hollywood Preview, the Dallas Morning News can direct readers to DallasNews.com and to the Websites of their advertisers to view special offers and promotions."

"Including this innovative digital media magazine in our newspaper creates an engaging and entertaining experience for our readers, as well as additional marketing opportunities for advertisers," said Bernie Heller, Vice President of Advertising for the newspaper.

A spokesman for iMedia International said the Dallas Morning News is the first to include the CD-ROM. However, they plan to expand the program to several more newspapers nationwide soon.

Similar inserts are already very popular in Europe.




Guide to Your Audit – Mail Distribution

Mail distribution is defined as individual copies (five or less) delivered to single homes or businesses via the USPS or other governmental postal service. Mail distribution may either be paid or free.

For the audit, please provide Statements of Mailing validated by the USPS or other postal service for each issue. Proof of payment for delivery (copies of cancelled checks, bank statements, credit card statements, etc.) is also required. If you use a contract or third-party mailer, you will need original invoices from the company showing the total number of copies mailed per issue and proof of payment.

If you mail directly from your office using 1st-Class postage, make sure to maintain a log that includes the issue date, meter start and stop totals, the total number of copies mailed, and the cost. These records and proof of payment for postage are required for the audit.

If you have paid mail subscriptions, please provide a subscriber file or list showing name of subscriber, address, amount paid, date paid, and expiration date. We will request verification of subscriber payment (deposit slips, copies of checks, etc.) for a sample number of subscribers during the audit. The subscriber list should clearly indicate paid vs. free subscription status if you offer both types of distribution.

Complete mail distribution records should be maintained for every issue. Please keep a historical record of your mailing lists (electronic or print). If you have questions, please contact Verified at 415-461-6006.



Please send comments and story ideas to e-newsletter@verifiedaudit.com or contact us at:

Verified Audit Circulation
900 Larkspur Landing Circle, Suite 295
Larkspur, CA 94939-1758
Phone: (415) 461-6006
Fax: (415) 461-6007

© 2006 Verified Audit Circulation.