February 14, 2020 (image Reuters)
This is one of the biggest news stories of the quarter in the Puget Sound. McClatchy, the parent corporation for the Tacoma Tribune and the Olympian filed for bankruptcy "to shed costs of print legacy and speed shift to digital.” Over the past 10 years, readership of McClatchy newspapers has dropped 58%. This is not particularly the rate for the Tacoma Tribune or Olympian but an average overall. Though the age of social media and information exchange has rapidly gone digital, many in print have failed to transition quickly enough as it appears McClatchy has found.
The pensions for McClatchy employees has a 75 year old model that could not sustain itself. For every McClatchy employee there were 10 pensioners. McClatchy reports that there is “no immediate impact” of the bankruptcy however the future of print in regards to newspapers is not looking too bright.
The Tacoma Tribune's Matt Driscoll stated on Twitter, "In the short term, nothing changes. Longer term, less is known. We probably have the same questions you do."
Ironically we scanned the headlines of the Tacoma Tribune online and could not find the bankruptcy story which may impact hundreds of jobs, those who advertise with them and of course paper subscribers. We were able to find some national stories on their Facebook page. The McClatchy website stated, "The Chapter 11 filing will allow McClatchy to restructure its debts and, it hopes, shed much of its pension obligations. Under a plan outlined in its filing to a federal bankruptcy court, about 55 percent of its debt would be eliminated as the news organization tries to reposition for a digital future.
Though a digital news version is likely to continue for the Tribune and Olympian, there will be lost jobs if their print newspaper stops. They will still have to complete for advertisers who find it much easier and economical to pay for advertising on their own or through a local agency. Many digital marketing enterprises take half of a business’ ad spend to be able to pay for the staff and overhead to advertise a client. These days, there are too many options that can maximize a business’ advertising dollars so that they aren’t losing 50% of their ad dollars for administrative costs of the digital news company or agency.
McClatchy also blames Congress for not bailing them out due to partisan politics however when looking at the obvious political bias it has presented, it is no surprise. Less Americans want to read propaganda as we see enough biased 'memes’ on social media throughout the day that makes one want to block out those also.
What’s going to happen next? Advertising pays for staff, reporters, editors etc… Advertising in print always has its difficulties of tracking the success of the ads. You can always use a tracking phone number which gives you a specific number for that ad such as through Sound Call Tracking. The military is the largest market in the South Sound but those military spouses are in Facebook groups such as Military Wives / Spouses of JBLM asking for suggestions from where to eat, get their hair done, dentists, childcare and events. This group is also part of DiscoverJBLM.com which is a revolutionary directory for military to find businesses that they are looking for. If 60 cents of every dollar is coming from the military, they aren’t looking in newspapers to find what they need. They aren't watching local news as they are not from here and will more than likely return to their home state or move to another base. They look for places they can relate to for information. Therefore one can only surmise that the newspaper will eventually be gone.
Reports are saying that in the future, 50% of those who are searching for a business will be using voice technologies such as Siri or Alexa to look for a business. These platforms use Yelp to pull information from. Local agencies have partnered with Yelp to customize the assistance rather than have Yelp staff in California or Arizona who do not have the local connections. If you are not listed on Yelp, you will lose business.
With any website, you will see that the number of ‘clicks’ on an ad is relatively low. As a business owner you should have a means to track those clicks so you can determine if you are getting a return on investment. Should you need assistance, you can always contact us for free advice.