Hoosier State Press Association revamps co-op advertising

January 15, 2011

The Hoosier State Press Association has revamped its cooperative advertising service in hopes of landing more business for its 175 members.

The change—hiring its first salesperson—was nothing high-tech, but Executive Director Stephen Key thinks it’s just what the HSPA needed at a time like this.

“Give us a couple years, and we should be placing more than $1 million” in annual advertising, Key said. The goal for this year is $400,000.

steve key Key

Nationwide, newspapers have seen revenue from print advertising fall by nearly half since before the Great Recession. Print ads brought in $5.4 billion in the third quarter of 2010, compared with $10.1 billion in the same quarter of 2007, the Newspaper Association of America reported in December.

The revenue that HSPA hopes to capture is tiny by comparison. But part of the press association’s mission is to remind advertisers that its members are still relevant. (IBJ and The Indianapolis Star are on the HSPA’s roster, but publications such as the Bourbon News-Mirror in Plymouth and Carroll County Comet in Flora make up the bulk of membership.)

HSPA Advertising Director Pam Lego thinks newspapers have overplayed their circulation declines while forgetting to play up their strengths.

“We beat ourselves up and make ourselves look worse, and we probably should stop doing that,” she said. “We still have a reporter out on the street, covering what’s going on in your community. That’s where we need to get back to.”

The press association hired Lego, a former marketing director for Columbus-based Home News Enterprises, in late 2009 to spearhead the service, which was renamed Midwest Advertising Placements.

Also in 2010, the HSPA added a content-sharing service to supplement material that members get from the Associated Press.

As shared ad revenue remained slack, HSPA went into the red last year by more than $50,000, Key said.

The trade group’s annual budget ranges from $600,000 to $700,000. (Key declined to provide more specific figures.) About 80 percent of the HSPA’s income is from classified advertising—space that member newspapers set aside with profits benefiting the trade group.

While newspapers give HSPA 5 percent of their revenue from Midwest Advertising Placements, Key said the program exists as a member service, rather than a source of income. (The remaining 95 percent goes into the coffers of papers that run the ads.)

Press associations in other states place tens of millions through programs similar to Midwest Advertising Placements. A Pennsylvania group, which is active with ad buyers in New York, leads the pack with about $80 million in placements, followed by Florida and Iowa, Key said. The HSPA hopes to grow into a role that would extend beyond Indiana state lines, he said.

Newspapers are notorious among ad buyers for their lack of standard formatting, so the cooperative simply aims to make placing ads in multiple papers more convenient. The HSPA maintains a database of prices, deadlines and column sizes, while the papers shoulder the cost of aligning content to fit their various formats. The service includes online advertising.

Promotus Advertising President Bruce Bryant said the one-stop service saved him a “ton of money” when he needed to blanket the state with ads for his client, the Indiana Tobacco Prevention and Cessation Agency. Though he could reach many corners of the state through radio and television, Bryant said he wanted his audience to associate the ads with a hometown publication.

“The one thing we do know for sure belongs to them is the little weekly paper—and people read it religiously.”

Banks, utilities, higher education and health care are all industries that have similar regional advertising needs, Lego said.

The press association’s effort to invigorate co-op advertising, which has been available for years, probably won’t reverse the long-term trends that have eroded newspaper circulation, as well as audiences for traditional broadcast media.

“Let’s face it, newspaper [advertising] is struggling, and it faces some dynamic online media changes,” Bryant said.

Yet he thinks the HSPA’s core membership will benefit from a more well-oiled machine. “The key for them is to stay true to the mission, and that’s the small papers. Don’t try to carry the cross for the medium.”•


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