Freebies
Is 'The Tennessean' misleading advertisers?
By Henry Walker
To maintain current advertising rates, which were based on the combined circulation of The Tennessean and the now defunct Banner, it appears The Tennessean is giving away thousands of papers each weekday and counting them as paid circulation.
Using documents distributed to advertisers, and conversations with sources who have talked to The Tennessean’s sales representatives, the Scene has pieced together what may be the morning paper’s strategy to avoid having to cut ad rates despite losing some 40,000 in circulation when the Banner closed in late February.
Here’s how it apparently works:
Although The Tennessean and the Banner had separate news departments, The Tennessean handled advertising, promotion, and circulation for both papers and sold ads based on the combined, paid circulation of the two dailies.
When the Banner closed, some advertisers immediately asked for rate reductions, arguing not only that circulation had dropped, but that their ads were no longer reaching the Banner’s older, more conservative, and, they believed, more affluent readers.
To pacify advertisers and to keep ad rates up, The Tennessean promised to replace or exceed the Banner’s lost circulation by June 1. In March, a letter to advertisers predicted that the paper would reach that goal in April. What the letter didn’t say was that The Tennessean is increasing its circulation by giving away more than 20,000 papers each weekday.
Since ad rates are based on circulation, advertisers and publishers pay the Chicago-based Audit Bureau of Circulations (ABC) to monitor newspaper circulation figures and prevent cheating. Under the ABC’s rules, it’s OK to sell papers at a discount—but not more than half off—and still count them as “paid circulation.” Because of this loophole, however, The Tennessean can give free, weekday papers to subscribers who already take the paper on Saturday and Sunday, reporting to the ABC that the subscriber is paying for seven issues a week. An ABC spokesman confirmed that the practice is perfectly acceptable.
The cost of an eight-week subscription to The Tennessean is $28. But if you only want the Saturday and Sunday papers, it’s $17.60. So, The Tennessean is now calling weekend-only subscribers and offering them the weekday paper, on a trial basis, at no additional charge. Sources say more than 20,000 subscribers are now receiving the paper every day for a discounted price of $17.60. Since that’s more than half the regular, $28 subscription price, the ABC will count all the freebies as “paid circulation,” and the advertisers may never know the difference.
There’s nothing illegal or unethical about taking advantage of this loophole in the ABC’s rules. But it might not be the kind of information the paper would want its advertisers to know.
The Tennessean has also increased its circulation by persuading most former Banner-only readers to convert their paid subscriptions to The Tennessean and by introducing a late-morning “Sports Final” edition, which is sold in news racks and is apparently intended to replace lost Banner rack sales.
Will the strategy work? Yes, at least in the short run. But don’t expect The Tennessean to continue giving away more than 20,000 papers each weekday. Eventually, the freebies will stop and the circulation might fall. Based on newspaper data from other cities, the morning paper will eventually capture about 65 percent of the Banner’s subscribers.
The important thing now is to pacify disgruntled advertisers and media buyers and get them accustomed to the idea of paying the same ad rates for one newspaper that they used to pay for two. So far, advertisers say, The Tennessean has managed to hold the line. After all, if you’re a major grocery, department store, or car dealer, where else are you going to go?
Tennessean publisher Craig Moon responds:
The courtesy copy of the article submitted to me is as always full of errors, innuendos and half truths about The Tennessean’s business practices. If I were Henry Walker, I would be ashamed to be constantly directed by the business side of the Scene to spin stories about The Tennessean, the Gannett Co., Inc., and our employees. But as we all know from reading the Scene, Henry is not always accurate in his reporting. For the record, The Tennessean has communicated openly with our advertisers about how The Tennessean would deliver equal to or better advertising results for them.
First, we said we would make the morning newspaper “bigger and better” by adding new employees, more news features and more services. Secondly, most of the unduplicated Banner readers would convert over to the AM cycle. Thirdly, we would expand our more than six-year-old program of converting weekend home-delivery customers to seven-day delivery. Fourthly, we would expand our outside media promotions.
Each of these promises has been met, and our morning paid circulation is now greater than the combination before the PM closed, our unduplicated daily readership is greater than before the closing and most importantly, because of our increased readership, advertising results are expected to be better than with the combined dailies.
I’ll explain this one item for Henry, as our advertisers already know, that newspaper reading frequency is based on habit and our best potential customer is one who is already reading but just not seven days. Our weekend conversion program offers home-delivery customers paying the weekend home-delivery rate an opportunity to receive the seven-day Tennessean for 13 weeks at the weekend price. Why did we expand the program? The Tennessean is “Bigger Better” each weekday, and we wanted weekend customers to see these product changes.
Our last commitment was to keep everyone talking about the “Bigger Better” Tennessean, so I guess I’ll thank Henry for offering me this forum.
Editor’s Note: Columnist Henry Walker’s writing is not “directed” by the “business side” of the Scene. His opinions and his choice of subject matter are entirely his own.
Our last commitment was to keep everyone talking about the “Bigger Better” Tennessean, so I guess I’ll thank Henry for offering me this forum.
Editor’s Note: Columnist Henry Walker’s writing is not “directed” by the “business side” of the Scene. His opinions and his choice of subject matter are entirely his own.
To comment or complain about the media, leave a message for Henry at the Scene (244-7989, ext. 445), or send an e-mail to henry@nashscene.com
