Ok, without getting too in depth, i'll lay out the scenario hoping for some feedback from the intelligent forum that is 'off-topic'....


I own a smalltown newspaper. We're about 7 months old and went in direct competition with what is now a slightly larger newspaper than ours (they've been around for 6-7 years).

in just over seven months we've accumulated more local ads than they have in their publication. now they're beginning to feel the heat from the owner (their publication was bought by an owner of five papers just after we started our publication).

for every dollar we lose (we're still losing money on a weekly basis, but not alot. it's only been seven months), i'm guessing they're losing two. if they continue on their path, i have no doubt the owner will pull the cord on his investment (but obviously can't forecast when).

the problem is, their financial backing is stronger than ours (the guy is a millionaire, but obviously didn't get that way losing money on a weekly basis like he is currently with the current situation. his other papers all make money i assume).

we've been staying the course, but recently (out of desperation i believe), they've been offering insanse pricing to try and lure advertisers away from us, and to a limited extent it has worked. but in the past week, they started a new campaign where they pretty much cut their ad rates in half. this will pose serious problems for us i believe.

so the question becomes, how do we respond? options?

do we match the rate and bleed a slow death? do we stay the course hoping our superior product sells itself? any thoughts?

we've been ethical and honest with our advertisers, and they've been nothing but mishievious, shifty and negative as of late. they play games, offer different ad rates to different folks (even going as far as offering TWO FREE FULL COLOR FULL PAGE ads to their center spread advertiser after they lost them to us to enhance the outward appearance of their publication). the public is not aware of all their shifty practices. by outing them publicly in our paper, would that hinder or help?

it's really become a nightmare. just looking for any and all suggestions and i appreciate them in advance.

as a sidenote, the publisher (not owner) of this publication is a convicted sex offender, which i personally have no tolerance for. no joke.


thanks in advance,
rick

 

In Citizen Kane one of Mr. Kane's underlings tells him that his publishing company lost one million dollars that year. Kane's response was, "And we'll probably lose a million dollars next year. At this rate, we'll go bankrupt . . . in about sixty years!"

It sounds as though you cannot outlast them in the slow-bleed game. I think you're best off selling your strengths: integrity, responsiveness, circulation (?), average phone calls per ad, and so on.

I certainly wouldn't suggest arson.

Good luck.

 

That's the easiest game for them to play since they have the $$$ to operate at a loss long enough to put you out of business and creating a monopoly so that they can drive the prices back up. You may wish to express your "genuine" concern for the client by informing them of this inevitable conclusion so that they start thinking about tomorrow's sustainability rather than today's freebies.

Dont play dirty, mud sticks and it reflects bad on your image. What's that saying? Dont argue with imbeciles they'll drag you down then beat you with experience I think that's applicable to your case myself, dont play dirty with scum because that's their game

 

Well, I'm a marketing consultant & business coach, so I see this happen everyday...

Someone mentioned previously that you need to focus on your strengths, and that's absolutely true.

Financially, you're not a match for this other newspaper, so you've got to use guerilla marketing tactics. You've also got to market by stealth. Honestly, your competition won't know what hit them!

 

i appreciate the feedback all....


as a marketing consultant/business coach, i definitely appreciate your input. "marketing by stealth"....i don't suppose you could elaborate on this a bit?

i'm definitely all ears to any/all suggestions. thanks again everyone

 

what are you core competencies? what do you do best? what can you do to differentiate your product (advertising) from your competitor? i think you have all the answers you need, but just need to sit down and think it all the way through.

 

I'm not gonna spew some crap I learned from reading Michael Porter.

therookie is looking for some concrete/step-by-step advice.

Here is my no bs assessment:
1) You shouldn't be going head to head. I wouldn't open up a burger joint across the street from a McDonalds unless I could offer something they don't (i.e. lower price or better product).

2) If you have a lower price or better product, then you need to communicate that to your customers, in your case the buyers of ads. You said you have a better product, so market it accordingly. Can you get more subscribers? Get some exclusive columns in your paper. Small town? Target the local church increase that circulation. Online edition?

3) I don't know jack about newspapers, but TV and radio sell by targeting specific demographics. This is tracked by Nielsen and Arbitron, respectively. You should gather you subscriber data (assuming this is a purchased paper) and breakout what demographics/locations/market share you are strong in. Use that info as a marketing tool. Do your subscribers live in a richer area? Ages?

4) If you run a free newspaper, then you are probably screwed. You can't compete on pure circulation if they have deeper pockets and being in a small town doesn't allow for much differentiation.

5) You may even want to consider communicating the situation to your advertisers. If you have strong relationships, then they may be able to see the long-term consequences of buying from your competitor.

6) Sunk cost - it is better to get out of a bad position early than to ride it further into the red. Regardless of how much time and money has been spent, if their is no chance of recovery...get out now.

I hope that you already know most of those things, but on the slight chance that you don't, now you do and knowing is half the battle.

 

You are getting some good advice about differentiating yourself. Somtimes there isn't a big enough difference to justify a full page ad cost of twice the price.

Having said that, I own an advertising agency and deal with this type of thing everyday. It is my job to exploit these situations for the sake of my advertising clients. If the two papers are similar, you're in trouble.

It would be a mistake to "out" them in your paper... 9.9 times out of 10 the public won't care. They choose one paper based on the fit it has with their preferences. Advertisers buy the paper based on the qualitative and quantitative audience it delivers. I wouldn't care unless there was something illegal going on. They can sell full page color ads for $1 if they want.

 

Who's Michael Porter?

 

harvard uni mba professor as well as marketing and economics guru