Newspaper group Trinity Mirror cut its dividend last week as the group warned advertising had fallen around 30% in the first two months of this year.
The group, which owns the Daily Mirror and more than 140 regional newspapers, reported a 22% fall in operating profit in 2008 to £145.2m, down from £186.4m the previous year.
Revenues from retained businesses fell 6.5% to £871.7m, down from £932.3m.
This is shocking news. We all know revenues across board the are under intense pressure but this is unprecedented. We are in uncharted territory.
So what to do? Well here a few toplines from our 'Growth Through Consolidation' white paper..
1. Sure up the revenue base. Talk to advertisers and their buying agents find out what they are prepared to keep buying. Try to move to contracts with Agencies that maintain spends.
2. Expand the revenue base to include additional channels such as direct to consumer goods and services (insurance, insurance, insurance). Leverage the large audience base immediately by making it more available to brands/products
3. Stop looking for new readers; you have more than enough in your 'pool'. Devote your energies to initiatives that get them to buy you more often. Move heaven and earth to get readers on a 'contract'. This will increase frequency of purchase and reward loyalty. This may look like a subscription scheme but should act like a loyalty one.
4. Sub contract (if possible) certain expensive elements of the paper. Supplements etc
5. Work with news agents to improve availability efficiency (millions could be saved here)
6. Think twice about TV advertising (its expensive)...talk to your audience more directly
7. Recognise that economic times are tough and readers are hurting - opportunity to bring back big value 'token collect' promotions that reward readers (with real value) for buying the paper
8. On the product side - picking up again on the dire state of the economy do more to support and guide your readership. Entertain them yes. Inform them yes. But become their friend in these troubles times. You cant do enough in this area.
Newspaper have got to think differently. Use the brand and critically their trusted customer relations to drive up revenues.