Michael: Hey Greg, it’s Mike Senoff.

Greg: Hey, Mike. How are you?

Michael: Good, really good, how are you doing?

Greg: I’m fine.

Michael: I really appreciate you doing this for me.

Greg: My pleasure. Sorry, it’s been so crazy hooking up. Morning running from one place to another.

Michael: I understand. I called you on quick notice and I figured I’d give you a call. You’re a newspaper man. So, I’ve got a lot of content on my site, and it’s something that I don’t have anything on as far as expertise within the newspaper industry, and it’s pretty much a mystery to a lot of people. I thought it might be of value, and what we can do is if someone’s interested in consulting related to the newspaper, if someone contacts me from the interview when I put it up on the site, I can certainly direct them to you and we can work something out if that’s good with you.

Greg: Sure, that’d be fine. Okay, well, my name’s Greg G, and I live in Lexington, Kentucky and I’m President of a company called Blue Grass Business Growth. It’s a small business consulting company that I’ve started a little over a year ago. Prior to that, I’ve been in the newspaper industry for 20 years. When I left the industry I was the vice president of circulation.

Michael: Was it a newspaper group or a specific newspaper?

Greg: It was part of a newspaper group. I was with the Lexington Herald Leader which is part of Knight Ridder, which is the second largest newspaper group in the country.

Michael: What’s the nature of the newspaper industry? Did it start out a long time ago where there were a lot of independents and then they just got gobbled up by the big guys?

Greg: Well, that’s correct. There’s still a whole lot of independents, but more and more they’ve been bought by different groups or they’ve grouped together so that they could better serve the audience through different advertisers.

Michael: So, the Lexington Herald, is that who you were with?

Greg: Lexington Herald Leader, yes.

Michael: And, then they’re owned by Knight Ridder.

Greg: By Knight Ridder.

Michael: And, they’re the second largest newspaper group in the world?

Greg: In the country. I’m not sure. Some of the world wide circulations of different publications are quite large. We had groups from Japan and other countries come through and visit while I was there.

Michael: How many papers does Knight Ridder control?

Greg: I think the total numbers is somewhere around 40.

Michael: Forty papers?

Greg: Right.

Michael: And, what are some of the bigger names that they own?

Greg: The San Jose Mercury News, the Philadelphia Inquirer and Daily News are a couple of the larger papers.

Michael: Who’s number one?

Greg: The largest would either be the Philadelphia paper or the Miami Herald down in Florida.

Michael: I mean as far as the largest group.

Greg: Oh, the largest group, that would be Gannett which owns USA Today and some other publications.

Michael: Okay, great. You say you were Vice President of Circulation?

Greg: That’s correct.

Michael: So, what does that mean? What was your main responsibility being Vice President of Circulation?

Greg: Well, being Vice President of Circulation, my main responsibility was to deliver the readership for the advertisers. We would do everything we could to keep the customers that we had and grow the customer base, also to increase readership. So, then I had responsibilities for the sales, service, collection, and all the back room kind of things that go on – anything related to the customers of the newspaper.

Michael: When you say deliver readership, I just want to put it in perspective. You needed numbers to show your advertisers because the more numbers you had, the better it was for the advertisers so when the advertisers are paying for advertising, they’re looking at cost per thousand. They’re looking at readership. And, they aren’t going to advertise with you if you just don’t have a large circulation. Is that correct?

Greg: I’ll say it’s partially correct. As things evolved over the years, advertisers are more savvy and they know that our goal was not just to give them the numbers, but was to drive their turnstiles, get people in their stores and make their cash registers ring because it doesn’t matter how nice your ad is or how many people it goes out to, but if it doesn’t cause people to buy your product, you’re sunk.

Michael: Over those years, how much responsibility would a typical newspaper ad rep take in getting those people into the stores? Were they more in the past just order takes where they’ve got the sale, they’ll slap an ad together, they don’t know much about advertising or writing or headlines or anything like that? Or were they involved or are they getting more involved today to get people into the stores so the advertisers remain?

Greg: That’s a great point because in the past they really were more order takers, and in the last ten years, I would say, most advertising departments at your mid-sized papers, the reps really are more skilled. They’re better educated. They went through training to where they understand that repeat business from advertisers is really what they need, and they have to really go ahead and be a partner with that advertiser and look for the best places for them to place their ads. So, they’re getting real value from every ad that goes in.

Michael: So, does Knight Ridder put their ad reps and their ad departments through some good training?

Greg: Absolutely. They have new rep training, and then they have other courses. They also bring in different consultants from time to time that will work with an ad department.

Michael: Advertising consultants?

Greg: Sure, and I think that’s one of the things when you’re looking at buying advertising, one of the things that I would stress is to really form a relationship with a representative. It’s good to know the supervisor or manager of the department, but it’s that representative that you can have a relationship with because they’re going to, in the end, be your best ally to get you great pricing.

Michael: So, you can access all the resources that they’ve had, that Knight Ridder’s invested in their training and such.

Greg: Right. My best advice would be if you get a representative that you just can’t work with, ask up the line, “Who else can I work with? I want to spend some money with you. Who can I work with?”

Michael: So, would you say today most of the larger newspapers in the metropolitan cities, these reps, I guess a lot of people have an image of a rep as some unskilled person who’s out there hustling space and knows nothing about advertising. Is that true today still or do you think it’s changing?

Greg: In some places, it might true, but I’d say more so you’re going to get very educated folks who had a degree in marketing or advertising or at least have a college degree. They’ll know how to think and problem solve and help you, and along with that, you’re going to have people who are getting on-the-job training and extra training through their company. Now, in the smaller newspapers where the circulation is less than thirty or forty thousand daily or if you get into weekly situations, well, you may not get the same kind of quality.

Michael: Bring me into the ad department. If you can give me an example with your Lexington paper – what did the ad department look like and how is it structured? The reason I ask is I want to get a psychological profile of how that ad rep is motivated, what they can and can’t do, before we get into the negotiating better ad rates.

Greg: Within our paper, this is an ad director who has responsibility for that whole division. Then, the ad department was broken up into what we call classified advertising which would typically handle anything that came out in a classified section which would be your car dealers, your homes for sale, anything with real estate, items that an individual would be selling through classified ads, all your employment ads. All of those things that ran in the classified section were handled through a classified manager. Typically, within that, you would have people who were both internal on the phones all day taking orders and also calling people back, and then you had outside sales reps, and those were the ones that worked with like the car dealers, the realtors, and employment agencies.

Michael: Right, now before we move on, I want to ask you for a paper to survive, how much income is there in classified ads compared to the display advertising? Where’s the money in the newspaper? You’ve got subscriptions and you have advertising.

Greg: Right. The typical split is probably about two-thirds to three-quarters of your revenues are through advertising.

Michael: Two-thirds to three-quarters?

Greg: And, sometimes as high as 80-85 percent will be advertising, and then the subscription part depending on the size of the paper will bring anywhere from 15-25 percent.

Michael: Now, split up the different advertising. You’ve got the classified, and you’ve got display, right?

Greg: You’ve got classified. You’ve got display advertising which is basically split between your local advertising, your special sections that are very popular with daily newspapers, and even in your weeklies which will be around a certain theme. Maybe it’s around a neighborhood or one county theme, or an event that’s going to be happening. Then, you also have your national advertising, which is advertising that typically sources from outside of the local community, which are the banks, or auto, or medical, or something – prescription drugs – anything like that they’re doing a national ad campaign and you’re just one of the newspapers that they’re purchasing.

Michael: So, how does the income for the paper split up, if you split it up between national advertising, classified advertising, and say all other display, local and regional?

Greg: I’m not really as sure on that, but I think the majority of it is display, then classified, and then national is how it would sit.

Michael: Do you have an account rep that handles only the national advertising?

Greg: Typically, your national depending on the size of the paper could be a part time job for one person, or like at our paper, there was one person plus a manager that could involved with that. Within the display side, you’ve typically got, depending again on the size of your town, but for us, we had a display manager who actually had a couple of supervisors who managed anywhere from eight to twelve sales reps and then there was some support staff, artists, and different folks who would work with these folks on the ads, but every rep had a territory, and so their territory was either geographically based or it was categorically based. So, they might have all the physicians, or they might have all the physicians for half of the town, or they might have different zip codes, or they might have some boundaries that were drawn inside or outside of that certain geographic area.

Michael: What’s the typical lifespan of an ad rep? Do they churn them and burn them?

Greg: It’s not really that bad, but it’s one of those things where after four to six months you know if they’re going to make it or not, if they need to look for a different career outside of the newspaper, or maybe a different area within the paper. We really had some good longevity within the Herald Leader, folks that had been there ten, fifteen, twenty years, and then other folks that would be their five, six, seven years and move to another industry or to another newspaper.

Michael: And, these reps are out in the field. They’re outside reps.

Greg: Right, and it’s always one of those interesting things that folks who are very successful reps will get promoted to supervisor. Sometimes they would do well as a supervisor, and they’d get some training there because they’re helping their reps problem solve and show them what they’ve done. Then, other times, they just really didn’t want to do that. They’d rather go back and just sell.

Michael: Is a rep working strictly on commission? Or does he come on a base for a couple of months?

Greg: I’ve seen different structures, and most of it involves a base with commission. I’ve seen territories set up at different times where different directors would set up an area that was just a draw, and then we’d go to strictly commission with it being set up to where that would basically how they would be justifying the addition of new people that this is all going to be new money that comes in.

Michael: Do they have quotas to meet every month?

Greg: Exactly. There’s always a budget that they need to hit, and that’s one of the important things to know when you’re buying advertising is what time of month it is. If they’re trying to finish out a month or a quarter or a year, so to understand whether they’re based on the numbers of ads or revenue goals. Are they just trying to bring in a certain amount of revenue.

Michael: If you’re going to give me some secrets on buying regional or national advertising with your newspaper, and you being an insider for twenty years, what advice would you give me to help me negotiate the best rate? What would be the best time? Who would I contact? What would I say? Could you role play it with me?

Greg: Yes.

Michael: So, let’s say I want some newspaper advertising. I’ve never advertised in the newspaper. You’re going to recommend I call and ask for a rep and have a rep come out, right?

Greg: Exactly.

Michael: Now, let’s say I’ve never advertised in a newspaper, but I know a little bit about cost per thousand. How could I get a great rate? And, are there ways to really steal great rates with newspaper advertising like remnant space, or any kind of techniques?

Greg: First, if you already know what your goal is which is what you said, to make the phone ring or you’re selling a certain product, or having people for an event, really communicate that to the rep. Be honest with them, “Here’s what I’m trying to get. Here’s what I’m trying to do. I want to achieve this goal.” Then, I would say to brainstorm with them what kind of things they recommend. That gets them involved, and actually will get them to be able to go beyond, “Here’s what I’m allowed to do.” They’ll start to think about creative ways to help you. A couple of things – you had mentioned remnant advertising – that’s one of the little known facts or maybe it’s misunderstood that you can go in and if you don’t have an exact day that something has to run, if you have some flexibility, they may be running a sale whether it’s each month or every other month or just once a quarter on full page advertising that you might get for an eighth of a page price.

Michael: And, your rep is going to know all about that.

Greg: They would know that or they would know when it would happen, and if you’re able to say, “Boy, I’d really love to have a way to run a full page ad twice a month, and if it ran in the front section, but you know Joe, the only thing is I only have this much money to spend.” Then, at least they’re on notice about that, and when that happens, you’re going to be one of the people they call and say, “Hey, we’ve got a full size sale. Would you like to go ahead and place your ads?” Or you could say, “I’d like to run on a standby process.” It’s kind of like the airlines when they have the seats or hotels, put on this priceline.com and stuff. They’re willing to let some rooms go at less than what the regular rate is, at least they’re making some money. That’s the way it can be with newspaper advertising is if you run on a standby process rather than turning that over to news whole and they go ahead and let that go at a much less rate.

Michael: Let’s talk about scarcity. Let’s say a newspaper claims that they’re almost booked up and that we only have so much space available. Is that true with a lot of newspapers? Or can they always print more pages and put more editorial in the newspaper? Or are they limited to the number of pages?

Greg: Some days they really are limited, and most newspaper of any size run on a pre-print section each day, too, which means that will print a day or two days ahead of the regular news section. So, they have to know what size that section is going to be. Everyday there’s a news whole budget meeting between advertising and the news room to say, “Here’s how many pages we’re going to run.” If extra ads came in, you either have to go up two pages or four pages with their newspaper. So, if they only had one page of advertising, it would be a huge increase in the newsroom, but they might not want to do that.

Michael: Are there a lot of people out there who are asking for remnant or standby space? Are people savvy to that? Or is it pretty much a secret?

Greg: I think there’s people that are probably asking for it, probably more through ad agencies and some other folks, and a lot of times that’s the way somebody’s going to get that. But, then again, you’re probably not saving as much, but if you just don’t have the time to deal with newspaper, then you probably would be best using a good ad agency.

Michael: So, it is negotiable, and forming a relationship with an ad rep you like, letting them know your needs. They know what’s going on. They know what’s going on sale, and they’re going to keep you informed if they’re motivated, hungry rep.

Greg: Exactly, and again, just be honest with them about what your budget and also what you’re looking for. I would say the other thing is to try to establish a relationship with somebody within the marketing department of the newspaper.

Michael: Why is that?

Greg: That’s a little bit different than the advertising. For example, one of the things that we run everyday within the paper was called “The Deal of the Day”. A lot of papers have went to that which is a coupon for a product that is absolutely free or at a huge discount like a buy one get one free in the paper each day. So, it kind of offsets the cost of the newspaper because you’re always going to get a free soft drink or a free dry cleaning or free book. You name the product. The thing that a marketing department, which usually has control of that space, they can help you out with that, but if they don’t have something like that, you can go in and propose and say, “Hey, every Tuesday, we’re going to run and ad that would give away a free whatever, and all we ask is that you anchor that space or you put that in there and we’ll tell you what the results are.” We’ve had advertisers who’ve done that that are local that have had thousands of coupons redeemed that three day period.

Michael: So, the lesson is if you’re advertising in the paper, get in touch with the marketing department. Tell them you’re advertising and you want some additional help since you’re a loyal customer and you’re advertising in their paper.

Greg: And, not just that, Mike. Maybe you’re advertising is to say, “Hey, what I’d like to do is try this, and this will be a value for your readers, and it’s something I’d be willing to give you a testimonial later to say, ‘Hey, this deal really worked for us.” Do you know what the cost of that advertising has been?

Michael: None.

Greg: Zero, that’s your best deal.

Michael: What about when an ad rep says, “Mr. Senoff, you want to run your ad six to twelve times because the more you’re in the paper, the more people get to know about you, and the more response you’re going to get. Sometimes it takes a couple months.” Is that a bunch of B.S.? Or, is that just so they want to sell multiple insertions?

Greg: If you’re really trying to build image or name recognition, that’s probably a true statement. But, if you’re trying to get people to buy a product or come into your store, you just need to do a good ad and figure out the best time to do it.

Michael: Is that a negotiating point when they give you a twelve time rate or a ten time rate or a five time rate, and they give you a one time rate on a trial? But, it’s just negotiated. You want that twelve time rate, but you only want to do it one time.

Greg: Absolutely. I think coming in as a new advertiser, you especially have that leeway because that rep – it’s very easy for them to go to the supervisor or the manager and say, “Hey, I can see where this can become a bigger account for us if we’ll just give them that rate.”

Michael: Will the rep have to get that approved through a supervisor? At least at your paper, did they have some leeway to make those decisions? Or did they always have to go back to the manager.

Greg: I would say they had some leeway, but probably for the deeper discounts, they always had to get approval because human nature would be, especially if their on a volume goal rather than a revenue goal, and they’d just be trying to get the ads they could and they might give it away too much.

Michael: Any other secrets that you could tell me as far as inside advertising with the newspaper industry?

Greg: Well, the other thing I would just add to in knowing the folks in the marketing department is to look at what can you do in sponsoring an event or a section to where your name might get splashed more within the paper and give you greater bang for your buck, but again, it’s not at the advertising rate, it’s more of a marketing rate which still may have some costs to it, but if you’re in the type of business where you’re going to be giving away a trip, or you’re going to be giving away a publication or any number of products, or you’re at some type of fair or festival, or there’s some type of charity event. Just again, hooking up with that and saying, “What if we did this?” It becomes kind of a bartering situation again, just like with most companies that have different budgets – some for marketing and some for advertising. Within the newspaper, there’s usually a marketing department. They work hand in hand with the circulation folks and the advertising.

Michael: How about barter? How much trade do newspapers do?

Greg: It really depends and to tell you the truth, that has switched so much over the years, and it depends on the group. Most of the times, when you see a newspaper has become a major sponsor of an event or some kind of public policy change or something that they’re getting involved in, usually it is a situation where if the newspaper’s donating $100,000, it’s all been in tie-in type of advertising. It’s usually very few dollars that actually go into it.

Michael: So, when you say it’s switched, is there less of it or more of it now?

Greg: Over the years, I thought it would bounce back and forth, but it tended to be tighter and tighter. It was becoming less and less, but it’s still almost 98 percent of what they do as far as them giving. If you are negotiating that, you have to keep in mind that there’s extra charges a lot of times that are added within ad rates for being on the Internet. So, if that’s important to you, then it could be a good deal. Or if it’s not, just tell them not to put you on the Internet. It’s usually a hidden clause there. Also, getting colored advertising, spot color or full color, that can be a negotiated item where you might say, “I’d like to run, but I’d like to run at the black and white rate, and if you can make it happen with color, I’m going to be a lot happier.” Again, it goes back to that relationship. The other thing that’s totally free advertising is actually pretty well read type thing is to look at calendar listings that most publications do to where they’re looking for if you’re having an event or you’ve had a change within your company – we have a local computer club here within Lexington, and I swear they get every type of calendar that the newspaper ever puts out.

Michael: Who do you contact for that?

Greg: If people will look through the newspaper, take a whole week’s worth or a couple of week’s worth of newspapers and look at each different day, every page of that calendar will always have an email contact within the newsroom or the marketing department, usually the newsroom, and they’ll have an email or a phone number contact.

Michael: And, you just email them and say, “I have an event.” And, they’ll list you in there.

Greg: Right, and I would say it goes back to the same thing. That’s what I suggest to my clients is get to know that person who does that. Don’t just email them, but call them and just talk to them and say, “I would really appreciate it.” When they ran something say, “It really helped me out, and is there a better way that I can send stuff? Do you want it in email? Do you want hard copy?”

Michael: In your consulting practice, do you have help people negotiate advertising rates? Is that one of your services?

Greg: I will suggest different things. I’m not an ad agency. I don’t have any special rates with the paper, but I’ll hold their hand as they do it.

Michael: So, who should contact you? If someone’s listening to this and they have an interest in growing their enterprise through the use of newspaper, whether it’s local, regional or national – your experience of 20 years, you can definitely give them some insight into accomplishing that.

Greg: I would certainly be glad to talk with them, give them help, brainstorm with them, help them do the right research into their own local market.

Michael: Nice to have a good contact, a newspaper man like yourself.

Greg: Thank you.

Michael: I appreciate it, Greg. This has been great.