Four Revenue Generators Newspaper Publishers Overlook

Among the approaches presented:

1. A resource optimization model publishers can use to measure whether they are investing too much, too little, or the right amount among news, ad sales, and distribution departments for maximum revenue growth. The model was tested on hundreds of newspapers by Thorson, Shrihari Sridhar, assistant professor at Michigan State University, and Murali Mantrala, Sam. M. Walton distinguished professor of Marketing at the University of Missouri.

2. Guidelines for optimal distribution of layoffs and buyouts among departments. This approach, based on dozens of newspapers’ experiences, shows which departments should shoulder the biggest and smallest shares of employee layoffs for optimal revenue and profit maintenance. Developed by Thorson, Mantrala, Sridhar, and Elina Tang of the University of Missouri, the study found that cost-cutting evenly across the board at many newspapers may actually destroy profitability.

3. A new page-view pricing strategy for online and print ads that offers a more accurate picture of consumer online behavior for advertisers, offered by Jim Smith, vice president of research for Morris Communications.

4. Online pricing strategies that can help publishers decide how to repurpose, hold back, or charge for online content that also appears in print. One approach, similar to how movie studios have multiple revenue streams from theater showings, pay-per-view, DVD sales, and foreign sales, was offered by Hugh Martin, associate professor at the Grady College of Journalism and Mass Communication at the University of Georgia. A second approach was presented by Hsiang Iris Chyi, assistant professor at the University of Texas at Austin.

“Newspapers hold rich sources of data which can be mined for additional revenue generation,” Thorson said. “Academic researchers have the expertise to mine this data for the benefit of newspapers and their customers.”

Whole Foods’ Net Falls 32% on Lower Sales

The Wall Street Journal reports Whole Foods Market suffered declining sales and margins. This isn’t really any more surprising than lower numbers reported for the grocery industry at large.

Whole Foods invested a great deal in their image of offering super high quality, organic, sustainable products  and were known for the higher prices accompanied with their pioneering grocery shopping experience.

I predict they will be the first chain to reverse the decline. I say this because Whole Foods is about much more than selling commodities like most grocery chains. Their back story offers the possibility of vibrant, optimal health for their employees, customers and the planet. That’s the holy grail of leverage that shoppers and businesses are searching for – doing something good that makes a difference.

It will be interesting to watch how they engage their customer base with value added benefits. It will take more than just offering store brands with reduced prices. Everybody’s doing that.

Whole Foods has a “tribe” of loyal customers who are in alignment with their Whole Food, Whole People and Whole Planet mission. That mission will continue to serve them in spite of the current circumstances.

Now if they only revisited some of the historic sales results generated from in store experiments distributing Nutriton News, they might just find their time spent  in the down trend purgatory to short lived indeed.  Newsflash to shareholders:  what else are they doing to generate a 950% increase in a supplement category within three weeks? Or a 24% increase the first month and 34% increase the second for a single sku?

The context is decisive. Empowering their shoppers with the experience of the healthy proposition they offer will do more than any belt tightening or cut backs will ever do.

The supplement category grew 5.9% during the last quarter of 2008 while all other categories were stagnant or flat. It looks like promoting an access to actually being healthy may be the answer to predictable, long term growth for a lot of industries. We can’t wait to take that ride with them.