The 32 Cent Solution: News War Simplifies Ad Rates

The newspaper war in northwest Arkansas has resulted in two regional newspapers with advertising rates that are substantially the same in cost-per-thousand circulation.

The rate is currently about 32 cents per column-inch in a daily edition.

“They all came in and made it very clear,” said Rebecca Davis, manager of the Dillard’s Department Store in Fayetteville’s Northwest Arkansas Mall. “They have treated us like kings and queens here. They’ve been very fair. We have all worked together. I’m thrilled and [the company headquarters in] Little Rock is thrilled, too.”

Paul Smith, vice president and general manager for the Arkansas Democrat-Gazette, said that newspaper has dropped its cost-per-thousand advertising rate by about 10 percent since entering an alliance Aug. 19 with Community Publishers Inc., which owns the Northwest Arkansas Times of Fayetteville and the Benton County Daily Record of Bentonville. The D-G is owned by Walter Hussman through Wehco Media Inc. of Little Rock.

The alliance calls for combining advertising and administrative staffs between the three newspapers, but the editorial departments are to operate independently. Editions of the CPI newspapers are inserted inside the D-G and vise versa, depending on which newspaper a subscriber pays for or chooses to purchase from a newspaper rack.

Smith said he sees the alliance as a chance for the partnership to get a lock on two cities that were previously contested turf in the newspaper war — Fayetteville and Bentonville.

Market Domination

The Morning News, owned by Donrey Media Group of Fort Smith, dominates in Springdale and Rogers and has the largest circulation in the market — 36,000 daily. With subscribers in 69 percent of households in Springdale and 67 percent of households in Rogers, The Morning News is a must-buy for advertisers trying to reach readers in those cities.

On Sept. 1, The Morning News introduced a new design, shortened its name from The Morning News of Northwest Arkansas and launched zoned editions of the newspaper for Fayetteville, Springdale, Rogers and Bentonville. The Morning News also changed its page width from 27 to 25 inches, which could save as much as 8 percent in newsprint costs.

Tom Stallbaumer, publisher of The Morning News, said the narrower format makes the paper easier to hold and read but won’t affect advertising rates.

“Our price per column-inch remains unchanged,” he said.

But since the pages have shrunk, the size of the columns has also narrowed, meaning display advertisers are now getting smaller ads for the same price they paid before the redesign.

“It’s still getting out our product,” Dillard’s Davis said. “That hasn’t bothered us.”

To reach the entire four-city metropolitan statistical area, Smith said, an advertiser would still need to advertise in The Morning News and the D-G .

Under the alliance, Smith said the Wehco/CPI newspapers will match The Morning News’ advertising rates, with some variances depending on specific contracts and frequency of advertising. Since the combined Wehco/CPI newspapers have less circulation (between 32,000 and 34,000 daily in Washington, Benton, Madison and Carroll counties) than The Morning News, the cost-per-thousand circulation will be the same but the total cost will be slightly less.

The Morning News currently charges $11.50 daily and $11.80 Sunday for each column inch of advertising if the advertiser buys 101-450 column inches of advertising per month. That means the cost-per-thousand circulation would be about 32 cents per column inch daily and a penny more on Sunday.

The Morning News also breaks that cost down for advertisers who want their ads to appear in only one of the newspaper’s zoned editions. The a column inch of advertising is $5 in Springdale and Rogers, $4 in Fayetteville and $3 in Bentonville. The rates are lower for frequency contracts.

Smith said the rates for advertising in either the Times or the Daily Record and not in the D-G will be the same as they were before the alliance. He said those rates are about 10 percent higher — based on cost per thousand — than advertising in the D-G and a CPI newspaper at the same time.

But the rate to advertise in the D-G and one of the CPI papers is about 10 percent less, based on cost per thousand, than it was for the D-G alone before the alliance. The D-G is using the circulation of its northwest Arkansas edition in Washington, Benton, Carroll and Madison counties to figure the cost per thousand. The newspaper has some circulation in eight other counties as well.

Most advertisers want to reach the entire region, Smith said, but some, such as dry cleaners, need only to reach one city with their ads. The advertisements can be purchased for either the D-G or the CPI newspaper that accompanies it.

Smith said the D-G will be able to raise its national advertising rate because it will be adding the circulation numbers of the CPI dailies to its overall statewide circulation. But the difference won’t amount to much.

“Since national advertising produces only about 5 percent of your revenue, it won’t be that significant,” he said. “Newspapers usually get most of their advertising from inside the state… It will mean much more to the northwest edition.”

Not Worried About Rates

Don Nelms, who owns four automobile dealerships at his Nelms Auto Stores lot in Fayetteville, said he’s glad the area will have another strong regional newspaper.

Nelms, whose business sells some 3,000 cars per year, said he’s not worried about decoding the new D-G and Morning News advertising rates since they’re based on cost per thousand.

Some of Nelms’ franchises draw the majority of their customers from Fayetteville, so he may advertise only in the Fayetteville editions for those. If a dealership sells well to customers in Bentonville, he’ll be sure to advertise in that edition of the newspapers as well.

“Advertising impacts a surprisingly small percentage of the purchasing intenders — a little less than 10 percent,” Nelms said, quoting from studies of auto sales.

“I’m not worried about it,” Nelms said. “It’ll shake out before long.”

Dean Redford, manager of the JCPenney store in the Northwest Arkansas Mall, said he’s yet to hear about the new ad rates from Wehco/CPI.

“As of this moment, nothing’s changed,” Redford said.

Jeff Jeffus, publisher of the Times and vice president and general manager of the Wehco/CPI alliance, said the D-G is moving its advertising staff and business office into the Times building in Fayetteville, and the classified department may follow. The editorial staffs will remain at their old location, he said.

Smith said CPI will halt plans to establish a multi-million dollar printing facility in Rogers called Vision Publishing LLC. The alliance will give CPI access to the D-G’s press in Lowell, making the new printing facility unnecessary and saving money for CPI.



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