Getting readers and advertisers

It's a simple equation that guides most newspapers: more readers equals higher advertising rates equals more money.

A second equation has become ever-more prevalent as newspapers struggle to hold onto ad dollars in the age of the internet: advertising migrating online equals lower revenues equals fewer reporters.

But there's a newspaper that's making more money with fewer readers and a larger newsroom. And today, its head honcho was in Toronto to give us a glimpse of this looking-glass world and explain how it works.

"I am so sick and tired of listening to people tell me our industry is over and done and stick a fork in it," Jim Moroney, publisher of the Dallas Morning News, told a session of the Canadian Newspaper Association's Ink + Beyond conference on Thursday.

The Morning News, he explained, had adopted a two-pronged approach to raise circulation revenues. The first part involved upping the price of the paper by 40 per cent. This might sound like suicide for a newspaper desperate to retain readers. But as the Morning News discovered, the rise in revenue (about 23 per cent) more than compensated for the loss of subscribers (12 per cent).

The second part of the plan was to do what few papers in North America have done recently: hire more journalists and make the paper bigger. The rationale is that a higher-quality newspaper will naturally hold onto more readers by providing news -- especially local news -- that people can't find anywhere else.

"We began to put more pages in the Dallas Morning News, we began to hire more writers," Moroney said. "We have more reporters on the street than the local ABC, CBS, NBC and Fox affiliates combined."

The paper is pushing forward, with plans to deliver the News on wireless devices for a fee. There are also plans to make readers pay for much of the paper's regular website, too.

The whole project was coupled with an overhaul of the way the paper sells advertising. Instead of simply selling space in the paper for a fixed fee, the paper's advertising department asks for a per centage of customers' sales, shifting the risk (and higher ad revenues) to the paper. Most importantly, the strategy is designed to build advertisers' trust and loyalty to the News by better serving their needs.

Shannon Kinney, of consultants the AIM Group, reinforced the idea later in the session, summing it up as "asking the advertiser questions" on how the paper can meet his or her needs, rather than simply pitching them the idea of buying space.