Open Case Structure( please follow this rules and solve the: How to Make Money in Newspaper Advertising) 1 Current situation analysis (a) industry analysis: Porter's five forces model (b) company analysis: SWOT analysis 2. Problem identification (a) Primary problem (in a complete sentence) (b) Secondary problem (only point out the problem)

3.Problem solutions

How to Make Money in Newspaper Advertising

The U.S. newspaper business is a declining industry. Since 1990 newspaper circulation has been in a steady fall, with the drop accelerating in recent years. According to the Newspaper Association of America, in 1990 62.3 million newspapers were sold every day. By 2011 this figure had dropped to 44.4 million. The fall in advertising revenue has been even steeper, with revenues peaking in 2000 at $48.7 billion, and falling to just $20.7 billion in 2011. The reasons for the declines in circulation and advertising revenue are not hard to find; digitalization has disrupted the industry, news consumption has moved to the Web, and advertising has followed suit.

Declining demand for printed newspapers has left established players in the industry reeling. Gannett Co., which publishes USA Today and a host of local newspapers, has seen its revenues slip to $5.3 billion in 2012, down from $6.77 billion in 2008. The venerable New York Times has watched revenues fall from $2.9 billion to $1.99 billion over the same period. The industry has responded by downsizing newsrooms, shutting down unprofitable newspaper properties, including numerous local newspapers, and expanding Web-based news properties as rapidly as possible. It has proved to be anything but easy. Whereas consumers were once happy to subscribe to their daily print newspaper, they seem to loathe paying for anything on the Web, particularly given the large amount of free content that they can access.

Against this background, one local newspaper company is swimming against the tide, and making money at it. The company, Community Impact Newspaper, produces 13 hyper- local editions that are delivered free each month to 855,000 homes in the Austin, Houston, and Dallas areas. The paper was the brainchild of John Garrett, who used to work as an advertising director for the Austin Business Journal. Back in 2005, Garrett noticed that the large-circulation local newspapers in Texas did not cover news that was relevant to smaller neighborhoods such as the construction of a local toll road, or the impact of a new corporate campus for Exxon Mobil. Nor could news about these projects be gleaned from the Web. Yet Garrett believed that local people were still hungry for news about local projects and events that might impact them. So he started the paper, launching the inaugural issue in September 2005, and financing it with $40,000 borrowed from low-interest credit cards.

Today the paper has a staff of 30 journalists, about 35% of the total workforce. The reporting is pretty straight stuffthere is no investigative reportingalthough Impact will do in-depth stories on controversial local issues, but it is careful not to take sides. That would just lose us business, says Garrett. About half of each edition is devoted to local advertisements, and this is where Impact makes its money.

For their part, the advertisers seem happy with the paper. Weve tried everything, from Google Ads to Groupon, but this is the most effective, says Richard Hunter, who spends a few hundred dollars each month to advertise his Houston restaurant, Catfish Station. Another advertiser, Rob Sides, who owns a toy store, Toy Time, places 80% of his advertising dollars with Impacts local edition in order to reach 90,000 homes in the area. An analysis by Forbes estimated that each 40-page issue of Impact brings in about $2.50 in ad revenue per printed copy. About 50 cents of that goes to mailing and distribution costs, 80 cents to payroll, and another 80 cents to printing and overhead, leaving roughly 40 cents per copy for Garrett and his wife, who own the entire company. If this analysis is right, Impact is making very good money for its owners in an industry where most players are struggling just to survive.