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 This item appeared in the September, 2009 edition of The Publisher.

The big winners in this fast-changing advertising market will be those who manage to make the traditional and the new, print and digital, mass marketing and personalized marketing work together.
— FRANÇOIS OLIVIER President and CEO, Transcontinental Inc.

Canada’s newspaper industry is struggling to define what will be reflected in its future. Will readers still enjoy the mingled smells of newsprint and fresh brewed coffee on weekend mornings or will the hum of the computer have replaced the rustle of the printed page?

While the answer to this question remains elusive, François Olivier, president and CEO of Transcontinental Inc., Canada’s largest printer, sees the future as a marriage of ink and technology.

“The future is both,” he said in a speech to Montreal’s Canadian Club earlier this summer. “The printed word will continue to be a key element of any communications, sales, and marketing strategy for a long time to come, but it will be complementary to the new media. And vice-versa: the new media are even more effective when combined with print.”

Olivier went to say, “These days, it isn’t enough to produce high-quality content. That content has to reach the target consumers where they are and when they want it.”

But the fact that there is no single target market for news readership means that the future vision of the industry continues to be murky.

Dr. Ivan Emke, associate principal of research at Sir Wilfred Grenfell College in Newfoundland says, “Reading newspapers online is fine for someone like me who reads several daily papers and who is glued to a computer most of the day, but it doesn’t work well for someone living in a small rural community.”

Emke, who holds two media communications degrees, is a firm believer in the future of the printed word. “Newspapers, especially community newspapers, are major socializers,” he said. “They are the glue that holds communities together, they are the way we talk to each other, and more importantly they have archival value (as historical records).”

Not to discount the online news business, Emke says, “One realistic online value of community newspapers would be to sell a version to expatriates who wish to keep up with their home communities.” However, as his research shows, “It is not expected that local people would ever want to go to the web for their local news.”

But readership demands alone will not shape the future of the news media. While journalists still prickle at Roy Thomson’s famed quote, “Copy is something you wrap around the ads,” advertisers will have a major say in how news will be disseminated in the future. As it appears, the advertisers’ vision is as clouded as that of the news publishers.

“If there’s a trend in advertising at the moment, it’s that there is no trend,” says Kathie Braid, vice president of marketing and corporate sales for Metroland, publisher of over 100 community newspapers in Ontario. “Planning cycles have been short and impacted by the recession. For the most part, (large corporations) are sticking with flyers because that’s what works to get the main message out. In-paper ads can be either targeted to the flyers or used for a quick competitive message.” As for online advertising, “I don’t think retailers have found the magic bullet yet,” she said, “though most, if not all, do have their own websites.”

In terms of the future of print, she says, “I take heart in the fact that The Bay has been doing a tremendous amount in paper. That tells me that, in their vision, print is very viable.”

However, Olivier estimates, “By 2012, it’s expected that the Internet will absorb about 25 per cent of Canada’s total advertising pie. Some people see that as a threat. At Transcontinental, we’d rather take it as an exciting challenge that’s opening up new growth opportunities.” As a result, he is looking at a two-pronged approach to the future.

“We often hear that print is in decline,” Olivier said. “Yet for the past three years, our printing and publishing sectors have experienced average growth of about three percent a year. So the so-called products of an earlier era are actually doing quite well. But at the same time, we have undertaken to expand our service, offering to integrate new communications platforms and new marketing services.

“The big winners in this fast-changing advertising market will be those who manage to make the traditional and the new, print and digital, mass marketing and personalized marketing work together.”

In 2008, Transcontinental generated $17 million in revenue from its websites, an increase of 30 per cent over the previous year.

But not everyone wants their advertising dispersed to the world at large. Lana Geisler, who owns a hardware store in Northern Ontario, says her ads in the local community paper are covering an area far larger than her client base.

“Paying for ad distribution to towns an hour away from the store doesn’t make a lot of sense to me, but I don’t have a choice,” she said.

Geisler feels her community paper is more regional than it is local “and I’m spending money for a lot of circulation that isn’t bringing me any business.”

Many rural retailers are wishing for a return to the old fashioned local newspaper lost during the last decades of takeovers and amalgamations. “I can only hope that the pendulum is about to swing back,” says Emke, who feels that a community without its own newspaper means that “widespread communication about events is only possible through bulletin boards or newsletters put out by a school or church or municipal body. In such a case, the efficiency of the communication is questionable.”

Dennis Merrell, executive director of the Alberta Weekly Newspapers Association, says that the majority of that province’s community newspapers are still independently owned.

“I think we’re the last bastion of independent newspaper publishing,” he said, “although Sun Media owns about 30 per cent of the community publications.”

However, he says that in areas such as British Columbia and Ontario, where independents are few, the corporate ownership of community papers “is a slippery slope...it’s an interesting situation and I think the pendulum could swing back because in those areas an independent newspaper doesn’t have to generate the same returns as corporate shareholders expect.”

He points to the community of Jasper, where the Sun Media paper was not well received, and businessmen banded together to create the new Jasper Fitzhugh.

“That’s a perfect example of how a community defines itself through independence,” he said.

No clear picture is readily emerging for the future of the newspaper industry, in part because “consumer habits are upsetting traditional business models,” said Olivier, while Merrell adds, “Current market forces are beyond the control of the publisher.”

However, Olivier remains convinced that “it’s a difficult and decisive time for the future of newspapers. The winners will be those able to reduce their costs and to monetize their online offering. I’m convinced that the publishers with the best chance of succeeding are already showing up as the leaders in their markets based on the quality of their product and their established credibility.”

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