26 May 2010

Print Advertising and Economic Development

Mr. Monzon co-founded GIS Planning Inc., one of the fastest-growing 5,000 private companies in the United States, according to Inc Magazine. As developer of the first GIS-based website for economic development, Mr. Monzon is an entrepreneur, innovator and technology professional. With over 15 years of experience developing location-based applications and GIS based websites, he has received multiple awards in both the field of Economic Development and Geographic Information Systems. His work has appeared in The Wall Street Journal, CNN, NBC News, and numerous GIS-related publications. Mr. Monzon has lectured about Internet GIS in Europe, the United States, and Latin America. Prior to GIS Planning, Mr. Monzon worked for Vectiv, an online GIS site selection company focused on the retail industry.

In our 2008 book,  Economic Development Marketing: Present and Future, we discusse how national trends in advertising highlight the declining importance of print ads in a media universe that is increasingly positioned online. In an outlook report for 2007 Fitch Ratings wrote: “The trend that will continue to affect the media universe... is the ongoing shift in advertising dollars from traditional media into nontraditional media, most notably the Internet.” For example, the Newspaper Association of America forecasted for 2007 that ad spending on the Websites of newspapers would increase 22% from 2006, while at the same time, ad spending in the print editions of those

Total Annual Ad Pages for Site Selection Magazinesnewspapers would increase only 1.2%. The decline in advertising within the site location magazine industry is more moribund and is illustrated in Figure 2-1, which shows ad pages declining in every site location magazine from 1999 to 2007. Ad revenue has also been declining (you can see more about this in figure C-1 in the book appendix). Two of the leading publications for the site location industry have ceased print publication within the past few years: Plants, Sites & Parks in 2004 and Expansion Management in 2008.

Over 99% of site location publications are distributed free of charge to business subscribers. As of mid-2007, Site Selection was the sole industry publication receiving culation, which amounted to only 0.8% of its total circulation (see Table C-2 in the book Appendix). Not only are few business customers paying for these publications, but many customers are not even requesting them. As circulation numbers for personal subscription requests have dropped over the years, site location publications have increasingly sent unsolicited subscriptions to executives listed in business directories, such as Dun & Bradstreet. Personal direct requests for the aforementioned site location publications declined from 81% of total circulation at the end of 2000 to 66% in the middle of 2007, while at the same time circulation from business directories grew from 2% to 24% (see Figure C-2 and Table C-3 in the book ppendix).Excluding Expansion Management, the remaining three active print publications send 36% of their magazines to people that have not requested the magazines.

Although the 2008 shuttering of the print version of Expansion Management could be assumed to be an opportunity for the remaining publications to absorb its market share, the similar historic evidence does not indicate that will happen. The year after Plant, Sites & Parks closed down, its competitors all experienced dramatic drops in the number of advertising pages placed. Executives in manufacturing industries constituted 69% of the audience for these publications on average in 2007 (see Table C-4 in the book appendix). As more manufacturing jobs move out of the United States, site location publications are responding to this trend by running stories about business climates around the world. Local economic development organizations that choose to advertise in these publications are therefore reaching an audience that is primarily made up of businesses in a declining employment sector. Some of these manufacturers are reading the publications to learn more about how they can outsource their labor overseas or implement facility expansion outside of the USA. This situation could present a good marketing opportunity for organizations outside of the USA, but may point to an advertising mismatch of US-based economic development organizations’ objectives with those of the magazines’ readers.


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