Miami Herald Case Study

INTRODUCTION

​The newspaper industry is a very dynamic market, and has recently become subject to increasing amounts of pressure to meet profit margins. Each newspaper faces revenue dilemmas in terms of advertisements, their primary source of profit. In the 1990’s, advertisers’ budgets were quickly shrinking, the sources of their advertising dollars were changing, and there was increased growth in competition for these dollars.

​The most significant area of ad revenue growth was pre-printed inserts, or “pre-prints.” However, pre-prints do not supply newspaper companies with as much revenue as other forms of advertisements, such as run-of-process advertisements (ROPs). Pre-prints have in the past been highly profitable to newspapers, but they are beginning to take much needed sales away from the more expensive ROP advertisements. Analysts looking into these revenue dilemmas have found that in order to continue on in this business, newspapers will need radical change or will be forced to slash their advertisement prices.

​This slash in prices is mostly in response to the very active competitors in this industry. They must decrease their prices in order to not only retain the advertising accounts that they already have, but also to win back accounts from television, radio, and other forms of print media. The Miami Herald’s largest competitors are electronic, radio, television, and online media forms that deliver the same information they carry in their newspapers. In order to respond to these forms of competition, the Miami Herald has tried to appeal to the younger “television watching” generation through the use of bright colors, and prose designed to grab the attention of a busier society.

​In order to achieve sustainable growth, David Lawrence, publisher of the Miami Herald, has pointed out the newspaper’s need to “look at a lot of different opportunities in national and international markets” and that the company’s largest...