The Weekly Reader

American Demographics, May 1, 2002 by Sandra Yin

Overall, national ad buys represent an estimated 10 percent of all revenues for the industry. Over the past few years, alt-weeklies have attracted national businesses such as Sprint PCS, Pontiac and The Discovery Channel - a move that has helped boost gross revenues to a high of $27 million for the Alternative Weekly Network in 1999, up 101 percent from $13 million in 1997. Mark Hanzlik, executive director of the AWN, credits the dot-com boom and big tobacco billings for the growth.

Yet the alternatives still face many challenges in their pursuit of a broader ad base. As in the rest of the media industry, 2001 was a disappointment. National ad sales for AWN, for example, were down 35 percent from the year before, to $14 million. Papers in major urban markets that had depended on growth in national advertising to offset declining circulation were hurt worst. And, then there's the larger problem: Mainstream retailers are reluctant to venture into new territory. What's more, some advertisers still question the legitimacy of a free paper - even though most of the papers are audited by either the Audit Bureau of Circulations or Verified Audit Circulation. The auditors do distinguish between papers picked up and those not.

Jeff von Kaenel, publisher of the Sacramento News & Review, says some advertisers don't see alt-weeklies as a viable option because their direct competitors aren't taking ads in them yet. Publishers also recognize that mass retailers may be reluctant to appear in a publication that contains, say, titillating sex ads. Some publishers have actually weaned themselves off the sex ads or, at least, toned them down to appease mass marketers. Also, the alternatives are at the bottom of the barrel when it comes to media buys. As Michelle Laven, COO and president of the Ruxton Group, describes it, they're the "last guys bought in the national arena and the first guys cut."

But there are reasons why an alt-weekly buy would make sense for an advertiser. When it comes to reaching a more targeted demographic, compared with the local daily paper or the local city or regional magazine, alt-weeklies usually prove to be more cost-efficient. They're also an economical way to "heavy up" in certain markets, says Village Voice Media's Goff. Because most brands want to over-deliver several markets, the alt-weekly sales networks are positioning themselves against a national magazine buy, such as Rolling Stone or Spin. The sales networks can maximize delivery in top metro markets, for instance. "No national product," claims Goff, "is going to give you that degree of flexibility geographically."

Not surprisingly, many of the categories that are interested in alt-weeklies have distinct regional skews, such as liquor and fashion. "It's a way to play to the tendencies of the marketplace that national magazines aren't quite as good at doing," says Peter Gardiner, director of media services at Deutsch, a New York-based advertising company.

While the industry has matured and the papers are considered a more viable medium for mainstream advertisers than they were 20 or 30 years ago, they have not reached their prime yet as advertising vehicles, says Veronis' Broadwater. The sales networks have made some inroads into telecommunications, automotive and technology. But many areas remain relatively untouched. The AWN and Ruxton are eyeing such areas as travel, real estate, financial services and pharmaceuticals for further development.