Wednesday, May 09, 2007

Macy's to Publishers: Engage Audiences

Macy's to Newspapers: Engage Audiences
Tuesday May 8, 1:31 pm ET
By Seth Sutel, AP Business Writer
Macy's Chief Marketing Officer Delivers Tough Love Speech to Newspapers

NEW YORK (AP) -- The chief marketing officer of Macy's department stores delivered tough talk to the newspaper industry Tuesday, telling a publishing conference why her company is moving ad dollars to other media such as TV, magazines and the Internet.
Anne MacDonald, a self-proclaimed newspaper "junkie" who keeps stacks of them around her home and reads several each day, told publishers they need to do more to win back business from Macy's, which is part of Federated Department Stores Inc.

With Macy's now a national brand following Federated's acquisition of May Department Stores, the chain is turning increasingly to media with a national reach such as fashion magazines, television and Web sites, she said.

Newspapers are still effective at delivering local messages, she said, but need to do more to engage Macy's shoppers -- primarily women aged 18-54.

"In order for your newspapers to be winning our advertising dollars, you need to be winning in the marketplace, and that's not currently the case," MacDonald said in a keynote talk at the conference held by the Newspaper Association of America.

Analysts and investors have long been concerned about the decline in ad spending by department stores, and in particular Macy's, as they become national brands and less likely to use local media such as newspapers. Also, newspapers have been struggling with declining circulation and ad dollars as more people get their news online.

Among MacDonald's several suggestions for change was for newspapers to collaborate more effectively across regions and with each other in selling advertising, which would allow national companies such as Macy's to reach a broader audience.

As it is, individual ad buyers for Macy's stores deal with individual newspapers on advertising plans. "That's not productive for either of us," MacDonald said.

She pointed to her own industry, department stores, which had to undergo significant changes over the past several years to adapt to competition from online stores, television shopping channels, big box retailers and discounting clubs.

Macy's, she said, is seeking to establish itself as a more upscale, fashionable brand and drive foot traffic even when there aren't promotions, and is still trying to understand how customers are changing the ways they shop. "Like us, you must change the way you think," she said.

MacDonald pointed to the example of her two favorite sections of her hometown newspaper, The New York Times. Every week she pulls out the science and dining sections and reads them first.

If the Times were to somehow deliver those sections to her wrapped on the outside, she would be impressed that the publisher had learned something about her reading habits, she said.

She also issued a plea to publishers to collaborate with advertisers on research to better understand the rapidly evolving habits of their customers. The idea was immediately embraced by Jack Sweeney, publisher of the Houston Chronicle, who asked MacDonald how to find out what questions they needed answered.

Mark Contreras, senior vice president for newspapers at E.W. Scripps Co., called MacDonald's remarks a "very thoughtful call to action for newspapers to pay very close attention to. ... We have the wherewithal to meet many of their needs."

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