The impact of intermedia and newspaper competition on advertising linage in daily newspapers

Journalism and Mass Communication Quaterly

Volumn 76, Issue 4, 1999, Pages 729-744

  Shaver, Mary Alice ^a   Lacy, Stephen ^a  

^a NONE

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EID: 0033473572     PISSN: 10776990     EISSN: None     Source Type: Journal    
DOI: 10.1177/107769909907600409     Document Type: Article

References (69)

1. Lacy uses the term "fuzzy market structure" to describe newspapers' increasingly complicated markets. See Stephen Lacy, "Understanding and Serving Readers: The Problem of Fuzzy Market Structure," Newspaper Research Journal 14 (spring 1993): 55-67.
2. Jean Folkerts, Stephen Lacy, and Lucinda Davenport, The Media in Your Life (Boston: Allyn and Bacon, 1998), 209.
3. Edwin Emery, The Press and America, 3d. ed. (Englewood Cliffs, NJ: 1972), 600.
4. "By the Numbers," Broadcasting & Cable, 15 June 1998, 69.
5. Facts About Newspapers '88 (Washington, DC: American Newspaper Publishers Association, 1987), 8; and Facts About Newspapers 1997 (Washington, DC: Newspaper Association of America, 1997), 10.
6. Facts About Newspapers '88 (Washington, DC: American Newspaper Publishers Association, 1987), 8; and Facts About Newspapers 1997 (Washington, DC: Newspaper Association of America, 1997), 10.
7. Walt Potter, "Blooming Business: Newspaper Clusters Increasingly Sow Nondailies into the Mix," presstime, February 1998, 24-26.
8. Robert G. Picard, Media Economics: Concepts and Issues (Newbury Park, CA: Sage, 1989), 47-48; and Stephen Lacy and Todd F. Simon, The Economics and Regulation of United States Newspapers (Norwood, NJ: Ablex, 1993), 30-32.
9. Robert G. Picard, Media Economics: Concepts and Issues (Newbury Park, CA: Sage, 1989), 47-48; and Stephen Lacy and Todd F. Simon, The Economics and Regulation of United States Newspapers (Norwood, NJ: Ablex, 1993), 30-32.
10. John Morton, "Chains Swallowing Other Chains," American Journalism Review, July/August 1997, 52; and "One for the Record Books: Daily newspaper acquisitions reached new heights in 1997," presstime, February 1998, 28.
11. John Morton, "Chains Swallowing Other Chains," American Journalism Review, July/August 1997, 52; and "One for the Record Books: Daily newspaper acquisitions reached new heights in 1997," presstime, February 1998, 28.
12. Walt Potter, "Barter Basics: Swaps, Rather than Sales, Add Spice to the Newspaper Market," presstime, November 1997, 44-46; and Walt Potter, "Blooming Business: Newspaper Clusters Increasingly Sow Nondailies into the Mix," presstime, February 1998, 24-26.
13. Walt Potter, "Barter Basics: Swaps, Rather than Sales, Add Spice to the Newspaper Market," presstime, November 1997, 44-46; and Walt Potter, "Blooming Business: Newspaper Clusters Increasingly Sow Nondailies into the Mix," presstime, February 1998, 24-26.
14. Stephen Lacy and Todd F. Simon, "Intercounty Group Ownership of Daily Newspapers and the Decline of Competition for Readers," Journalism & Mass Communication Quarterly 74 (winter 1997): 814-25; and Stephen Lacy and Shikha Dalmia, "Daily and Weekly Penetration in Non-Metropolitan Areas of Michigan," Newspaper Research Journal 14 (summer-fall 1993): 22-33.
15. Stephen Lacy and Todd F. Simon, "Intercounty Group Ownership of Daily Newspapers and the Decline of Competition for Readers," Journalism & Mass Communication Quarterly 74 (winter 1997): 814-25; and Stephen Lacy and Shikha Dalmia, "Daily and Weekly Penetration in Non-Metropolitan Areas of Michigan," Newspaper Research Journal 14 (summer-fall 1993): 22-33.
16. Research indicates that as the percentage of a corporation's newspaper in counties with other dailies increases, the newsroom budgets increase. Thus, if clustering reduces this percentage, the newsroom budgets could shrink. See Stephen Lacy, Mary Alice Shaver, and Charles St. Cyr, "The Effects of Public Ownership and Newspaper Competition on the Financial Performance of Newspaper Corporations: A Replication and Extension," Journalism & Mass Communication Quarterly 73 (summer 1996): 332-41.
17. Increasing penetration of other dailies in a county has been found to be correlated with increased newshole size and increased local coverage; see Stephen Lacy, "The Impact of Intercity Competition on Daily Newspaper Content," Journalism Quarterly 65 (summer 1988): 399-406. Increasing penetration in the county has also been correlated with increased balance in stories and with an increase in percentages of conflict stories that had two or more sides of the controversy reported. See Stephen Lacy, Frederick Fico, and Todd Simon, "The Relationship Among Economic, Newsroom and Content Variables: A Path Model," Journal of Media Economics 2 (fall 1989): 51-66.
18. Increasing penetration of other dailies in a county has been found to be correlated with increased newshole size and increased local coverage; see Stephen Lacy, "The Impact of Intercity Competition on Daily Newspaper Content," Journalism Quarterly 65 (summer 1988): 399-406. Increasing penetration in the county has also been correlated with increased balance in stories and with an increase in percentages of conflict stories that had two or more sides of the controversy reported. See Stephen Lacy, Frederick Fico, and Todd Simon, "The Relationship Among Economic, Newsroom and Content Variables: A Path Model," Journal of Media Economics 2 (fall 1989): 51-66.
19. The exception occurred in northwest Arkansas when the Justice Department joined an antitrust suit filed by a competitor when NATL.C. and Donrey Media tried to buy a daily in an adjoining county, Community Publishing, Inc. v. Donrey Corp.; 892 F.Supp. 1146 (W.D. Ark. 1995), notice of appeal filed, No. 95-2976 and No. 95-3165 (8th Cir. 1995).
20. Potter, "Blooming Business," 26.
21. Paul A. Samuelson and William D. Nordhaus, Economics, 12th ed. (New York: McGraw-Hill, 1985), 411.
22. Picard, Media Economics, 47-48.
23. Lacy and Simon, Economics and Regulation , 30-32.
24. Edward H. Chamberlin, The Theory of Monopolistic Competition, 8th ed. (Cambridge, MA: Harvard University Press, 1962).
25. Lacy and Simon, Economics and Regulation, 46-48. The differences among media extend beyond just the nature of the medium. For example, production costs and who has to pay them can vary among media. In addition, newspapers receive support from subscriptions as well as advertising, while broadcast outlets do not.
26. Picard, Media Economics, 24.
27. John C. Busterna, "Concentration and the Industrial Organization Model," in Press Concentration and Monopoly, ed. Robert G. Picard et al. (Norwood, NJ: Ablex, 1988), 41.
28. See, for example, John Dimmick and Eric Rothenbuhler, "Quantifying Competition among Media Industries," Journal of Communication 34 (1975): 103-119; and John Dimmick, "The Theory of the Niche and Spending on Mass Media: The Case of the 'Video Revolution,'" Journal of Media Economics 10 (1997): 33-43.
29. See, for example, John Dimmick and Eric Rothenbuhler, "Quantifying Competition among Media Industries," Journal of Communication 34 (1975): 103-119; and John Dimmick, "The Theory of the Niche and Spending on Mass Media: The Case of the 'Video Revolution,'" Journal of Media Economics 10 (1997): 33-43.
30. Picard, Media Economics, and Lacy and Simon, Economics and Regulation.
31. Picard, Media Economics, and Lacy and Simon, Economics and Regulation.
32. Lacy and Simon, Economics and Regulation, 108-109, 121-22.
33. Stephen Lacy and Jan P. Vermeer, "Theoretical and Practical Considerations in Operationalizing Newspaper and Television News Competition," Journal of Media Economics 8 (1995): 49-61.
34. William B. Blankenburg, "Determinants of Pricing of Advertising in Weeklies," Journalism Quarterly 57 (winter 1980): 663-66.
35. Stephen Lacy and Stephen Dravis, "Pricing of Advertising in Weeklies: A Replication," Journalism Quarterly 68 (autumn 1991): 338-44.
36. Martha N. Matthews, "JOAs and Advertising Rates: A Comparison with Monopoly Markets" (paper presented at the annual meeting of AEJMC, Minneapolis, August 1990).
37. Lacy and Simon, Economics and Regulation, 121.
38. James M. Ferguson, "Daily Newspaper Advertising Rates, Local Media Cross-ownership, Newspaper Chains, and Media Competition," Journal of Law and Economics 24 (1983): 635-54.
39. John C. Busterna, "The Cross-elasticity of Demand for National Newspaper Advertising," Journalism Quarterly 64 (summer-autumn 1987): 346-51.
40. Ken Smith, "Intermedia Competition for Advertising in Small Daily Markets," The Journal of Media Economics 8 (1995): 29-45.
41. Mary Alice Sentman (Shaver), "When the Newspaper Closes: A Case Study of What Advertisers Do," Journalism Quarterly 63 (winter 1986): 757-62
42. C. Otnes and R. Faber, "An Examination of Variables Influencing Local Advertiser Media Selection," in Proceedings of the 1989 Conference of the American Academy of Advertising, ed. K. Rotzoll (Urbana: University of Illinois Press, 1989), 57-62.
43. J. Frederick-Collins, "Measuring Media Image: Expectations, Perceptions, and Attitudes of Local Retail Advertisers" (paper presented at the annual meeting of AEJMC, Montreal, Canada, August 1992).
44. G. T. Cameron, G. J. Nowak, and D. M. Krugman, "The Competitive Position of Newspapers in the Local Retail Market," Newspaper Research Journal 14 (summer-fall 1993): 70-81.
45. Dan Shaver, "A Study of Rate Structures in Display Advertising," MBA Project, Wake Forest University, Winston-Salem, NC, 1993.
46. Ken Smith, "Advertisers' Media Selection in Small Newspaper Markets," Newspaper Research Journal 19 (winter 1998): 41.
47. Chamberlin, Theory of Monopolistic Competition.
48. Lacy and Dalmia, "Daily and Weekly Penetration."
49. The 50 newspapers in the original sample are: Albany, NY (Times Union); Albany, OR (Albany Democrat-Herald); Bangor, ME (Bangor Daily News); Bennington, VT (Bennington Banner); Bloomington, IN (Herald-Times); Buffalo, NY (The Buffalo News); Casa Grande, AZ (Casa Grande Dispatch); Champaign, IL (The News-Gazette): Conway, AR (Log Cabin Democrat); Detroit, MI (News/Free Press); Durham, NC (The Herald-Sun); Erie, PA (Erie Daily Times); Fort Lauderdale, FL (Sun-Sentinel); Fort Wayne, IN (Journal-Gazette); Frederick, MD (The Post & News); Grand Fork, ND (Grand Forks Herald); Grand Island, NE (The Grand Island Independent); Greenburg, PA (Tribune-Review); Greenwich, CT (Greenwich Time); Hutchinson, KS (The Hutchinson News); Jacksonville, FL (Florida Times-Union); Lincoln, NE (The Journal Star); Loganport, IN (Pharos-Tribune); Louisville, KY (The Courier-Journal); Manchester, NH (The Union-Leader); Middleton, NY (Timers-Herald-Record); Muncie, IN (The Muncie Star); Nashville, TN (The Tennessean); Northhampton, MA (Daily Hampshire Gazette); Olympia, WA (The Olympian); Pittsburgh, PA (Post-Gazette); Portland, ME (Press Herald); Providence, RI (The Journal-Bulletin); Reading, PA (Eagle/Times); Reno, NV (Gazette-Journal); Richmond, VA (Times-Dispatch); Riverside, CA (The Press-Enterprise); Sacramento, CA (The Bee); San Diego, CA (The Union-Tribune); San Francisco, CA (Chronicle/Examiner); Sitka, AK (The Daily Sentinel); Spokane, WA (The Spokesman-Review); Stamford, CT (The Advocate); Syracuse, NY (The Post-Standard); Tacoma, WA (The News Tribune); Toledo, OH (The Blade); Washington, PA (Observer-Reporter); Winston-Salem, NC (Journal); Yakima, WA (Herald-Republic).
50. Alan B. Albarran, Media Economics: Understanding Markets, Industries and Concepts (Ames, IA: Iowa University Press, 1996), 156.
51. The inclusion of insert and classified in total ad lines might be seen as problematic because television and radio do not have equivalent forms of advertising to a great degree. However, the total ad lines was used for three reasons. First, this will give an indication of competition's impact on total linage, which accounts for the majority of income at most dailies. Second, heavy users of business classifieds, such as real estate companies and automobile dealerships, do use broadcast advertising. Third, advertising need not be exact equivalents for substitution to occur. The goal of advertising is to get information to the desired group. Classified advertising in a newspaper with low penetration might not be as good a way of to reach the desied group as a television ad on a station with high market penetration.
52. Cost-per-thousand was used instead of nominal rate because cost-per-thousand has been found to be related to intermedia competition.
53. Editor & Publisher International Year Book 1995 (New York: Editor & Publisher, 1995).
54. Broadcasting & Cable Yearbook 1994 (New Providence, NJ: R. R. Bowker, 1994).
55. Circulation 95 (New York: Standard Rate & Data Service, 1995).
56. Lacy and Vermeer, "Theoretical and Practical."
57. The dates for these editions in 1994 were 19 March, 16 April, 21 May, 18 June, 16 July, 20 August, 17 September, 15 October, 19 November, and 17 December. In 1995, the dates were 21 January and 18 February.
58. The part correlation squared represents the unique shared variance between a dependent and independent variable when all other variables are controlled for.
59. Hierarchical multiple regression requires the researcher to establish the order that variables are input into the equation. Because the hypotheses deal with competition, it was decided to input the competition variables before the cost-per-thousand variable and the EBI. However, the issue of which competitive variables should be entered first remained. Two sets of regressions were run. The first input the broadcast variables (TV stations per 1,000 and radio stations per 1,000) in the equation before the newspaper variables (penetration of other dailies and penetration of weeklies in the county). The second reversed the order. The order of strength of relations was the same with both approaches. However, the degree of relationship did vary slightly. When the newspaper variables were entered first, the relationship of television and weekly penetration with all advertising lines increased and the relationship of daily newspaper penetration and radio decreased. Similarly, when newspapers were entered first, the relationship of television and weekly penetration with run-of-the-paper ads increased, while the relationship with radio declines and the relationship with daily newspaper penetration remained the same. Because entering the broadcast variables first resulted in the smallest relationship, this approach was considered to be the most conservative and was used for the analysis. The following shows the part correlation squared for both orders of hierarchical input for both dependent variables. The part correlation squared for all advertising linage are (The first correlation in the pairs is when the broadcast variables were entered first and the second is when newspaper variables were entered first.): television stations per 1,000 households = .087 and .145; radio stations per 1,000 households = .064 and .047; daily newspaper penetration = .214 and .157; weekly newspaper penetration = .003 and .019. The part correlations squared for run-of-the-paper ad linage are: television stations per 1,000 households = .224 and .240; radio stations per 1,000 households = .103; daily penetration = .052 and .052; weekly penetration = .001 and .035. The part correlations for cost-per-thousand and effective buying income are the same as in tables 2 and 3.
60. Once outliers were adjusted, the skewness for ROP linage equaled 1.09. Although the dependent variables had a positive skew, regression is robust for minor variation in assumptions of dependent variable normality. See B. G. Tabachnick and L. S. Fidell, Using Multivariate Statistics (New York: Harper & Row, 1983).
61. Tabachnick and Fidell, Using Multivariate Statistics, 92
62. As discussed above, the data did not have a large number of outliers that increased the range. The distribution was not normal but more horizontal, with many values and little grouping. This lack of normality is not a serious problem in exploratory studies when inference is not being made to a larger population. However, it does suggest the need for replication.
63. The part correlation squared for these two variables represent the variation after the other variables have been entered. A problem that arises when a variable such as effective buying income is entered first is that it appears to account for large amounts of variance in ad linage, which simply represents the strong connect between market size and total advertising dollars available.
64. The two tables report the non-adjusted R-square for two reasons: (1) This is not an inferential regression and there is no sampling error. The adjusted R-square is more useful evaluating the impact of small sample sizes when making inference. (2) The changes in R-square (part correlations) generated by hierarchical regression add up to the R-squared, not the adjusted R-squared. For consistency, the R-squared was used, with an understanding that low case-to-variable rations increase the level of R-squared. However, the low case-to-variable ratio is not as likely to alter relationships in this data set because no particular bias could be identified from the self selection.
65. Picard, Media Economics, 24.
66. Lacy and Simon, Economics and Regulation, 46-48.
67. Ferguson, "Daily Newspaper Advertising Rates."
68. Lacy and Simon, "Intercounty Group."
69. Robert Neuwirth, "Unbiased, execs urge: deal on," Editor & Publisher, 30 May 1998, 3.