What opportunities in the marketing environment did Gannett seize in launching USA Today? How did the company learn about and respond to these opportunities? Answer these same questions for USAToday.com.
What opportunities in the marketing environment did Gannett seize in launching USA Today?
Case 1 – USA Today
USA Today is the most successful and highly visible newspaper that students have seen and read on a national basis. The case provides an overview of Gannett Publishing’s strategic marketing approach to launching and growing this unique newspaper (Gannett split into two companies in 2014). When USA Today debuted in 1982, it achieved rapid success due to its innovative format. No other media source had considered a national newspaper written in shorter pieces than a traditional paper and sprinkled with eye-catching, colorful photos, graphs, and charts.
Designed to address the needs of a sound-byte generation, readers found USA Today’s content refreshing and more engaging than other papers. Circulation grew rapidly from roughly 350,000 in 1982 to approximately 4.1 million daily print and online readers today. This compares to approximately 2.3 million for second-place Wall Street Journal and 2.1 million for New York Times. USA Today’s website (www.usatoday.com) is one of the Internet’s top sites for news and information.
[Author’s note: Circulation numbers vary from quarter to quarter with USA Today and Wall Street Journal frequently swapping the #1 and #2 positions. Instructors are encouraged to find the most recent circulation numbers.]
The case reviews the history of product, promotion, and distribution innovation at USA Today.
Although the paper has been very successful, it had difficulty earning a reasonable profit early on. To reverse this trend, Gannett created several USA Today spin-offs including Baseball Weekly, SkyRadio, the international editions of USA Today, and USA Today Online. USA Today continues to grow by enhancing the value-added components of both its print and online versions. It has invested heavily in technology related to podcasting, news aggregation, and online advertising; and developed partnerships aimed at providing news content for handheld wireless devices.
Today, that history of innovation must continue if USA Today is to survive during a time when overall newspaper sales, advertising revenue, and readership are declining. The paper faces unprecedented competition from a variety of sources at a time when more and more Americans, especially younger people, are turning away from printed news. That shift has affected the company financially as well. USA Today and other newspapers have struggled with falling revenues and increased costs for several years. Both print and online advertising revenues have been falling steadily, declining 50 percent in the past 5 years. Although advertising revenues had been falling before the recession, 2008 and 2009 saw steep declines triggered by a soft ad market, particularly in the automotive, retail, and employment sectors.
The multitude of choices for both consumers and advertisers means that USA Today will have to work harder at innovation, finding a way to differentiate its products from the sea of competition. This will be a challenging task given the continuing decline in newspaper readership and the growing consumer demand for free online news.
Overarching Strategic Question/Problem (to be answered through the completion of the entire case)
Although increasing digital options for news and information have some industry observers bemoaning the death of newspapers, some feel that newspapers do have a bright future and will thrive if they develop a healthy online presence and adapt to evolving media consumption patterns. The future of USA Today depends on its ability to continually push the envelope of innovation and marketing strategy. USA Today must continue to use a value-added strategy. This can further enhance distribution of its proprietary content and ensure continued differentiation with respect to the competition.
Sub Questions (To be answered in Section VI of the written case analysis)
1. What opportunities in the marketing environment did Gannett seize in launching USA Today? How did the company learn about and respond to these opportunities? Answer these same questions for USAToday.com.
2. How has a continuous strategy of marketing innovation proved successful for USA Today and USAToday.com? Moreover, do you believe that USA Today is well positioned for the future? Explain.
3. What are the SWOT implications for USA Today as it looks toward its future? Further, what strengths and opportunities can USA Today leverage as it looks for a competitive advantage in the distribution of news and information?
4. Based on USA Today’s experiences with print and online news, evaluate the long-term potential of printed news and the newspaper publishing industry. Do you believe printed newspapers will continue to survive despite digital competition?
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