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Betting big: WSJ's
Weekend Edition

A major venture launching amid major doubts

By Dan Weil

   The Wall Street Journal Weekend Edition, which debuts tomorrow, sounds like a great idea when you first think about it. But the more media people think about it, the more doubts they have about the new Saturday paper. 
   Dow Jones has a lot of selling to do to convince them it’s a brilliant idea, and so far the company hasn’t done it.
   “It’s a solution in search of a market,” observes Michael Neiss, senior vice president and managing director of Universal McCann. “It’s a good product, but if I had to invent a new media form, it wouldn’t be the Saturday Wall Street Journal. It’s like going to a pool party in a pinstriped suit. As relaxed as they think they will make it, it’s still pretty uptight.”
   Executives at The Journal are looking to the new edition as a means to increase the paper's share of consumer ad dollars as it faces further declines in its traditional base of business and financial advertisers. 
   They also see it as an opportunity to put Friday's news in readers' hands the very next day, rather than on Monday, which is when readers traditionally saw Friday's headlines.

   “There are two things going on,” Journal managing editor Paul Steiger tells Media Life.
   “Principally, readers asked for it. In addition, the business side of the paper liked it because it increases the penetration of the business-to-consumer market and thus increases the advertising base.”
   Circulation of the Saturday paper will match the 1.75 million copies of weekdays, Steiger says. Weekday subscribers will receive the extra edition for free, and it will be available at newsstands for $1.50.
   The new Saturday edition will arrive in three sections, with the first devoted to hard news. The second one, Money & Investing, will focus on personal finance and financial markets. The third section, Pursuits, will have a softer focus. That’s where you’ll find stories about everything from sports and travel to fashion and food.
   The Journal seeks to build on the success of its Weekend Journal section on Fridays, which began in 1998, and its Personal Journal section, which runs Tuesday through Thursday and started in 2002.
   But media buyers have questions about distribution and the wisdom of entering an already crowded weekend marketplace. The Journal itself is heavy with lifestyle content in its Friday edition, which includes the Weekend Journal. And the Weekend Edition will have to fight for readers with The New York Times, Parade, USA Weekend and Life, not to mention the Saturday and Sunday editions of local newspapers around the country. 
   It's likely to face a similar struggle competing for ad dollars. The Journal’s ad slump began with the dot.com bust in 2000. Ad linage has dropped in each of the past four years, and in the second quarter of this year it was off 6.3 percent from the year-earlier period. Much of that hurt has come from the paper's heavy reliance on technology and financial service ads. The Journal’s financial ads plummeted 24 percent in the first quarter from a year ago, and its technology ads slipped 23 percent.
   Advertisers’ response to the Saturday paper has been strong so far, Steiger says. 
   “I learned today [Thursday] that 120 advertisers have signed up for the Weekend Edition, up from 90 last week,” he says. “The ad sales team is seeing an increasing connection to the business-to-consumer market, because now they are able to market during the weekend, which is often a better time to hawk their wares.”
   And he doesn’t see the bevy of weekend competitors constraining the Saturday paper’s advertising opportunities. “We’re the exciting new kids on the block, so this gives us an opportunity,” he says.
    The Journal’s affluent readership demographics and the importance of the weekend for shopping should bring some consumer ads to the Weekend Edition.
   “They will succeed in bringing in luxury goods, maybe some high-end packaged goods and high-end, women-oriented retail goods, thanks to the higher percentage of women reading on weekends,” says Universal McCann's Neiss.
    The question is whether there will be enough new advertising dollars to offset the $12.5 million in operating losses the company will incur with the new edition's rollout, not to mention the added costs of the Weekend Edition in coming years.
   While The Journal as a national paper won’t provide the ad opportunities for department stores that local papers do, with so many department stores owned by national chains, they are likely to place some ads in Weekend Edition. Real estate companies may be attracted to the Saturday paper as well, though the local nature of the real estate business could limit ad potential in that sector.
   But there's also the risk that the new edition will cannibalize ads from the weekday papers, tempting advertisers to spread existing ad dollars over the six days rather than increasing budgets to add a sixth day.
   “Will the consumer advertisers they have now just want to do the same spending over six days?” wonders John Morton, a longtime newspaper analyst in Silver Spring, Md.
   To be sure, the Saturday edition does plug a news hole for The Journal. “Until now World War III could break out on a Friday, and you wouldn’t find out about it in The Wall Street Journal until Monday,” Morton notes. 
   But the paper has several distribution issues to overcome. First, Dow Jones must make sure that readers who get the paper at their office on weekdays remember to inform the company of their home address.
   “My big fear is that subscribers won’t respond to Dow Jones’ many requests for their Saturday addresses and the Saturday Journal will go to addresses where they aren’t,” says Jack Hanrahan, director of print operations for OMD USA.
   The Journal so far has received sending instructions from 90 percent of subscribers, Steiger says, and he expects most of the rest to reply shortly after the first Saturday paper is published.
   Another problem The Journal may face is that its hyper-busy subscriber base doesn’t have time to read another periodical over the weekend. 
   “Will there be enough time carved out of a busy Saturday to spend time with this thing?” wonders Neiss. “The spirit is willing, but the flesh may be weak."
   And wealthy consumers have plenty of other options to plan their weekend entertainment and spending activities apart from Weekend Edition.
   “It’s not essential reading,” Neiss says. His advice to advertisers considering the Saturday paper: “I wouldn’t recommend being the first one in.”

Sept. 16, 2005 © 2005 Media Life

- Dan Weil is a Florida writer.

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