CHANGE SIZE

SAGE Advice: Selling Newspaper Ad Space in a Shifting Petroleum Paradigm  

By Leo J. Shapiro, Erik Shapiro, and Steve Yahn

Original Publisher: Editor & Publisher Date: September 29 2006

Falling gasoline prices do not signal a return to joy-riding around in modified military mega-jalopies.

Our Leo J. Shapiro & Associates polls of U.S. consumers indicate that people have learned how to get by -- and get groceries and get to work and get their kids to school -- while driving less.

Last July, with gas prices hovering at three dollars per gallon, our national poll found that 66 percent of drivers reported cutting back on driving to save gas. Even though prices in September have fallen off nearly half a dollar, 60 percent of drivers are still reporting cutting back on driving to save gas.

As Leo J. Shapiro & Associates Chairman George Rosenbaum notes "It appears that the cutbacks in driving are holding even as the price of gas goes down"

High gas prices caused a shift to smaller vehicles.

An article posted on September 11 on Forbes.com reveals that, comparing 2005 sales through August and 2006 sales through August of the ten top selling vehicles, five are up (all sedans) and five are down (three of them large pick-ups).

And even though gas prices have now fallen, car buyers still demand smaller vehicles.

A recent article in the New York Times ["Decline in Gas Prices Isn't Buoying Detroit," 9-23-06] reports that the period of high gas prices forced a secular change in auto buying habits. Ford Motor Company's chief sales analyst George Pipas,only hopes that gasoline prices stay low enough for long enough to afford light truck sales a soft landing: "There's a new reality."

Biological and cultural evolution is often irreversible and occurs by quantum leaps in the presence of crash-flush cycles. An enormous meteor cloaked the earth in dust [crash!] and wiped out the dinosaurs. By the time the dust settled and earthly bounty resumed [flush!], a little creature they want to call a mouse had emerged as king of the jungle.

THE BOTTOM LINE

What does this mean for newspaper ad sellers?

Falling gas prices combine with reduced driving and driving smaller cars to result in more money available to spend on other things. This opens up wide opportunities for selling newspaper ads to the businesses that sell those things.

Moreover, newspaper ads can help consumers do their comparison shopping from home instead of driving from store to store. Strategic clustering of ads can help consumers plan more efficient shopping trips.

Newspapers ad sales can benefit if the ad sellers learn to ride this new "drive smaller and less" paradigm into the sunrise.

To be kept informed about further findings from ongoing research on this topic, contact 8SAGES.com.