Newspapers need to prioritize digital advertising sales if they expect to thrive, according to a Pew Research Center study released Monday.
As advertisers shift spending from traditional print media to the Internet, newspapers are failing to make up for the decline in print advertising revenue with gains in online ads. Pew studied 38 large and small newspapers and found that for every $7 in print ad revenue declines, the companies only generated about $1 in new digital advertising sales.
The study suggests, however, that newspapers have the power to change _if they alter their approach to advertising sales. Papers with the largest circulations and biggest sales forces do a better job increasing online ad sales. But even newspapers with a daily circulation of less than 25,000 printed copies show hefty digital gains with a properly aligned sales force, training and commissions that encourage online ad sales.
“The notion that you can only have success in digital if you’re bigger is not what we found,” said Tom Rosenstiel, director of the Pew’s Project for Excellence in Journalism. “You can have success even at small papers if you’re willing to change the culture.”
The newspapers provided Pew with financial data for its study, on the condition that they would not be identified. One newspaper, with a circulation of about 20,000 copies and over $8 million in annual print revenue, managed to boost its annual online ad revenue by 63 percent to more than $500,000 in 2010 payday advance lenders. In 2011, its digital ad revenue grew about 33 percent.
The newspaper’s publisher told Pew researchers that the company had aggressively sought to hire ad salespeople who focused on online ads _ mainly display and classified ads. Now, “almost everything we sell has a digital component,” the publisher told the center.
For all the newspapers that participated, print ad revenue fell 9 percent while digital ad revenue grew 19 percent. Since print ads still account for about 92 percent of ad revenue, the small decline in print has had a much bigger impact on than the digital gains.
The huge chunk of revenue that still comes from print ads can also skew the behavior of salespeople, many of whom work on commission.
Many newspapers are attempting to transform. Pew found that three quarters of the newspapers it studied had changed their commission structure to encourage more digital ad sales. One newspaper now pays a 20 percent commission on digital ads but just 8 percent on print ads.
Japan
Greece’s Parliament late on Tuesday approved new cuts in public sector pensions and government spending required to secure a second package of international rescue loans.
Lawmakers voted 202-80 in favor of cutbacks worth a total euro3.2 billion ($4.31 billion) and aimed at bringing the 2012 budget back in line with targets. Lawmakers from both parties in Prime Minister Lucas Papademos’ coalition, the majority Socialists and the conservatives, backed the legislation.
Earlier, the debt-crippled country’s Cabinet decided to apply recent labor reforms, including deep cuts to the minimum wage, retroactively to Feb. 14.
Greece is obliged to adopt a series of austerity measures and reforms before it can receive any funds from its new euro130 billion ($174 billion) package of rescue loans from other eurozone countries and the International Monetary Fund.
The bailout, and accompanying bond swap deal with private creditors, are meant to save the country from a potentially catastrophic default in late March that could drag down other financially vulnerable countries and threaten the European Union’s joint currency, the euro.
The rescue package is Greece’s second in less than two years. The country has been surviving since May 2010 on funds from a first bailout from the eurozone and IMF, and has received euro73 billion ($98 billion) from the initially approved euro110 billion ($147 billion) package.
But more than two years of harsh austerity implemented to secure the rescue funds have taken a hefty toll on the recession-bound Greek economy, with businesses closing in the tens of thousands and unemployment at a record high 21 percent.
“It is dramatic to cut someone’s pensions. … But why do we have to take these measures? Because our budget is still running at a loss,” Finance Minister Evangelos Venizelos said in Parliament. “We are still adding debt to our debt. And if we do not start to generate a primary surplus next year, that will be catastrophic.”
The newly approved legislation imposes nearly euro400 million ($538 million) in cuts to already depleted pensions.
Health and education spending will be reduced by more than euro170 million ($229 million), subsidies to the state health care system will be cut by euro500 million ($673 million), and health care spending on medicine will fall by euro570 million ($767 million).
Furthermore, some euro400 million ($538 million) will be lopped off defense spending _ three quarters of which will come from purchases.
The law also revises the 2012 budget, changing the government deficit target to 6.7 percent of gross domestic product from an initial forecast of 5.4 percent.
Measures approved by Papademos’ Cabinet earlier Tuesday include a 22 percent cut in the minimum salary, currently at euro751 ($1,010) per month, for private sector workers, and a 32 percent cut for workers under the age of 25, where the rate of unemployment is nearly 50 percent.
Limits also are being imposed on collective wage agreements and the process of labor arbitration, with some measures to remain in effect until overall unemployment falls below 10 percent.
Lawmakers are to vote again on Wednesday on another bill implementing cuts that have previously been announced.
The new wave of austerity measures have sparked widespread anger among a public that has seen its income and living standards drop with no clear end to the crisis in sight.
On Tuesday, about 100 uniformed police, coast guard and fire service unionists protested pay cuts outside Parliament, with a small group burning a wartime military German flag used in the Nazi era in 1935-1945. While Germany is a major contributor to both Greek bailouts, Berlin’s insistence on an austerity-based cure for the country’s financial woes has angered many Greeks.
Papademos, a technocrat heading Greece’s temporary coalition government, is to head to Brussels for a meeting Wednesday with European Commission chief Jose Manuel Barroso.
Greece’s European partners have been pressing the country to implement the measures it has already passed, after repeated delays and missed targets over the last two years eroded trust in the ability of Greece’s politicians to stick to their pledges.
European Parliament President Martin Schulz was in Athens on Tuesday for a series of meetings, and he gave a speech in Parliament stressing that “Greece must remain in the euro.”
“We must do everything we can to prevent the collapse of the euro,” he said, adding that more emphasis must be put on measures to promote growth rather than only on cutbacks.
“A policy based solely on austerity spells economic disaster,” he told Greek deputies.
“Budgetary prudence is certainly essential (but) … there is too much focus on financial penalties and austerity packages,” Schulz said, adding that economic growth could be stifled in many European countries.
“How are countries whose economies are at a standstill, which are facing a recession, supposed to pay off their debts? Greece has already paid a high price. It cannot go on paying,” he said.
On Monday, the Standard & Poor’s ratings agency downgraded Greece’s credit rating to “selective default” over a debt writedown deal with private creditors that is an integral part of the second bailout.
The downgrade had been widely expected, as ratings agencies had said the bond swap with private creditors, which seeks to cut euro107 billion ($144 billion) off Greece’s debt, would constitute a selective default. Once the swap is carried out next month, the agencies are expected to upgrade Greece.
Late Tuesday, the International Swaps and Derivatives Association said it has accepted for consideration a question relating to a potential credit event with respect to Greece. An ISDA statement said a meeting will be held at 1100GMT on Thursday to determine whether a credit event has occurred.
The decision by the New York-based trade association, which represents hundreds of banks and other companies, will ultimately determine whether the bond swap will trigger payment of insurance taken by investors against a Greek default.
____
Derek Gatopoulos and AP Television in Athens contributed.
Gasoline prices have never been higher this time of the year.
At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April.
“You’re going to see a lot more staycations this year,” says Michael Lynch, president of Strategic Energy & Economic Research. “When the price gets anywhere near $4, you really see people react.”
Already, W. Howard Coudle, a retired machinist from Crestwood, Mo., has seen his monthly gasoline bill rise to $80 from about $60 in December. The closest service station is selling regular for $3.39 per gallon, the highest he’s ever seen.
“I guess we’re going to have to drive less, consolidate all our errands into one trip,” Coudle says. “It’s just oppressive.”
The surge in gas prices follows an increase in the price of oil.
Oil around the world is priced differently. Brent crude from the North Sea is a proxy for the foreign oil that’s imported by U.S. refineries and turned into gasoline and other fuels. Its price has risen 11 percent so far this year, to around $119 a barrel, because of tensions with Iran, a cold snap in Europe and rising demand from developing nations. West Texas Intermediate, used to price oil produced in the U.S., is up 4 percent to around $103 a barrel. That’s 19 percent higher than a year earlier.
Higher gas prices could hurt consumer spending and curtail the recent improvement in the U.S. economy.
A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion. That’s only 0.2 percent of the total U.S. economy, but economists say it’s a meaningful amount, especially at a time when growth is only so-so. The economy grew 2.8 percent in the fourth quarter, a rate considered modest following a recession.
Gas prices are already an issue in the presidential campaign. Republican candidate Newt Gingrich spoke several times this week about opening up more federal land to oil and gas drilling as a path toward U.S. energy independence _ and lower pump prices.
“Our goals should be to get gasoline to $2.50 or less so that working families can actually get to work and retired families can travel,” Gingrich said at a campaign event in Los Angeles Thursday.
High oil and gas prices now set the stage for even sharper increases at the pump because gas typically rises in March and April.
Every spring, refiners suspend operations to switch the type of gasoline they make. Supplies of wintertime gas are sold off before March, when refineries need to start making a new formula of gasoline that’s required in the summer.
That can mean less supply for service stations, resulting in higher gas prices. And summertime gasoline is more expensive to make. The government mandates that it contain less butane and other cheap organic compounds because they contribute to the formation of ground-level ozone, a primary constituent in smog. That means more oil, a costlier component, is needed to produce each gallon.
The Oil Price Information Service predicts that gasoline could peak at $4 online payday loan lenders.25 a gallon by the end of April. That would top the record of $4.11 in July 2008.
The national average for gasoline began the year at $3.28 a gallon. The average price for February so far is $3.49 a gallon. That’s up from $3.17 a gallon last February, a record at the time. Back in 2007, before the recession hit, the average for February was $2.25 a gallon.
Prices are higher on the East and West Coasts, where gasoline has risen above $3.70 in Connecticut, New York, Washington D.C. and California. This isn’t unusual _ states on the coasts charge some of the nation’s highest gas taxes.
High gas prices put a strain on many people’s budgets.
Americans spent 8.4 percent of their household income on gasoline last year when gas averaged an all-time high of $3.51 a gallon. That’s double the percentage a decade ago. They could pay even more this year, even though demand is the lowest in 11 years as people drive fewer miles in more efficient cars, says Tom Kloza, chief oil analyst at OPIS.
Gary Goodman commutes into Manhattan from Edgewater, N.J., because gas, tolls and parking make the cost of driving prohibitive.
Goodman, an accountant, commutes by bus. He uses his car mostly for trips to the grocery store or for occasional nights out. He says he has no choice but to eat the higher gas costs.
“I already drive as little as possible,” he says.
Paul Dales, a senior economist at Capital Economics says it would take a bigger shift in the global economy _ say, a deep recession in Europe or a slowdown in Asia’s manufacturing _ for pump prices to drop noticeably. Either event would slow oil demand, depressing prices.
But experts expect demand to keep rising. World oil demand is expected to increase by another 1.5 percent to 89.25 million barrels a day in 2012, according to the Energy Information Administration.
In the short term, tensions with Iran are feeding fears that oil supplies could be blocked.
The U.S. and Europe are tightening economic sanctions against Iran over what the West believes is Iran’s attempt to build a nuclear bomb. World leaders fear Israel may be planning a strike against Iran, the world’s third largest oil exporter.
In response, Iran has threatened to withhold its own oil deliveries and to block the Strait of Hormuz, a waterway along its coastline through which one-fifth of the world’s oil flows.
On Friday, an international banking clearinghouse crucial to Iran’s oil sales said it is prepared to discontinue services to Iranian financial institutions being targeted by the EU and U.S. sanctions. That could ratchet up the pressure on Iran, but also send oil prices soaring.
The price of Brent crude fell 53 cents on Friday to $119.58. WTI gained 93 cents to $103.24.
___
Reporter Beth Fouhy in Atlanta contributed to this report.
For anyone who loves a good steak, a juicy burger or a nice Sunday roast, these are anxious times.
Prices for beef, which have been climbing for months, hit a record high in December - an average of $5 a pound — and analysts predict they could climb 5 to 8 percent higher this year.
“Prices have gone up quite a bit. That usually happens around the holidays, but we expect them to come down,” said Pam Neal, owner of Al’s Steakhouse, north of Laclede’s Landing. “Not this time. They’re going to be jumping even higher. It’s hard to handle.”
Beef prices are soaring for a number of reasons. Producers, who struggled with high feed costs and diminishing profits, began shrinking their herds roughly five years ago. Since then demand from overseas markets has shot up - roughly 11 percent of American beef went overseas last year, another record — claiming more American beef.
In July of last year, the US beef herd had dropped to its lowest point since1958. Also last year, a drought in Texas and Oklahoma, the top two cattle-producing states, forced producers to cull herds. That means that the 2012 cattle numbers, due out this week, will be even lower. Some estimates predict the country’s cattle herd could shrink by 600,000 head this year. Last year’s cow inventory was 30.9 million, while the total number of cattle was 92.6 million.
“There’s not enough beef out there,” said Ron Plain, an agricultural economist with the University of Missouri. “This year, there’s going to be less beef, more people, the supply is going to be tighter, and that means more records.”
Compounding matters for beef lovers are soaring feed, fuel and production costs, which are forcing price increases all along the production chain.
“Look at our fertilizer costs, our grain costs. Any piece of machinery we buy has just gone up,” said Tom Sachs, who raises cattle in St. Charles County. “Our input costs are just really high..”
For Missouri’s $3 to $4-billion cattle industry, which currently raises the third-highest number of calves in the nation, and for the nation’s cattle industry in general, the numbers come as good news. Prices, per pound for a steer, were $1.75 on Tuesday, compared to about 95 cents 5 years ago. For the average 1,300-pound steer, that adds up.
“Times are good,” said Mike Miller, of Cattlefax, a Colorado-based cattle industry research firm. “Our expectation is it’s going to be good for some time.”
But the good times for the industry have not come without effort.
Since 1980, according to the U.S. Department of Agriculture, per capita beef consumption has plummeted 25 percent. In 2011, the average American consumed 57.6 pounds of beef, down 13 percent from a decade prior. This year the number is predicted to decline again to 54.1 pounds.
The reasons for the decline are difficult to isolate. But they include health concerns over the higher fat content in red meat, worries about humane treatment and links to environmental problems, including greenhouse gasses, all of which have gotten a lot of attention in recent years. Some people point to public health campaigns, such as “Meatless Mondays,” for the shrinking numbers.
The industry insists the American appetite for beef is still strong, while some analysts and researchers suggest the decline, at least in recent years, is simply due to the recession.
“These non-economic factors are really tough to talk about,” said Scott Brown, a livestock economist with the Food and Agricultural Policy Research Center at the University of Missouri. “Frankly, when the consumer goes to the store or restaurant, it’s the relative price that’s driving their decision.”
Whatever the reason for the decline, the country’s cattle producers have helped compensated for it by making inroads into overseas markets, particularly in Asia.
“Worldwide consumption of meat and demand has increased,” said Jeff Windett, who heads the Missouri Cattlemen’s Association. “I think it’s just good business sense to expand market opportunities for producers.”
Overseas markets also embrace pieces of the animal that American’s typically don’t consume, bringing more dollars to American beef producers.
“Tripe, ox tail, tongue — some of those kinds of meat sell for a lot of money,” Windett explained. “It’s really creating a market for some of those variety meats and adding value to the carcass overall.”
Japan, a major beef importer, restricted US beef in 2003 after an outbreak of Mad Cow disease, but has since eased the barriers. With Japan a major trade destination again, American beef exports are poised to hit another record this year - nearly $5 billion. China, which does not officially import US beef, could be on the horizon.
“It spells a very bright spot for the US beef industry,” Brown said. “There are just a lot of things on the trade front that look to be very positive.”.
That will, inevitably, put more pressure on prices in American supermarkets, at least in the short term. Because cattle herds take years to rebuild and require huge amounts of capital, it could be some time before the American cattle inventory can help even out costs to consumers.
In the meantime, retailers, restaurants, butchers and shoppers are all getting creative.
Recently, for example, Dierbergs gave away free potatoes, onions and carrots to customers who bought ground beef.
“Customers are almost by default moving toward value cuts,” said Michael Cornelius, the chain’s meat director. “We’re trying to make sure there are items out there that address the value-consciousness of the customers.”
At Kenrick’s Meat and Catering, in south city, the meat counter has seen more customers looking for sales.
“People are eating more pork, but overall they’re just being more economical,” said manager Steven Weinmann. “They’re buying on sale. When everything was cheaper, people just bought by taste.”
At Kreis Steakhouse, on TK, owner George Tompras has been keeping an eye out for good values, too, but says he’s just managing to cover his costs.
“When tenderloins started going up in November, I bought 50 cases at $8 a pound,” he said. “Now it’s 11. That’s the kind of thing you have to do.”
Al’s, which just celebrated it’s 87th year in business, recently made a change to a long-standing tradition. Responding to customers’ concerns, the restaurant decided that instead of just displaying the beef cuts to diners on a tray, it would offer paper menus, with prices.
“We wanted to keep the elegance, the tradition,” Neal explained. “But we wanted to make sure people knew how much something was going to cost.”
Spain
Cyprus’ banks will be able to recapitalize on their own and won’t need state support thanks to fiscal measures buttressing the island’s financial system, the government said on Saturday.
Cyprus’ Finance Ministry said in a statement that the economy has “strong foundations” and added that it will soon unveil a growth-oriented package of measures that it’s preparing in partnership with the private sector.
The ministry made its remarks a day after international ratings agency Fitch downgraded the eurozone member by a notch to BBB-, a step above junk status.
Fitch said the downgrade was mainly due to the large Cypriot banking system’s heavy exposure to Greek debt and its greater capital needs in light of the higher likelihood that banks will take a hit on Greek government bonds that exceeds 50 percent.
Fitch said Cypriot banks would need to almost double the euro900 million ($1.18 billion) _ or 9.9 percent of gross domestic product _ to build an adequate buffer against losses on their Greek exposure if the “haircut” on Greek government bonds reaches 70 percent.
Standard & Poor’s became the first ratings agency to push Cyprus into junk territory with a two-notch downgrade earlier this month. Moody’s also rates the island just above junk.
Cyprus government spokesman Stefanos Stefanou on Saturday called the downgrades unfair.
“We consider that the downgrades don’t reflect the real state of the Cyprus economy, which is in better shape than many other economies, either in the eurozone or in the European Union in general,” he told reporters.
According to the European Commission, the island’s deficit is projected to shrink from 6.7 percent of gross domestic product in 2011 to 2.7 percent this year following a string of fiscal consolidation measures including a 2 percent sales tax hike and a two-year public sector wage freeze.
The island’s debt is projected to reach 68.4 percent of GDP this year, well below the eurozone average of nearly 87 percent.
But high borrowing costs have effectively locked Cyprus out of the international markets. The island is relying on a euro2.5 billion ($3.29 billion) low-interest loan to meet its financing needs for this year.
As regulators and attorneys general continue a year-long push to deliver help for homeowners, some left-leaning groups on Monday warned against any deal that protects banks against lawsuits.
Negotiations for a settlement over improper foreclosures have been dragging on for months between state and federal authorities and some of the nation’s biggest banks.
At stake could be a $20 billion to $25 billion pot of money from the banks and mortgage servicers that could help troubled homeowners modify loans and provide them with counseling, according to two people familiar with the talks.
Under the latest deal, about 1 million U.S. homeowners who are underwater on their mortgages could be eligible for as much as $20,000 in relief of principal owed, U.S. Housing and Urban Development Secretary Shaun Donovan has said. In return, mortgage servicers in states that agree to the deal would get immunity from lawsuits, the sources said.
Several Democratic state attorneys general were briefed of more details of the deal on Monday in a meeting in Chicago, CNNMoney confirmed. Republican state attorneys general were also to be briefed on a conference call.
News of the briefings spurred a protest on Monday outside the State of Illinois Building in Chicago by members of left-leaning groups, including Move On and the New Bottom Line, urging states to hold out for a bigger criminal investigation and a $300 billion settlement award.
Left-leaning activists and two Democratic lawmakers said they’re fighting against blanket immunity for banks, which North Carolina Democrat Rep. Brad Miller called a "very bad deal for the American people and a sweet-heart deal for banks," in a conference call with reporters on Monday.
The negotiations are between federal agencies, including the U.S. Department of Justice and the U.S. Department of Housing and Urban Development, as well as state attorneys general and the five largest mortgage servicers:Bank of America (, Fortune 500), Wells Fargo (, Fortune 500), JPMorgan Chase (, Fortune 500), Citigroup (, Fortune 500) and Ally Financial ().
The Obama Administration had been pushing for a resolution in time for the president to tout the deal during his delivery of the State of the Union on Tuesday.
But no final agreement is expected this week, said Geoff Greenwood, spokesman for the Iowa Attorney General Tom Miller, who has been leading the talks.
Foreclosures: 100 hardest hit zip codes
The final monetary award depends on the participation of larger states. But several states, including New York, Delaware and California, are reportedly cool to the latest draft, a source said. Those attorneys general have said they want the freedom to pursue their own housing investigations.
Calls to those attorneys general were not returned on Monday.
Washington analysts say they expect some tidbits from the latest proposed settlement to make Obama’s State of the Union speech.
"The President is likely to tout how the agreement will provide for principal reduction and help for more than a million borrowers," said Jaret Seiberg, senior policy analyst with Washington Research Group in a Monday research report.
"He will emphasize how this is about helping today to correct the mistakes of yesterday," Seiberg said in the report.
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European confidence in the economic outlook fell to the lowest in more than two years and German factory orders plunged as the euro area
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