When Gannett’s USA Today announced 10 new executive appointments and a “pretty radical” restructuring August 27, the company left plenty of questions unanswered.

 

What exactly are these new “content rings,” which eventually will supplant the familiar color-coded News, Money, Sports and Life organization of both the paper and the USA Today website?

 

How does it happen that two young execs from USA Today’s BNQT action sports site are now in charge of all business development and digital development? Does success in covering dirt-biking and skateboarding translate to building a broad digital domain?

 

After the initial press release and an Associated Press article, Publisher Dave Hunke has been unavailable for comment. But let me take a shot at connecting some dots, starting with the most basic question: What are the problems to which this is a solution?

 

It is a long list, actually.

Print circulation, advertising, hotel distribution, travel decline

USA Today’s print circulation and print advertising are both in a deep swoon.

 

Paid circulation has fallen 20 percent in less than two years and, at 1.83 million, is a full 500,000 below its peak in 2004.

 

USA Today has always been coy about what percentage of that circulation comes from hotel distribution, but it may have been as much as half. Its deal with Marriott and other chains has changed. As any traveler can observe, the paper-outside-your-door pattern is far from universal anymore. At many hotels you now find a stack of USA Todays in the lobby or dining room, often as not next to a stack of Wall Street Journals.

 

Business travel, USA Today’s circulation lifeblood, has never rallied to pre-9/11 levels. Also, year by year, month by month, more of those travelers are packing a laptop or next-generation device so they have alternatives for a morning news fix, including a digital edition of their hometown papers.

 

The print advertising picture appears to be even grimmer. I say “appears to be” because Gannett stopped several years ago breaking out USA Today advertising results in its quarterly financial reports. The bad news now is buried as part of overall results for its publishing division.

 

In last Monday’s edition, the Sports section had no ads and the Life section, a single quarter-page legal notice. In the entire paper I reviewed, there was one full-page ad for a Pepsi-Pizza Hut promotion, and a two-thirds page announcing the J.P.Morgan/Chase rebranding. The other odds and ends of fractional ads included what may have been a free ad on a TV cancer special and, in my edition, a quarter-page ad promoting the weather coverage on Gannett’s Tampa-St. Pete station.

 

Advertising volume builds through the week, but all three of the editions (August 28, 30 and 31) I checked had multiple house ads — a sign the sales department isn’t bringing in enough business to plug the available positions.

Digital successes offer promise as national competition intensifies

Digital is less obviously a trouble spot for USA Today. The website strikes me as well-organized (echoing the paper’s sectioning) and is well-trafficked, with about 4.5 million unique visitors a month. USA Today was early with applications for mobile and the iPad, and more frequent users than I give those high marks, especially the iPhone version.

 

Unfortunately, none of that necessarily transfers to robust digital advertising revenue, to date a disappointment industry-wide. I also have not monitored how competitive USA Today is with breaking news, the top content preference of digital readers. But with its daily magazine approach and a much smaller staff than competitors like nytimes.com and CNN.com, USA Today starts that race a few steps back.

Speaking of competition, USA Today plays in a tough league, trailing the Wall Street Journal in total paid audience and The New York Times in digital traffic. It’s hard for Gannett to match Rupert Murdoch’s deep-pocket investments in circulation promotion and increased general and international content. You don’t need to know the full canon of Thomas Friedman to conclude that a global perspective is on the rise, but USA Today still has a minimal presence abroad.

How this change could help USA Today, Gannett

The new moves come with a cut of 135 positions, including an unknown number from the newsroom. Cost control is also evident in earlier deadlines, so USA Today’s once comprehensive sports section frequently runs without baseball results from the night before. In fairness, readers can find those results on USA Today’s website, but the sports fan also can turn to ESPN’s juggernaut site, which boasts game highlights.

 

Gannett deserves high marks for not buying additional newspapers over the last decade (shedding 15, actually) and thus avoiding the huge debt burdens that have swamped McClatchy, Tribune and others of its peers. The company still delivers on the bottom line, and the promotion in February of finance officer Gracia Martore to president and COO was popular with investors and analysts.

 

During that decade, Gannett instead made a variety of digital acquisitions. But picking winners in that game is not easy; nor does it necessarily add up to a coherent company-wide digital strategy. Chris Saridakis, Gannett’s digital chief and an alum of its Point Roll acquisition, departed this spring after just two years on the job. A Gannett regulatory filing said he “failed to meet minimum performance goals” both years.

 

Now in the smaller arena of USA Today, Gannett is going to try again to graft successful entrepreneurs (Rudd Davis and Ross Schaufelberger of the BNQT action sports site) into its complex management structure. That has been a tough trick to bring off for many legacy media companies.

 

Publisher Hunke came to the USA Today job in April 2009, after applying some drastic therapy to the money-losing Detroit Free Press and News with reduced print frequency and aggressive new media experimentation. It now appears, in retrospect, Gannett wanted a similar extreme makeover for its national newspaper.

 

The announcement hints that USA Today content, digital in particular, is on its way to becoming much more vertical. Life editor Susan Weiss was promoted to executive editor and will report to an advertising exec (for planning content, not editing it). So one might expect more “how-to-live-your-life” stories, always a USA Today strength, organized around ad-friendly topics like travel and personal technology.

 

These developments raise again a long-time issue at USA Today and parent Gannett — whether the news culture can hold its own in resources and influence against the company’s business culture.

 

A flare on that front came this summer when USA Today founder Al Neuharth wrote Hunke a blistering letter, leaked to The New York Times, deploring the decision to run a wrap-around Jeep ad, which largely obscured the front page. It was “the low point in any decision any USA Today publisher has ever made” in its 28 years, Neuharth wrote. Too much of that sort of thing, he added, and you risk chasing away news staff who “understand what a newpaper is” and can put one out.

 

As a reader, I might not go that far. There’s less space for news than before and little flavor of breaking new ground editorially. But USA Today still delivers, as former editor Ken Paulson, once put it, a solid 20-minute read.

 

The pace-setting paper of Neuharth’s day and its digital versions, though, clearly are not flourishing in 2010. That may be reason enough for Hunke’s “pretty radical restructuring” — details to follow and final destination unknown.