I’ve heard from several folks that the Citizen-Times, driven by the Gannett mothership, has at least one foot in the door when it comes to outsourcing ad production jobs to India. From what I’ve heard, just a few functions have been transferred from Asheville ad-production people to overseas.
It doesn’t sound like a full-blown loss of local jobs to workers in India, but you know how it goes. Once the foot’s in the door, it’s only a matter of time. Heard anything? Lemme know.
Outsourcing is nothing new for newspapers (think Associated Press). And newspapers that outsource jobs to India is also nothing new. This Editor and Publisher story from May nicely sums up what’s happening, and it mentions Gannett a couple of times.
It’s just another sad trend in the newspaper business. I’ve bolded a few lines:
Now the outsourcing of advertising production is drawing wider attention. In the past year-and-a-half, several dailies have transferred that function to overseas outfits, mostly with offices in India.
There are several forces motivating newspapers to move their ad production work offshore. Foremost is the dire need for cost savings. The wiring of the globe for high-speed Internet access, coupled with the growing familiarity of letting foreigners do work once handled stateside, have come together in a common business strategy that has piqued the interest of publishers.
“India has always had brilliant, educated people,” Paul Saffo of the Institute for the Future told Business Week in a 2003 article on the rise of India and outsourcing. “Now Indians are taking the lead in colonizing cyberspace.”
Several companies have sprung up or leaped into action to go after ad production — a department that creates ads for mostly local clients in categories like real estate, automotive, and retail. Outsourcing companies vying for a piece of that business include 2AdPro, Express KCS, Affinity Express, and CCI Sourcing.
Their advantage — and emotional touch point — is that they maintain artists and staff in far-flung Indian cities like Chennai, Bangalore, and Gurgaon, where there is a steady stream of high-quality, inexpensive workers. These companies maintain they can do the same work for much less, saving newspapers anywhere from 20% to 60% of ad production costs.
Since newspapers maintain different cost structures, the dollar amount saved varies wildly depending on several factors: the location and size of the newspaper, pay packages, head count, benefits, the state of equipment, the software used, and the volume of ads produced.
Even pinpointing the staffing size of an ad production department is difficult, says Mort Goldstrom, vice president of advertising at the Newspaper Association of America. Different papers include different functions in that department, he explains.
When asked, however, many sources agreed that a back-of-the-envelope calculation shows that metro newspapers can realize a savings of about $500,000 a year when ad production work is offshored.
Chains like the Sun-Times Media Group, which in February announced that it will outsource its ad production work for its 95 publications to Affinity Express, expects to save $3 million annually.
“What I like about this,” says Goldstrom, “is if they can do it more efficiently and advertisers are happy, that is a good thing.”
But the process of exporting any work to an outside source — even within the U.S. — needs to be monitored closely. Sure, a newspaper might be able to save by tapping cheap labor overseas, but there are several minefields to navigate in the process.
The Columbus (Ohio) Dispatch, for example, lost several hundred thousand dollars during the labored process of transitioning its ad work to Pune, India. That case, noted later in this story, serves as a cautionary tale. Many of the companies handling the outsourced work have just started doing so with news- papers, and there are many kinks that need to be smoothed out.
Gannett Vice President/Production Austin Ryan, who is overseeing the outsourcing of ad production work at several of the chain’s properties, says, “If you look at today’s business models, [newspapers] have been outsourcing for years. I think our industry is fully capable of doing this.” However, he adds, “I think we need to be selective in what we outsource.”
Todd Brownrout and Pervez Sikora saw all of this coming. They worked together at the Los Angeles Times, where Brownrout served as senior vice president of advertising. Sikora, who was the paper’s director of advertising technology, was charged with a mission in late 2005 to look into offshoring. He says they had to come up with a list of internal functions — not just the “no-brainers” like IT, but other areas as well that could be sent abroad.
Sikora was no stranger to the concept; his background included work with a Bay Area firm that handled offshore call centers. But the level of sophistication surprised him when he and other Times executives went on a fact-finding trip to India.
“It was pretty eye-opening,” Sikora recalls. “I just had not realized the extent and the type of work happening in India.” The Times and its then-classified subsidiary, Recycler, signed to do a test run with Affinity Express, a company that specializes in ad production work with U.S. headquarters in Elgin, Ill., and offices in India.
Sikora and Brownrout left the paper in March 2006 before the project was in full swing and decided instead to start their own outsourcing company, 2AdPro.
Brownrout, who describes himself as a newspaper guy through and through, says he “sees the writing on the wall, with pressures on costs all the time.” Newspapers are expected to produce more ads than ever, not for just the daily but also its niche publications and online affiliates. “It’s an area where there is tremendous cost squeeze,” he adds, “and newspapers can’t walk away from it.”
When a paper contracts with 2AdPro, the company’s staff produces the ads that come in over the transom. “You want to send us 50 ads a month? Fine. You want to send us 500 a month? Fine,” says Sikora, who points outs that newspapers pay by the volume of ads, not for dedicated employees.
It works like this: A newspaper salesperson or production coordinator logs on 2AdPro’s custom site, which syncs up with the newspaper’s ad management system (it can also work without an ad management system) and inputs the order for the ad, specifying images, text, sizes, and other data. Half a world away, 2AdPro staffers in Bangalore and Chennai pick up the request, reproduce the ad, and deliver it to the paper electronically the next morning.
2AdPro divides its 150 or so staffers into teams, each with an expertise in such advertising categories as real estate, automotive, and the like. “In the initial stage,” explains Sikora, “we capture everything we can about the customer. We study the newspaper to understand what it currently looks like — all that is brought in.”
Gannett outsources with 2AdPro, and Ryan says he is “elated” with the process. He admits there are learning curves —”Some of the ads they do for us are not so good,” he says — but that is to be expected. He does like the ability of getting anywhere from 35 to 100 spec ads over a handful of days. “No newspaper is capable of that, because we don’t staff that way,” Ryan adds.
Jobs going to India is the U.S. way of saying we don’t give a dam about our country. Why not outsource our military? I think you get the point.