Fisher Hawaii
pulls ads from two
Honolulu dailies

The office products firm is
paring its $425,000 annual budget
and taking it to competitors

By Peter Wagner
Star-Bulletin

A major advertising client has pulled out of Hawaii Newspaper Agency after more than 20 years, reducing its $425,000 annual ad budget and taking the business to newspaper competitors Midweek and Pacific Business News.

Office products wholesaler and retailer Fisher Hawaii last week began a six-page insert in Pacific Business News similar to full-page ads that formerly ran each month in the Honolulu Star-Bulletin and Honolulu Advertiser. The same insert is to run in Midweek this week.

Ron Ho, general manager at Fisher, said the company needed to cut advertising costs and approached HNA for a discount. But the agency, which handles circulation and advertising for both papers under a joint operating agreement, held fast to its advertising rates.

"They were willing to give us more space but they wanted to tie us into a contract where we'd spend the same amount this year as we did last year," said Ho.

Mike Fisch, president at HNA and publisher of the Advertiser, said he regrets losing the longtime customer.

"We never like to lose any of our advertising clients," said Fisch. "But the reality is advertisers go from medium to medium and try different things. He made the determination he needed to try something else for his business."

Fisher, across the street from Office Depot in Kakaako, has felt the effect of aggressive advertising in recent months by its neighbor. Office Max, just a few blocks away, also has been a fierce competitor. Since October, the two mainland-based retailers increased their print advertising by at least 40 percent, Ho said.

Unable to keep pace, Fisher decided to cut its $35,000-a-month advertising budget to beef up its inventory.

"By switching to the Midweek and PBN combo, we saved more than 35 percent and increased our reach," Ho said, noting Midweek reaches 280,000 households on Oahu each week compared with a combined daily circulation of about 170,000 between the Advertiser and Star-Bulletin.

But HNA officials say comparing Midweek -- a free weekly mailout -- to paid subscriptions of the two dailies is comparing apples and oranges.

"Midweek is mailed to every household but that doesn't mean everybody reads it," said James George, HNA's vice president of marketing and development.

A gallop study last year found that 73 percent of Oahu adults read the Sunday Advertiser while 63 percent of Oahu adults read Midweek, George said.

Ho said pulling out of HNA was strictly a business decision. Sales at Fisher last year were flat compared with a good year in 1998, he said.

"We're hoping it works," Ho said. "It's a gamble."

But other major clients of HNA have been restive since plans to close the Star-Bulletin were announced in September by the paper's owner, Liberty Newspapers Limited Partnership, and joint operating agreement partner Gannett Pacific Corp, which publishes the Advertiser. Some were angered over HNA's plans to maintain its advertising rates despite a potential loss of subscribers while others worried about a drop in circulation.

Windward auto dealer Mike McKenna pulled half of his advertising budget out of HNA late last year and put it in Midweek in protest of the agency's plans to keep rates the same despite the potential loss of 60,000 Star-Bulletin subscribers.

McKenna said he recently signed a $350,000 annual advertising contract with HNA, down from $450,000 last year. HNA officials challenged those figures but could not immediately provide details.

McKenna said his new advertising strategy relies more heavily on television.

While the closure was scuttled after a series of legal setbacks, the Star-Bulletin's battle for survival got some retailers looking for alternative advertising strategies.

One of them, City Mill, plans to divert the "bulk" of its print advertising budget from HNA to Midweek this year. "Our advertising budget is going to stay the same but we think Midweek will be more efficient for us," said Carol Ai, Vice President of Marketing at City Mill. "Everybody's looking for added value, and so are we."

Ai would not disclose details of the company's advertising budget.