Under pressure

Print media owners had a torrid 2009 as advertising budgets were cut, sparking almost trench warfare between many publishers as they battled for share of a revenue cake that shrunk by around a third in 12 months. While press took the brunt of the early downturn in advertising spending in the form of a classifieds collapse in 2008, agency and brand budgets followed suit last year.

Despite this, there is still a mood of optimism around the underlying strength of print amongst newspaper proprietors such as Paul Cooke, managing director of the Irish Star. “Advertising in newspapers has proven to be very effective for last-minute communication, which is the current trend for advertisers,” he explains. “The flexibility that press advertising allows has proven to be a key success factor. The grocery sector, for instance, has continued to invest a large portion of their advertising budgets in press.”

Persuading a whole new generation of marketers and media planners about the merits of press in a digital media age is a real challenge for the industry though. Oliver Keenaghan, general manager of News International’s Irish operation, agrees that publishers and the newspaper industry at large need to change the conversation around the medium with marketing decision-makers.

“In the past we talked about what level of reach we could achieve; we now need to evaluate the level of relevancy it has – how much resonance it has with an individual rather than a randomly scattered message,” he points out. “We talked about an impact or a contact; we now need to talk about the connection. It’s the difference between someone being aware and someone responding positively. We have to move from talking about exposures to experiences – about how much time we are spending with them and how much valuable information we are giving them.”

Changes in readership

The Audit Bureau of Circulations (ABC) figures for the second half of 2009 showed daily sales had fallen by 6pc or almost 50,000 fewer copies per day than last year. The cancellation of corporate subscriptions to some quality dailies affected their numbers, while the general rise in unemployment, especially in the construction sector, also removed buyers from the daily tabloid market.

Publishers seem to be experiencing different sales dynamics at play between Monday and Friday versus weekends. According to Paul Farrell, commercial director of The Irish Times: “We have seen consistent sales growth since the launch of our Weekend edition over 18 months ago, which has been very encouraging especially in attracting new and younger readers to The Irish Times. The Monday to Friday market is tighter due to a combination of the economic downturn and the decline in people in employment.”

The ABC figures seem to bear out this view as sales of Sundays have held up slightly better, with total sales of Irish and UK papers down by 4pc (or 48,000 copies.) There were a few exceptions however – The Sunday Times’ circulation of 112,982 was up by almost 3pc year on year, while the Sunday Independent, although losing just over 2,000 copies (1pc), sold an average of 268,000 in the July–December period.

The good news for most Irish publishers is that readership, the currency for most advertisers, has not fallen in line with sales. But as Farrell points out there are some logical recessionary-based behaviours at play here. “We know from our own research that in certain households we have moved from having three papers sold directly to three readers, to now having one or two sales for the same three readers, due primarily to the impact of the downturn. Our readership is now at the highest it’s ever been in our 150 year history as this trend continues to bring more readers to the paper.”

The latest JNRS data on reading levels for dailies and Sundays show that broadsheet newspapers generally performed better than tabloids over the last 12 months. This is not unlike the radio market where ‘news’ stations have grown at the expense of many of the music-driven stations.

Many within the industry are also hopeful that they will continue to recruit readers and buyers within the young adult category and that the internet won’t have it all its own way. “Perhaps surprisingly, younger consumers have a preference for reading newspapers in print format over online,” says Keenaghan. “Sixty-three percent of 18–21 year olds favour print compared to 25pc who read online [Youth ID research]. Reasons cited for this preference include reading comfort, commuting habits and down time away from the PC. Therefore, it’s unlikely online will entirely replace the printed format but rather will supplement it, determined by reading occasion.”

Marketing and product development

INM’s Herald AM and Metro (from The Irish Times and Associated Newspapers) finally put down the boxing gloves to combine their resources under the impressive new Metro Herald. This is good news for advertisers as these titles attracted new recruits into the print category (both readers and advertisers alike) and offered a very cost-effective route into print. In addition, the commuter titles brought innovative and creative ad formats to the market. This enlightened approach has now spread to some of the more established publishers, allowing flexibility that the medium previously lacked.

While there were naturally few new product launches by hard-pressed publishers last year, what was encouraging was the continued investment in marketing. Much of the above-the-line focus continues to be around star columnists – witness the recent battle between the Sunday World and the News of the World over crime correspondent Paul Williams. In the daily market papers like the Irish Star have focused on Eamon Dunphy, Ray Houghton and recent recruit Eddie Hobbs.

It is evident that different approaches are being tailored to reflect the varying demands and recessionary mindsets of core buyers. “While there will always be a need to promote the editorial content of a paper, there are a growing number of strategies that newspapers can use to market themselves successfully,” says Keenaghan. “These include loyalty and reward programmes, strategic partnerships with complimentary brands, sponsorship and events, and customer engagement.”

Will the iPad save newspapers?

The issue of paid-for content for online newspapers has been brought centre stage once again, ever since Rupert Murdoch announced that he would be introducing a pay wall for The Sun and The Times newspapers later this year. In the US, the New York Times also said that it would adopt a subscription model in 2011 for users who regularly access its website. Although some newspaper owners here have flirted with charging for online access to special-interest sections (eg, crosswords, death notices, etc.), the general view seems to be that there are many obstacles to attracting many subscribers for wholesale news content. “It will be difficult for local publishers to make this work commercially as long as RTÉ continue their move into the online publishing territory and as long as they continue to provide online content free of charge,” says Keenaghan.

The future for digital revenue may lie beyond the physical website, however. Mobile applications, for instance, may offer better potential for persuading people to pay for immediate news content. The Irish Independent was the first Irish newspaper to launch an app for the iPhone, providing a daily snapshot of the paper’s main stories for €2.39 per download.

Similarly, e-reader devices from companies like Sony and Amazon also present new opportunities for those publishers who can re-purpose some of their best content or features into attractive packages for subscribers. And that’s before the Apple iPad arrives.

It would be easy to get carried away by the hype associated with the new device and the appearance of an app for the New York Times on it, but in reality the newspaper industry probably views the introduction of the new device with mixed emotions. On the one hand, there is the tantalising possibility that the new ‘Jesus Tablet’, as it has been nicknamed, will enable Apple to do for the publishing and newspaper industries what it did for the music business – provide a means to get the digital consumer to pay for print content. On the other hand, it potentially speeds up the erosion of the more lucrative medium of print that has been in train for some time amongst Generation Y.

There will also be the niggling issue of whether publishers will be willing to relinquish control of their content distribution to any of the global companies who gain critical mass for their digital devices. But perhaps that will be a nice problem for newspaper owners to have at some point in the next five years.

This article first appeared in Marketing Age magazine.