For the foreseeable future, print will bring in most revenue at newsmedia companies. Yet digital is the way of the future. So what is print’s role — from a revenue and advertiser perspective — in this multimedia age?
I was going through my daily ritual of reading The Guardian, and yoh! Here was a full-page branding advertisement … for Google. I took a gulp out of my Coke can and, well, gulped.
Why is Google spending money on branding advertising in print, I thought? Until it flashed into my mind that the world’s leading brands can only sustain their image through brand maximisation — and brand advertising is still a great thing in the analogue world.
Google and its peers spend a fortune on public relations. They have taken on the European Commission on the privacy debate regarding targeting strategy. Their PR machine is awesome. Their presence at media events is ubiquitous, promoting the value of Google and Google News in particular to the other media and commentators around them. Meanwhile, Facebook? Well, I’ve already predicted they are at the peak of their product lifecycle. Seems to me they will soon need to brand themselves out of necessity.
The lessons for local publishers in all this are extremely constructive.
- Digital media may be expanding, but they are discovering they must rely on traditional media to build their audience base as brand values. Who remembers Yahoo? Analogue media remain the most potent means of brand promotion. Newspapers suffer from the same problem. Our Web sites are great at attracting audiences, but they don’t hang around in terms of page views or time spent. This has a geometric effect on how our visits translate into reading intensity and advertising response. Visit for visit, readers give print products about 20 times the attention they give digital products.
- Companies and governments now spend three times as much on public relations, or what I call institutional propaganda, as they do on media journalism. The public is being out-gunned by interest groups. And we are not only duplicitous in this, but our worthy values are depriving us both of revenue and reputation. I hear accusations that journalists are becoming lazier. Completely untrue. They’ve never worked harder. But as staff numbers plummet, it becomes more and more necessary to gather material from available sources rather than digging original sources out.
Newspaper readers remain the world’s most valued advertising audience. For every minute someone reads a newspaper in the United States, for example, advertisers spend US$400. On the Internet, they spend US$288 — an astonishingly high figure considering how much of the Internet carries little or no advertising. But by comparison, newspapers attract US$1140. Why? Because advertisers know they get results.
So what’s the problem? Newspapers are losing confidence as well as loyalty among readers and advertisers. And owners – and can I specifically blame non-executive board members and shareholders – have lost confidence in the products they are meant to be directing.
Coke spends 16% of its turnover on brand marketing. Unilever, a similar amount. It’s not simply that newspapers are spending nothing on external promotion. They expend little energy within their own media.
Watch CNN, Fox, Sky or Al Jazeera for less than 20 minutes, and you’ll see look-ahead promotions and branding ads. Try finding these basic concepts in your typical newspaper. Just as there is a look ahead between every programme on TV, there should be a look ahead on every double page spread in the newspaper.
The biggest reason our products are disappearing from readers and advertisers' schedules is that we have removed them from their radar. That is simply a fact.
Normally after such an outburst of opprobrium, I would go for a lie down. But duty forces me to keep going, answering two key questions on this topic:
- What is print’s role in tomorrow’s multimedia company portfolio?
- Why is print an essential component of every advertiser’s armoury?
Let’s face it: Print still accounts for more than 90% of newspaper companies' revenues; 6% is accounted for by digital and 4% from other activities. In Western markets at least, print revenues certainly are declining. For a period, it looked like a point of inflection would occur, where digital revenue growth overtook the decline in print. But this has not occurred. There are two reasons for this. And what I’m about to say won’t make me popular.
The first, I believe, is the unforgiveable neglect, described above, of our print legacy. I calculate that for every dollar our industry has lost, more than half is from lack of marketing. The recognition of this error in itself would have gone a large way to retaining our industry’s revenues and valuations.
The second is that the news media have failed to get on the digital bandwagon. Today in the United States, digital accounts for 17% of all advertising — but only 11% of newspaper advertising. For many years, newspapers’ share of all digital advertising grew. That trend reversed in 2006.
Print’s role in tomorrow’s multimedia company portfolio
Newspaper companies must grasp the digital opportunity — and anticipate that this is the long-term salvation. But in the meantime, there is business to be done to fund this digital growth. And much of it is outside the digital realm.
Marketing expenditure is split roughly into three overlapping components. In traditional terms, media advertising accounts for about one-third of all advertising, while “below-the-line” direct marketing accounts for two-thirds. This activity has grown from around one-third over the last 30 years, largely ignored by media owners. Today, digital has intervened — some search, some pure-play. But most of it, and most importantly, is driven from the below-the-line activities.
In today’s marketing world, traditional media still account for one-third of all spending, of which 90% is in its analogue form. Traditional below-the-line direct accounts for 44%, with a further 15% having transferred to digital. And there is the remaining 8% in search and other new forms of digital. Newspapers have always looked to other advertising media for their revenues, while their advertisers have been looking to other services, such as events, targeted marketing, point of sale, etc. — all of which are/were services that publishers could have been providing at a higher quality and lower cost.
The challenge and opportunity for traditional newsmedia owners has been the same for more than 25 years, and it remains as fundamental today as it was in the mid-80s. The competitive monies don’t lie among other media owners but in the direct marketing arena.
And, in fact, the evolution of the Internet has more relation to its morphing for the direct world than from the media world.
Because of the lack of realisation of the role of digital in the marketers’ world, newspapers’ share of digital advertising — which initially grew — has been declining since 2006.
So, back to the question: What is print's role in tomorrow’s multimedia company portfolio?
Unless something radical happens, print will remain the backbone of our revenue stream for some time to come. More importantly, it will continue to be the biggest force for global to local companies reaching out to new customers and achieving competitive advantage.
Have you noticed how many comparison Web sites are simply commoditising services down to price? They are brand eliminators. I talk to lots of advertisers, and the main messages I get back from them are:
- “Newspapers are no longer my primary marketing solution, but…”
- “They are the route to my other marketing solutions.”
- “I need newspapers to bring me customers and to keep me in prospects’ minds.”
One auto dealer told me a while back: “These days, I get most of my business from either direct marketing or from my Web site. But I need my newspaper advertising to get these people to my attention in the first place.” This is why so many pure-play Web sites are turning to traditional media for branding. And this is where newspaper commercial strategies and implementation need to focus.
Most marketing expenditure is not advertising. We need to rediscover how we can provide these services, particularly at a local level, in an analogue and increasingly digital world. Consider that 73% of marketing expenditure remains analogue. While the digital evolution is largely coming from the direct marketing sector, that sector must be underpinned by branding to succeed.
And this is where newspapers come in.
Print as an essential component of every advertiser’s armoury
Which takes me to the second question: Why is print an essential component of every advertiser’s armoury? The answer to the question lies in the phrase “essential component.” Newspapers punch far more than their 11% share of marketing expenditure or 8% of media consumption time.
This iconic 1979 advertisement, from what was then Doyle Dane Bernbach (now part of Omnicom), sums up the power of print in a strangely topical way.
How could you say this on the TV or the Internet?
Countless studies — in Scandinavia, the UK, the United States, Australia, and India, among others — have shown that while TV delivers imagery, it only works with high-cost creative execution. Print, however, can deliver the impact of this Volkswagen ad for the cost of a felt pen.
A great study undertaken by the India Newspaper Association a few years ago confirmed that newspapers work because they can add detail to imagery. A brand’s values are translated into execution because of delivery of benefits and product points. The Internet, of course, delivers the latter very well, but not the former. And research consistently shows that the newspaper medium is trusted. The advertising is valued rather than found intrusive, as it is by the majority of TV and radio advertisers.
Research has also shown that traditionally, a high proportion of casual readers bought their newspaper for the advertising content. Do you know anyone who subscribes to Fox for its advertising? Or there’s the famous joke about a radio voiceover: “If you like the sound of this, simply clip the coupon at the end of the commercial.”
Recent events, however, show we can no longer rely on our historical reputation for effectiveness. We have to reaffirm it. And this is a key loss in our lack of investment and confidence in our own business.
There is one final question. How should newspapers manage and market their multiple media portfolio? Here I have big reasons for concern.
Convergence may continue to be a buzzword of the naive, but there is no such thing as a converged advertiser. Advertisers use one marketing channel for one purpose and others for different purposes. Simply arguing that an advertiser should be on a newspapers’ Web site because they buy the print version is missing the point. The reason newspaper companies have been losing share of the digital economy is because they have tried to tailor the advertisers’ money into the newspapers’ raison d’etre. Would you buy such a proposition?
Instead, newspapers must look at their vast array of skills, resources, and market presence to offer up alternative services — primarily at a local level — that uniquely respond to advertisers’ market needs, rather than try and shoehorn their spending into their current portfolio of products.
So what does all this mean?
The most important point is that newspapers remain the most potent and effective means of communication globally, but in particular locally. Print will remain the means for local companies to promote their brands for decades, but newspapers must invest in demonstrating this, through case studies, testimonials, and continuing investment in advertising sales.
Second is to recognise the third element of marketing, namely below-the-line, direct spending; the invisible 60% of our clients spending that we ignore. We cannot only capture much of this, but we can also improve the quality of their traditional requirements — and use this as a springboard into new forms of digital activity.
There are very, very few newspaper companies with sufficient advertising sales people to serve their current customer base, never mind grow their business. We need better — and better-trained — sales people, not simply order takers, who can translate client needs, strategies, and concerns into alternative solutions.
I’ve been in newspapers for 36 years. OK, I’ve never known it so tough. But I’ve never seen so many opportunities out there – some obvious and low-hanging, others more complex – waiting to be grasped.
How newspaper advertising works
Here are a few facts about how newspaper advertising works, drawn from various studies I have undertaken over the years on reader behaviour and advertising effectiveness:
- Recall of the average full-page advertisement is 2.1%. One reason we all get confused about digital response levels and click-through rates is that we never really understood the levels of response to print ads. Recall of 2.1% translates into action levels of tiny fractions. Yet it is very possible to help advertisers improve response levels to their print and digital advertisements. Our digital strategies also need to reflect this, with a higher level of understanding of click-through and action rates that reflect the market.
- Colour can make advertisements less effective. A key component of content assimilation is complexity. On average, colour increases response. But colour also increases complexity logarithmically. The more complex, in print or on screen, the harder the brain finds it to navigate. Too many pages and advertisements within them are over-designed and, therefore, under-consumed.
- The average advertisement is looked at for about a quarter of a second. The eye subconsciously scans the page and initially determines a reading order. Within this, an ad is glanced at for about a quarter of a second. As the reader may change his or her reading order as they go on, the key for the advertisement is to attract the reader’s attention instantly. Many don’t.
- A quarter of a second is more than many ads deserve! I undertook an analysis for one of the world’s biggest media buying groups into the effectiveness of newspaper advertising among major global national and international brands. We discovered one-third of advertisements didn’t work because they didn’t follow a basic set of rules of advertising design.