November 2011
Submission by National Newspapers of Ireland (NNI) to the Review of the revised
BAI Rules on Advertising and Teleshopping (Daily and Hourly Limits (“Rules”).
National Newspapers of Ireland (NNI) and NNI Local and Regional Newspapers
represent 15 national daily, Sunday and weekly newspapers and 34 local and regional
daily and weekly newspapers with a combined weekly circulation of 6 million copies.
We welcome the opportunity to participate in the review of the BAI Rules on Advertising
and Teleshiopping (Daily and Hourly Limits) insofar as these relate to the July 2010
increase of the maximum hourly and daily advertising limits permissible on independent
Irish commercial television stations.
1. Do you believe the increase in the advertising minuteage of Irish commercial
television services has had a measurable impact on your business?
It is unquestionable that the increase in the advertising minuteage of Irish commercial
television services has had an impact on the business of the newspaper publishers
represented by NNI. As we pointed out in our response last July, it is impossible to
introduce or change the rules affecting one sector of the Irish media market without
affecting other competing sectors.
In this case, the increase in advertising minuteage has allowed commercial TV
broadcasters to approach advertisers with an offer of lower prices for more air-time. For
any advertiser, but in particular for traditionally non-TV advertisers, it’s an offer that
simply cannot be refused.
Needless to say, and as we predicted 12 months ago, this has given commercial TV
stations an important and unwarranted competitive advantage – see TV3’s improved
profitability as reported last week – while the inevitable knock-on effect is that other
media, including newspapers, have lost out.
NNI publishers have lost out on revenue from existing advertisers, who in the past 12
months have been targeted and ‘picked off’ by an advertising medium that has suddenly
become a lot more affordable.
NNI publishers have lost out on revenue from potential advertisers, who now have the
option of going straight to TV at heavily discounted rates without even giving them an
opportunity to compete for their advertising budgets.
And NNI publishers will continue to lose out on countless discussions and deals where
the traditional price benefits of press advertising, e.g., for smaller companies with limited
budgets, can now be matched or even bettered by TV.
Newspaper advertising revenues continue to fall, with a decrease in the region of 10%
likely for the calendar year 2011.
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In one of the most difficult trading periods imaginable, with the situation unlikely to
improve in the immediate future, the change in the BAI rules have had a significant,
negative impact on newspaper publishers. This impact must therefore be described as
“measurable”.
Just how this impact is to be measured is another question. NNI believes that it will be
impossible to accurately measure, or properly assess, the impact of the increase in
advertising minutes without the commissioning of objective, reasoned and independent
analysis, based on hard data, enabling the BAI to make decisions on a fully-informed
basis. NNI maintains that BAI’s failure to do this last July resulted in a misguided
decision to increase minuteage which has given commercial TV operators a significant
unfair advantage in revenue terms to the detriment of other media, including newspapers.
The BAI now has the opportunity to ensure that the analysis is properly conducted and
NNI trusts that the methodology and results of the analysis will be fully set out in the
forthcoming published review.
2. What form has this impact taken?
Price pressure (if so please provide achieved revenue per display advertising page
per month for last three years [or equivalent] with explanation of when relevant
commercial deals were struck
As the BAI will appreciate, NNI is not in a position to provide data in the form requested.
The BAI could consider approaching individual publishers with a view to obtaining
relevant data.
However, it is accepted that achieved revenue figures have declined significantly. One of
our biggest members has informed us that the average yield per colour page display has
declined by 17% over the period. NNI maintains that the increased minuteage enjoyed by
commercial TV has contributed to this decline.
Volume pressure (if so, please provide average display ad pages by month for last
three years)
The volume of a newspaper is directly related to its pagination and, in the past two years,
newspaper pagination has been significantly reduced – as evidenced by a 33% decline in
newsprint consumption.
NNI maintains that the increased minuteage enjoyed by commercial TV has contributed
to this decline. Again, NNI is not in a position to obtain data from all of its member titles
in order to demonstrate the impact that the increased minuteage has had on volume.
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Other (please explain)
While commercial TV broadcasters have won revenue from other TV channels, they have
also succeeded in wooing some non-TV advertisers. There are numerous advertisers who
have been on air with TV3 (and no other channel) since the new rules came into play in
August 2010, none of which advertised with TV3 the previous year. We estimate that
these new advertisers spent in the region of €400,000 with TV3 in the 14 months to
September 2011.
Advertisers that have only appeared on TV3 since the introduction of additional
minuteage:
Ballina Manor Hotel
Bellinter House
Blue September
City of a Thousand Welcomes
Clear Vision
CRC Conroy (recycling)
Curragh Carpets
Douglas Village Shopping Centre
Dromoland Collection
Dublin Bay Taste & Music Festival
Glasgow Piping Live Festival
Greenman Events
Griffith Hotel Group
Grooveyard Productions
Hospital Group
Independent Irish Games
IPASS
Juvenile Diabetes Research Foundation
Justgo.ie
Laois County Council
Learn Irelan
Maguire Residential Property
Rotary Watches
Silver Springs
Staedtler Ltd
Station House
TJ O’Mahony Builders Providers
Top Image
Vita Liberata
Weddings To Plan
Wow Brown
Most of these advertisers would have a clear choice to advertise in newspapers instead of
(or as well as) TV3 (see our response to Question 3 below). NNI believes that, in many
cases, TV3 has offered advertising at highly discounted rates to fill vacant advertising
slots (which newspapers could simply not have competed for given the costs of
newsprint).
NNI believes that, in order correctly to assess the impact of increased minuteage, the BAI
should talk to these advertisers and agencies and ascertain the circumstances in which the
advertising was given to TV3 rather than to newspapers or other media.
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3. How do advertisers choose between press and TV?
Each medium has its own strategic and creative strengths, and advertisers would typically
consider a range of issues before finalising their media mix:
o
What is the target audience and which medium is more likely to hit the
right people at the right time in the right place? In this respect, the press
offers specific sections and supplements for different sectors, whilst TV is
often seen as the better option for youth-orientated advertising.
o
What is the nature of the message and which medium is likely to have the
most impact in getting that message across? The press is seen as a good
medium for presenting detail and price (e.g., for supermarkets wanting to
display multiple pricing), whilst TV can be used for brand-building or for
showing off a product in a dynamic way.
o
Is this part of a campaign and, if so, how often do we need to repeat the
message and for how long? The press is good for making immediate/shortterm announcements, which TV may be used to build mass awareness
quickly.
o
Last but not least, which medium can we afford?
In light of the increase in advertising minuteage for independent TV broadcasters, the last
issue is of particular significance for advertisers who have a choice between different
media.
There are certain types of advertisers who traditionally ‘belong’ to one advertising
medium or another: global consumer brands, for example, are core TV advertisers;
retailers tend to opt for press.
That leaves a significant middle ground that all media compete for; advertisers whose
products or services are suitable for either press or TV (or indeed radio), and whose
decision ultimately comes down to what they can afford.
By increasing minuteage and therefore the advertising capacity of Irish commercial
television broadcasters, the BAI has effectively lowered the entry level for TV
advertising and has dramatically increased the likelihood of traditional press advertisers –
banks, importers, distributors, retail firms and others – moving away from the press in
favour of TV.
The increased minuteage available to TV3 – and the station’s capacity to also produce
commercials at lower cost – means they can, and do, chase clients of the press.
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4. Which advertisers are most likely switchers between newspapers and radio
advertising? Is there evidence that they have in fact switched to TV?
For many advertisers, press and radio are complementary media channels. In fact, when
planning a campaign it is unlikely that an advertiser would adopt an either-or approach to
press/radio; radio brings a message to life in a dynamic way while press can provide the
detail.
We do not have hard evidence of advertisers switching away from both press and radio in
favour of TV, although a cursory scan of any ad break on TV3 suggests that they have
(especially where an advertisement is “static” with sound). Now that the entry level to
TV advertising has been lowered, it is clear that many advertisers have moved their
budget to TV in the past year. (These companies were simply not on TV previously, but
would have used the press and/or radio.)
We refer again to the list of companies in our response to question 2.
5. What actions (if any) have you taken to mitigate the impact of the increased
minuteage?
It is, of course, for the publishers of the newspaper titles to take whatever specific actions
can be taken to mitigate the impact of the increased minuteage. What NNI can itself do is
to remind advertisers and agencies of the traditional, unique strengths of the newspaper
advertising medium – we run an ongoing NNI Press Ad of the Month competition
primarily for ad agencies, and place regular press campaigns designed to highlight the
uses of the medium.
In general terms, there are severe limits on what can be done by individual publishers.
With the continuing decline in advertising revenues, NNI member titles were already
under severe financial pressure before the changes were introduced. When it comes to
negotiating with advertisers who have a choice between newsprint and commercial TV
stations enjoying the benefits of increased minuteage, newspaper publishers cannot
compete on price without driving yields even lower and putting themselves under even
greater financial pressure. It should be noted that, unlike TV, newspapers also have to
pay for any increase in advertising by buying additional newsprint.
NNI’s position is that the increase in minuteage was a misguided decision resulting in
commercial TV enjoying an unfair competitive advantage over other media including the
newspapers. All NNI titles have to compete in the advertising market place and have had
to make huge adjustments in the recent past to make themselves more competitive. They
should not, however, be expected to “mitigate” the impact of an inherently unfair
measure which has improperly rebalanced the advertising market in favour of
commercial TV.
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6. What is your estimate of the financial impact on your business from increased
minuteage?
See our response to question 2. Specific information relating to our members’ financial
performance is not available.
7. Are there any other issues you believe the BAI should consider in assessing the
impact of increased minuteage?
Lack of consideration of impact on all media stakeholders
NNI repeats the statement, made in its July 2010 submission, that the BAI has a
particular responsibility not to take decisions relating to the Irish broadcasting sector
without paying proper regard to the effects on other areas of the media. It was and is our
contention that the BAI must consider all media stakeholders in its decision-making. This
does not appear to have been the case in granting TV stations increased minuteage. The
knock-on effect of this decision in relation to newspapers and other media has had, and
will continue to have, serious consequences. The BAI must now take the opportunity to
reverse its decision.
A level playing field
At a stroke, the BAI handed commercial TV stations a significant and unwarranted
competitive advantage over newspapers and other media. This has created a distortion in
the advertising market; not just from the perspective of newspapers but also within the
broadcasting sector. The BAI has failed to maintain a level playing field, which it is now
duty-bound to restore.
Will other broadcasters now seek parity with their commercial counterparts? Some
already have. If parity is given, this will even further affect the position of newsprint and
other non-regulated media.
An advertising war?
We believe that the increased minuteage could trigger an unacceptable advertising war
between the TV and print sectors, with the latter fighting with one hand tied behind their
back. This would be a “race to the bottom”, with Irish newspapers almost bound to lose
with more titles closing. The NNI cannot believe that the BAI intended such a blatant
inequality of arms, but this risk results from the BAI’s stated intentions to increase the
commercial revenues of the commercial TV sector, at the expense of other media.
There is also a significant risk that aggressive competition between the Irish TV sector
and competitors in the wider European sector could end up neutralising the results sought
by the BAI. In that case, no media business in Ireland will benefit from the decision to
increase minuteage.
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More RTÉ channels
RTÉ’s imminent launch of the Saorview service will only exacerbate the problem as we
see it. Extra channels means extra advertising time, more bargains (3 for 2 etc), discounts
and lower prices for advertisers and further distortion of the market.
The rise of teleshopping channels will only distort the market further.
State protection for broadcast media
Broadcast media operate under the protection of Government regulation; it is a safety net
that actually helps TV (and radio) to increase their revenues. Indeed, the BAI “gave”
extra minutes to commercial TV with the explicit objective of helping “to protect and
stimulate Irish employment and sustain Irish programme content in a context where the
television sector has suffered a significant decline in commercial revenue”. Irish
newspapers have no such protection. As newspapers, we operate in one of the most open,
free and fiercely competitive markets in the world. As competitors in the wider media
market, newspapers are confronted with State-sponsored unfair competition from
commercial TV stations. The increased minuteage for commercial TV stations has thus
provided further ‘protection’ for TV broadcasters while exposing newspapers to unfair
competition. A fair result? We do not think so.
NNI repeats its call for a proper facts-based impact analysis and for the July 2010
decision increasing minuteage to be reversed.
ends
National Newspapers of Ireland and NNI Local and Regional Newspapers
Our Members
Irish Independent - Irish Examiner - The Irish Times - Irish Daily Star - Evening Herald - The Sunday
Independent - Sunday World - The Sunday Business Post - Irish Mail on Sunday - Irish Farmers Journal Irish Daily Mail - Irish Daily Mirror - Irish Sun - Irish Sunday Mirror - The Sunday Times
Our Local & Regional Members
Metro Herald - Western People - Kildare Nationalist - Laois Nationalist - Carlow Nationalist - Waterford
News & Star - Sligo Weekender - Enniscorthy Echo - Roscommon Herald - Evening Echo - Wexford Echo
- Gorey Echo - New Ross Echo - Lucan Gazette - Blanchardstown Gazette - Dundrum Gazette - Swords
Gazette - Castleknock Gazette - Dun Laoghaire Gazette - Enniscorthy Guardian - New Ross Standard Drogheda Independent - Fingal Independent - Carlow People - Wicklow People - The Argus - Bray People
- The Corkman - Wexford People - The Kerryman - Sligo Champion - Malahide Gazette - Clondalkin
Gazette - Gorey Guardian
Contact:
Frank Cullen
Co-ordinating Director
National Newspapers of Ireland (NNI)
Clyde Lodge
15 Clyde Road
Dublin 4
Tel 01 668 9099
E: fcullen@cullencommunications.ie
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