REVENUE GENERATION 2005
WAN is delighted to invite you to read this report on the;
2005 World Newspaper Advertising Conference
& Expo
Held at the
Sheraton Roma Hotel, Italy
Thursday 24 and Friday 25 February 2005
The conference attracted
470 participants from 70 countries
The 2005 World Newspaper Advertising Conference & Expo, was
generously hosted by the Italian Newspaper Publishers Association,
(FIEG).
PRESENTATION CONTENT & SPEAKERS
Newspapers keep rolling along
Increasing market share in 2005
Countering the stereotype
Everything communicates
Is broadcast fragmentation good for
newspapers?
Panel discussion: The new internet
opportunities
Inserts versus "Run of press"
advertising
The true value of newspaper
advertising
Broadsheet to tabloid without pain
Finding new spaces for
advertisements
Emphasise the positive
Small steps, big rewards
Managing classified advertising
migration to the internet
Getting closer to the agencies
Pure newspaper advertising
effectiveness
Newspapers defend common
interests
True Value of Newspaper Ads
Azzura Caltagirone
Vice President, Italian Newspaper Publishers
Association
Moritz Wuttke, Director, Head of Business
Development, PUBLIGroupe,
Switzerland
Sue Moseley, Managing Director, Initiative Futures
Worldwide, United Kingdom
Mark Austin, Chairman, EMEA, Mediaedge:cia,
United Kingdom
Ross Biggam, Director General, Association of
Commercial Television in Europe
Martha Stone – Newsplex USA
Melanie Hall, Tampa Tribune, USA, Andrew
Saunders, The Globe and Mail, Canada, Gitte
Vase, NORDJSKYE Medier, Denmark
Lisa Szal, Director of Advertising & Marketing,
Calkins Media, and President
of the NAA Display Federation
Masa Peura, Product Development Manager,
Helsingin Sanomat, Finland
Patrice Matthey, Marketing Director, Le Matin,
Edipresse Publications,
Switzerland
Altug Acar, Advertising Group Marketing & Projects
Coordinator, Hurriyet,
Turkey
Luca de Montezemolo, President of Fiat and Ferrari
& President of the
General Confederation of Italian Industry
Jim Chisholm, Director, Shaping the Future of the
Newspaper Project, World Association of
Newspapers
Milks Gasper, Director for Europe, Press flex,
Hungary
Mark Rix, Deputy Managing Director, Manchester
Evening News, and Gary
McNish, Managing Director amra, United Kingdom
Ingvar Sandvik, Associate Director, TNS Gallup,
Norway, & Helge
Holbaek-Hansen, Newspaper Marketing Director,
Norwegian Media Businesses' Association
Andras Math, Research and Communications
Director, Ringier, Hungary
Magnus Darmstadt, Dagens Nyheter, Sweden &
Erik Wilberg, Wilberg Management,
Norway
NEWSPAPERS KEEP ROLLING ALONG
Azzura Caltagirone
Vice President, Italian Newspaper Publishers Association
Ms Caltagirone opened the conference with an impassioned argument for the
value of newspapers to both readers and advertisers.
Ms Caltagirone asserts;
" (The Newspaper is) a modern product that combines both innovation and traditional
strengths."
"They (Newspapers) are active tools which lead people to think, and they stimulate
people's minds,"
“Considering that the number of newspapers titles are increasing over the world
(WAN data), the newspaper is not in danger.”
“Newspapers are very important to advertisers as they are the last mass market
medium after the fragmentation of all the other media (TV) .”
Newspapers have distinct advantages over other media:
-
placing an advertisement is a quick process which may take only a few
hours from conception to realization
-
collecting and producing advertising materials is simple and cost
effective.
-
since newspapers contain a broad range of news, they cover a broad range
of consumers as well.
The role of newspapers
Role of newspapers is to be free and independent, to inform and to make people
read more. A very successful practice in Italy is to bundle newspapers with books,
thus 62 million books being sold.
Free newspapers also had a positive social effect by bringing new people to read
newspapers and teach young to read. Thus they increase knowledge and social
responsibilities.
"I believe, in fact I'm sure, that newspapers have a lot to offer, not only
to readers but to advertisers," she said.
.
INCREASING MARKET SHARE IN 2005
Moritz Wuttke, Director, Head of Business Development, PUBLIGroupe,
Switzerland
PubliGroupe is a global communications company that serves the media and
advertisers worldwide. Its core business is the sale of advertising space for the press,
directories and the Internet.
Mr Wuttke, the Chairman for the Conference, provided an overview of the
global advertising market and the challenges and opportunities faces by
newspapers today -- a theme that he predicted would repeated throughout
the conference. He is the Head of Business Development at Publigroupe SA,
Switzerland.
Good news for newspapers
The good news for newspaper industry is that the advertising volume is increasing in
most of the important markets – US, UK, Germany and Japan – after a difficult period.
Printed media has between 14% and 75% of the total ad spent.
The bad news is that printed media is losing advertising market share to other media,
but it has still the largest share among all media – 44%
As for the changes in media consumption – cinema did not lose so much, internet
increased steeply, while newspapers and magazines remained quite stable. In terms
of the minutes per day spent by consumers the internet performs better than
newspapers and magazines together.
Press readers are reading less and getting older: but more than that, they read less
when they get older. This is contrary to the general belief that people become
readers as they grow older.
Young readers are reading more thanks to the free dailies
Young people read if the content is tailored to their rhythm of life.
"There are worrying trends (more competition, changing reader and consumer
habits) but newspapers can increase their market share.”
“There are a multitude of different ways to approach the issue and you will here from
many (during the conference) experts over the next two days on how they are going
about it."
Mr Wuttke presented six ideas for increasing market share:
-
Position the newspapers as the last mass media.
-
Create new products for young readers and adapt existing products to the
audience’s multitasking habits.
-
Consider pricing existing products in new ways.
-
converge with your internet media. Why fight it? Accept its strengths.
-
interact with your readers using mobile.
-
Bundle your advertising offer with other media – multiplying the offer in this way
works and create attractive packages.
COUNTERING THE STEREOTYPE
Sue Moseley, Managing Director, Initiative Futures Worldwide, United Kingdom
Initiative Futures Worldwide is one of the leading advertising and media company
worldwide. It has offices in 44 countries across the world. Initiative Futures
Worldwide is global research company arm and centre of excellence for consumer
and customer understanding.
Newspapers in a very competitive market
The total communication industry offers a multitude of choices, so newspapers are in
a very competitive market and media planners also have a very difficult task. The
total spent for communication is unexpectedly split: only 40% went ATL (Above The
Line) in 2004 and the rest BTL (Below The Line).
Ad – spend recovers to the record levels of 2000
Over the last 5 years ad spent recovered and in 2004 outpaced 2000 (2000 was the
all time high in global ad expenditure).
The increases started in 2002 and the growth rate of 2004 was really impressive at
8.1%. For 2005 we predict growth of 5.8% (current prices) bringing the total ad
expenditure to 362.8 bill USD.
In constant prices 2005 will be higher than the 2000 record of ad spent.
So this year the economy is the healthiest it has been since 2000.
Newspapers are the 2nd largest media vehicle
Newspapers are the 2nd largest media vehicle taking 28.1% of global advertising
revenues. However newspapers share of global advertising is in decline from
32.2%in 2000 to 28.2% in 2005. This is also true for mature regions like Western
Europe. Newspapers lost share because of;
-
The internet
TV. TV especially, is fragmenting both in emerging and developed markets.
In 2001 and 2002 ad spent in newspapers decreased globally and is predicted to
return to 2000 levels in 2005 in current prices.
Newspapers have been hit harder than Television and are losing out to more
accountable media.
When it comes to the cost of advertising, the highest CPT (78.2 USD) is for cinema,
traditionally a very narrow, expensive, targeted media but very powerful. Internet is
still expensive 19.15 USD per CPT. TV is cheaper than newspapers in many markets
but not all (In the US TV is sold at crazy low rates).
As for the price increases forecasted for 2005, newspapers lead with a predicted
41% increase and a 14%increase is forecast for TV.
Newspapers offer much more
The current perception of newspapers as information providers with a social role is a
narrow view.
Ms Mosley believes newspapers have been stereotyped unfairly, with agencies and
clients believing branding to be the role of TV and calling consumers to action to be
the role of newspapers;
"There is a situation where newspapers have been stereotyped – newspaper
advertising provides information. – Branding that's for TV alone."
Part of the problem is the way that newspapers have sold themselves and
newspapers should take a different tack.
Newspaper advertising has six distinct values
Citing research by the Newspaper Marketing Agency in the United Kingdom, Ms
Mosley countered the stereotype, saying newspaper advertising had six distinct
impacts.
Newspaper advertising:
-
Is a "call to action" that prompts consumers to respond
-
Provides depth of information
-
Promotes brand values by bringing the consumer closer to the brand
-
Creates a "stir and force" that compels consumers to appraise or
reappraise brands
-
Provides brand extension when used in conjunction with other media
-
Has topicality to raise the profile of causes and campaigns
The notion that newspapers don't build brand is nonsense
The notion that newspapers don't build brand is nonsense, says Ms Mosley, citing
the agencies UKL research she said;
"If you look at perceived product benefits, the newspapers add incredibly to building
the brand,"
"And the addition of newspaper to TV added immense support in pushing purchase
decisions."
Her advice to newspapers:
"Don't undersell yourselves."
She reinforced the idea that newspapers are fantastic, and there is a need for more
research to prove it, in an environment running out of mass channels.
EVERYTHING COMMUNICATES
Mark Austin, Chairman, EMEA, Mediaedge:cia, United Kingdom
Mediaedge:cia is a top media company with a network of 175 offices in 80 countries.
The company is owned by WPP and had a turnover of 14bill USD in 2004. Presently
chairman of the EMEA division of the company, Mr Austin has a vast experience in
media on different regions around the world.
Newspapers are competing with all media forms
Newspapers are competing with all forms of media, the old, the new arrivals and all
the media that is ‘just around the corner’.
Competition comes from new unexpected players
The old model was simple, if the rules were followed success followed and so;
Mass brand, mass media, mass audience, = Commercial success
The old model no longer exists," says Mark Austin.
"There are very few mass brands, mass advertising doesn't work, mass media
doesn't exist. You can see a huge shift in the way marketers are thinking and
spending their money."
Now the competition comes from the most unexpected players. As media choice
explodes. More choices include:
-
PVR (personal video recorder) that allows people to skip advertising on TV
-
Internet is not a young media any more – it has a heavy penetration in the US
and in many other regions
-
Fragmentation of consumer behaviour
-
Targeting the main shopper is very difficult as women have so many roles not
only the traditional ones.
-
More and more advertising avoidance
-
Declining importance of advertising – BTL gaining importance
-
Information overload: in 1990 there were 838 TV Commercials on all
channels a day – that was no more than 6 h. In 2004 the number of
commercials climbed to more than 7000 a day which total 49 hours.
-
Everything communicates -- the branded delivery truck, the Coca-Cola can,
the promotional sign on the shelf of goods in the Wal-Mart store. It isn't
other media that are the only competitors for advertising with newspapers -it is the advertisers themselves.
The latest winners and some good news for newspapers
The clear winners are online, outdoor, CRM while the losers are newspapers and TV.
But newspapers cannot exist without advertising.
The good news, for newspapers, is that 80% of on line readers also read print.
"The growth in non-traditional channels is massive and will continue to grow," he said.
"New technologies will continue to develop, making it even harder to communicate
with consumers."
Newspapers need to leverage their massive power
So where do newspapers stand in this new media environment?
"The opportunity for newspapers is how to leverage the massive power of the
newspaper brand and the reader relationship," he said. "People trust the
brand." He offered this advice:
-
Build and invest in your brand -- not just the title but the reader relationship
-
Merchandise the power of that relationship and the trust.
-
Differentiate with the competition.
-
Create partnerships with agencies and clients.
-
Offer tailored solutions
-
Adopt payment by results pricing
"Other traditional media are suffering too," he says. "There is a lot to
learn from each other. Look at who is standing out."
Mr Austin left the conference with this thought;
“Mankind is blessed with a creative talent for inventing and applying ideas, and
cursed with an inability to shed them when their time is passed”
AC Grayling.
IS BROADCAST FRAGMENTATION GOOD FOR NEWSPAPERS?
Ross Biggam, Director General, Association of Commercial Television in
Europe
Audience fragmentation is having a negative impact on television advertising. Some
predict it will lead to the demise of the 30-second advertising spot.
Will newspapers be able to profit at the expense of broadcasters?
Don't count on it, says Mr Biggam, who has a counter-argument for those who
predict the death of broadcast television -- an argument that sounds like a challenge
to newspapers.
Broadcast TV advertising is still widely used (278 min/day for TV compared to just 65
online). It is intensely consumed. It is appealing both to those who create television
ads and to audiences.
And broadcast TV provides research data at a level of sophistication and accuracy
which other media do not match.
He presented the reinvented business model for TV considering the new realities:
-
Fragmentation is not an exclusive problem of TV but also of the other media
including newspapers and radio
-
Cross media investment increased – one stop solution for advertisers does
not exist
-
Broadcasters are also not idly watching their advertising slip away reacting
by:
-
Aggressive new strategies for programming: more live sport, music, reality TV
-
Distribution: family of channels to create a package with targeted narrow
channels together with mass channels.
-
Advertising - diversify sources of revenue
But the 30-second commercial will not be the single "killer application" for
advertisers in the future, says Mr Biggam. Does this mean newspapers will take
share from TV?
"The shift will not be from TV to print, rather from non-innovative to innovative," says
Mr Biggam.
"May the best -- and most innovative – media win." He gave as examples of
innovation in the newspaper industry light versions of broadsheet titles and free
papers.
PANEL DISCUSSION: THE NEW INTERNET OPPORTUNITIES
Martha Stone, Training Director, Ifra Newsplexes Worldwide, USA,
Melanie Hall, Regional Sales Manager, Tampa Tribune, USA,
Andrew Saunders, Director, Advertising Sales, The Globe and Mail, Canada
Gitte Vase, Key Account Manager, NORDJSKYE Medier, Denmark
Martha Stone presented three very different but successful examples of multi-media
companies that are offering cross-media advertising opportunities (selling
advertising across media channels) in one form or another:
-
Nordjskye Media in Denmark, which has created a dedicated cross-media
advertising department for its newspapers, radio, TV, magazine and
internet
-
The Globe & Mail in Canada, which has a dedicated cross-media sales team
supported by traditional advertising departments at its newspaper and
television properties
-
Tampa Tribune in the USA, which has cross-trained sales people who
occasionally make cross-media campaigns for newspaper, TV and internet.
They created a special team that is able to sell packages of more channels:
internet, TV, newspapers.
Ms Stone, the moderator of the session, provided an overview of the efforts, which
was supported by case studies from each of the newspaper executives. Here's what
they said:
-
All agreed that developing incentive structures was the most difficult
part of the equation. Ms Hall's approach was to let the sales reps
themselves formulate the plan - 3 percent of incremental revenues earned by
cross-selling. There was also the problem of cultures: “my client, not yours”
-
All agreed that training and even more training was essential. Sales reps
in different media have their own jargon and they need to find similar
ground.
-
The benefits of cross selling included additional revenue and market
share, stronger relationships with customers and added value for the
advertisers.
-
There isn't any one reason for pursuing cross-media selling. Nordjskye did
it because "the single media were performing poorly and we had to make the
work together," said Ms Vase.
Nordjskye started this project in 2001and it was really difficult. Their goal was to send
one person to one customer to sell al media, this was different from the current
practice of each person selling separately each media. There were clear benefits of
this initiative including increased revenue, better relationship with customers and
improved employee jobsatisfaction.
It was a long process in which they learnt that “Changes in the organisation don't
happen overnight," says Ms Vase.
"A willingness to change is important. And you have to educate both customers and
salespersons."
Ms Hall from Tampa Tribune said that there are some challenges of multimedia
advertising:
-
communication
-
focus
-
skills sets
-
culture
-
cross training
-
ownership
-
preparing the customer
More advantages to the advertiser
Another obvious advantage of multimedia selling is increased reach. Ms Hall said
that combining all the media Tampa succeeded to offer a reach a 75% reach in the
designed market area.
“There are several advantages of multimedia selling” said Ms Hall:
-
Credibility, gained by providing advertisers with multimedia, one stop
shopping,
-
Increased results through the media multiplier effect
-
Improved penetration - Tampa’s goal is to get advertisers into every home,
every day, using TV, internet and newspapers to reach the customers.
Multichannel selling as a defensive strategy
At the Globe & Mail, "we take this multichannel selling as a defensive strategy
because all of our clients are being attacked by all media in all markets." Globe &
Mail is part of Bell Globemedia, a Canadian Media Company active in broadcasting,
print and internet.
The media landscape changed due to emerging technologies, alternative media
options, content digitalisation and distribution and wireless penetration. Consumers
Changed the way they consume media: multitasking, time pressure, more choices
and the result is commercial avoidance and the constant change in media
consumption patterns.
Their integrated marketing approach was designed to create new value and for
media owner to leverage technology, publishing, production and research. “There are
many benefits of Integrated Media when you get it right” said Mr Saunders. The
advantages of the client - constant manage context, content and creative of the
media experiences touching their customers – while for the agency – add value to
their client environment where resources are under pressure.
Mr Saunders mentioned that media agencies are not structured to easily execute
cross marketing plans and that customized solutions take longer and are more
complex to execute.
INSERTS VERSUS "RUN OF PRESS" ADVERTISING
Lisa Szal, Director of Advertising & Marketing, Calkins Media, and President
of the Newspaper Association of America Display Federation
Calkins Media is a privately held publishing company, headquartered outside of
Philadelphia, Pennsylvania. Ms Szal talked about the American advertising market.
Within newspaper advertising, there are three key categories of revenue: classifieds,
national and retail. In the US share shifted with classified going from 40% in 2000 to
36% last year due mostly to the changes in help wanted advertising. Retail share
grew from 44% in 2000 to 47% largely due to the incredible growth in preprinted
advertising inserts. National advertising (including telecommunications, travel,
automotive manufacturers, etc.) stayed relatively flat at 17% compared to 16% in
2000.
The ROP (Run of Paper) decreased by 1.8% inches over the last 5 years partly
because of retail categories that scales back on traditional marketing efforts. In the
meantime the inserts increased at a very high pace. The flexibility of distribution for
newspapers was the major factor for this development as it allowed targeted zone
delivery, demographic targeting and flexibility by day of the week.
Pre-printed advertising inserts are booming, which is both good news and bad
news for newspapers. Good, because both advertisers and readers use inserts. But
bad because the rise in inserts corresponds with a drop in display advertising in the
newspaper itself, which reduces the editorial environment.
Readers enjoy inserts and studies show that 83% of adults regularly or occasionally
use newspaper preprints. On average, readers look at 5.5 store categories per issue.
Readers prefer inserts in smaller sizes to handle them easier. The average insert is
kept in the home three plus days (62% keep them three or more days). Heavy insert
users, particularly women, keep inserts much longer and inserts from product
categories that are more expensive purchases are also kept longer. One fourth of
readers keep inserts that interest them a week. Sunday is the preferred day for
inserts.
Ms Szal gave some details regarding the way readers like preprints. The Newspaper
Association of America commissioned a study of consumer preprint usage and found
many reasons for its popularity. Here are a few of them:
-
Readers do not like small type disclaimers and hidden prices in the inserts,
or payments schedules rather than full final prices
-
68% of adults report the price in small print after rebate lines are annoying
-
61% of insert readers are annoyed by legal disclaimers
-
60% are annoyed by small print with actual price
Maybe it is because today’s shopper is time poor or maybe because they believe that
help in store isn’t what it used to be but the study found that:
-
46% of adults use newspaper preprints to plan regular shopping
-
76% check for sales
-
63% browse for fun
-
65% of U.S. adults say that preprints in newspapers are part of their Sunday
routine.
-
62% say preprint saves time by comparison shopping at home
-
67% say they save money by identifying lower prices
-
Inserts work because provide easy comparison shopping (71%)
-
Consumers say inserts are:
o
Predictable (65%)
o
Realistic (50%)
o
Portable (29%).
-
Preprints save time and money according to 65% of adults
-
70% of preprint users say that they make a point of looking at inserts when in
the market for something
-
63% say they enjoy browsing even when they aren’t looking for something in
particular
-
29% of all preprint users report taking inserts with them when they shop.
Advertisements in the newspaper have real advantages
But advertisements within the newspaper have advantages as well. "The experience
of reading ROP ads is different than preprints," says Ms Szal.
"Readers encounter ads coincidentally while reading stories, by browsing the paper
and by seeking particular ads.
Almost two-thirds of adults actively checks ROP ads for shopping ideas, sales and
comparison shopping."
Using many examples, Ms Szal showed what newspapers were doing to increase
ROP ads and revenues. One way is that newspapers are creating targeted editorial
environments both inside their core product as well as outside using niche
publications that they have developed to fit the needs of their readers as well as of
their advertisers.
The advantages of these ads are many: advertisers can request to have ads in
specific sections; readers get more involved with these ads; they reach wealthier
readers; the ads don't force themselves on readers; and they allow the ultimate
control of size and position.
"They can build brand as well as product recall through a though-provoking
layout that grabs your attention," says Ms Szal.
THE TRUE VALUE OF NEWSPAPER ADVERTISING
Masa Peura, Product Development Manager, Helsingin Sanomat, Finland
Helsingin Sanomat is part of SanomaWSOY Corporation, the largest media company
in the Nordic countries. SanomaWSOY is a European media company with
operations in 17 countries.
Net Sales (2004) of 2,5 billion euros makes SanomaWSOY the largest media
company in the Nordic countries with operations in newspaper, magazine, books,
television/ cable tv, kiosk, press distribution, bookstores, movie theatre and printing
Helsingin Sanomat is the leading newspaper in Finland and part of newspaper
publishing division of SanomaWSOY (Sanoma Corporation)
Buying an advertisement is not always as easy as it should be
Buying an advertisement in a newspaper sometimes isn't as easy as it could
be. That is a big complaint from advertisers, and one that has an impact on
newspaper revenues.
The Helsingin Sanomat, the biggest daily subscription-based newspaper in
Scandinavia and Finland's leading national paper, decided to do something
about it. It looked at new pricing models and contact guarantees, different
ways of measuring impact, and talked with media agencies and others working
closely with its customers. The project resulted in making a complex
newspaper pricing structure easier for clients and more profitable for the
paper.
New pricing models
"Newspapers are putting more and more emphasis on defining new pricing
models and structures to meet the requirements of the customers and to
answer the challenges that other media are creating," says Mr Peura, "We
discovered that there is a lot to be done in the scope of the current
pricing structure too."
The newspaper looked at four key areas -- pricing process, pricing strategy,
discounts and rate card. It refined its pricing strategy and developed new
discount and rate card structures. "But most important of all, we now have a
better understanding of pricing dynamics," says Mr Peura.
They started by dividing categories of products: economy products, normal priced
products and premium products. They harmonized the price differences on days,
pages, size of advertising and campaign discounts. New strategy was made based
on all the above.
Mr Peura's presentation examined how to prioritise improvements, make the
buying as easy and transparent as possible, understand the meaning of discounts,
and optimise the prices in the product portfolio.
BROADSHEET TO TABLOID WITHOUT PAIN
Patrice Matthey, Marketing Director, Le Matin, Edipresse Publications,
Switzerland
The Edipresse Group is active in Switzerland, where the company is registered,
Spain, Poland, Greece, Portugal, Romania, Ukraine, Russia and Mexico. It publishes
over 125 titles and has more than 3,000 employees, of whom about 1,800 are based
in Switzerland. It strives to ensure that its expansion takes place in a controlled and
coherent fashion. Its strategy is fundamentally based on the written word and on
three simple principles.
How to downsize to tabloid without downsizing advertising
Mr Matthey, marketing director of Le Matin, provided a lesson on how to downside to
tabloid without downsizing advertising revenues as well.
Le Matin is the leading daily in the French Switzerland. The advertising sales are
exclusively outsourced to Publicitas, part of Publigroupe.
Circulation increases
Le Matin changed to a smaller format in 2001. Since then, readership has increased
by 20% and circulation 6%. Cover price increased 30% for single copy sales and 25
percent for subscriptions and still the circulation rose. They reached two important
goals: increase feminine audience and rejuvenate readership.
What happens to advertising rates?
"If the format is reduced by 50 percent, do we have to do the same with the
price? Certainly not!, The advertising impact remains the same," says Ms
Matthey.
"But we decided to decrease the price by 20 percent in order to give a positive signal
to the market. In the first year (2002) revenues decreased but in 2003 they started to
boom. Advertisers waited for the circulation success before investing.
With hindsight the price was too low
"If he had to do it over again, Mr Matthey admits he would make the reduction only
10 percent. And, oh yes, advertising revenues increase 12 percent in the year
following the launch, despite the discount.
Testing was a key to success
The success wasn't accidental; Edipresse did a lot of testing before the launch, said
Mr Matthey. Testing with readers was the first step. Advertisers too. Even nonreaders. And, since they were hoping to attract younger readers and more women,
they were tested too.
Mr Matthey gave them some very interesting exmaples of creativity in advertising:
H&M bought exclusivity of an issue to launch the collection designed by Karl
Lagerfeld. They also initiated a very interesting advertising proposal for regular
people to have their picture posted on the web or in the newspaper.
"They liked it," Mr Matthey said and finished by offering these potential keys to
success:
- Succeed with readers first
- Keep the advertisers informed
- Respond to advertisers expectations with creative solutions
- Remember that advertisers are ready to pay for creative and innovative solutions
FINDING NEW SPACES FOR ADVERTISEMENTS
Altug Acar, Advertising Group Marketing & Projects Coordinator, Hurriyet,
Turkey
Hurriyet is the leader of Turkish newspaper market since 1948. It has a 41% market
share in the newspaper advertising market.
Newspapers advertisers are becoming more demanding
Newspapers advertisers are becoming more demanding. Conventional advertising
space sales strategies are not working as well as they used to. Television
is taking larger advertising market share.
We need to offer something different
How Hürriyet, Turkey's leading daily, is combating these challenges was the
subject of Mr Acar's presentation. "As newspapers, we all face difficulties in
increasing our revenues and market share," he says. "First thing, we've got to do
something different, which means we need different and new spaces in the
newspaper," says Mr Acar.
Co-operation with editorial is vital to success
But these new spaces and forms of advertising are not possible without approval
from the editorial department. "We all know that editorial departments have ethics
rules and we always respect these," says Mr Acar. "We aim to persuade them that
we are in the same boat, and need new spaces and different applications on these
pages."
New spaces = New revenues
Some examples of the new spaces created by the initiative are:
-
One of Hürriyet's Sunday supplements -- "Keyif," or "Pleasure – is dedicated
to leisure time. The name appealed to Alfa Romeo, whose launch slogan for
its 147 model was "Enjoy the Pleasure of Driving Alfa Romeo." "So we
associated this slogan with the name of our supplement and managed to get
Alfa Romeo to do a 4-page cover, keeping our "Keyif" brand on the front
page."
-
Another example was Algida who took ad spaces on each pages on the top
and bottom of the page, again the name “pleasure” being suited for the
emotion associated with the product.
-
Another 4-page advertising cover, for the Maxxium Group, the importer of
Absolut and Bacardi, was a collection of cocktail recipes – another
appropriate theme for a magazine called "Pleasure."
$4 million in new revenue
The projects have generated new advertising clients, additional revenues
from existing clients. In 2003, Mr Acar's department carried out 70 such
projects, for additional income of US$ 4 million. In 2004, that increased by
62 percent and a total of 6,500,000 USD were raised from special packages. A
higher price per unit ad was achieved.
"By attracting customers through differentiation and product development, we
have taken a larger slice of the advertising cake," he says.
EMPHASISE THE POSITIVE
Luca de Montezemolo, President of Fiat and Ferrari & President of the
General Confederation of Italian Industry
As a former newspaper man and as a newspaper advertiser, Mr Montezemolo
brings a unique perspective to the conference. He says newspapers should do more
to enhance their position in the media mix.
"I think that an important conference like this should be focused on how to
emphasise the unique and strategic role of the written press," he said via video hookup from Fiat headquarters.
"The media and ad agencies have to do more work to emphasise the unique value of
advertising in the written press."
Newspapers appeal to an important market
He says consumers are bombarded by many different messages, and that the
written press remains a voice of reason that appeals to a select group.
"I think it is extremely interesting to look at the power of the press from
the point of view of both an economic and political approach," he says. "As
chairman of Italy's business marketing association and the largest Italian auto group,
the press is a very important instrument for us. Through the press we can approach a
very selective part of the public.
"There is also political interest," he says. "Italian business wants a free press, a
strong, pluralistic press very close to the free market. It is a very interesting moment.
The communications world is very complex, very difficult, but with many
opportunities."
SMALL STEPS, BIG REWARDS
Jim Chisholm, Director, Shaping the Future of the Newspaper Project, World
Association of Newspapers
In an hour-long "master class" on how to build and implement a successful
advertising strategy, Mr Chisholm provided a wealth of ideas that newspapers
can institute immediately to increase advertising revenues.
He called them "small steps, big rewards", and here are some of the important
concepts delivered during the masterclass:
Prospecting brings rewards
"One area where we can do a great deal of work to improve our business is
prospecting. The science of identifying who new customers might be and working
with this - classifying them in new ways, contacting them and enhancing these
contacts over time are steps we have to take."
We are selling results but a lot of the ads do not work
"What we are actually selling to our customers are results, and we are under
a lot of pressure to show return on investment. But the problem is, a lot of
advertisements don't work. We should demand better advertisements from
agencies. Before we make media accountable, we have to make the ads work."
"A large part of our work is to make advertising work better for readers."
Richer readers are less loyal but they generate more ad-revenue
"The richer the readers are, the less loyal they are because they tend to
read a lot of papers. But as the number of rich readers goes up, the level
of advertising revenue grows disproportionately. A very small change in
wealth of your readership has a large increase on your ability to generate
ad revenue."
Advertiser research is an important tool
"Send a questionnaire to advertisers asking them where they spend their
money, how they believe your medium performs in the mix. Advertisers love
them. Send two percent of advertisers a questionnaire every week."
"A very common cause of lack of advertising sales is a lack of sales people.
Analyse and demonstrate the need for sales people. We're not covering enough
ground to get the revenue into the business."
"One company. One sales force. When we set up an internet business, we think we
need a separate sales department. No other industry would do that. You
need to have an integrated approach to the two."
"One of the problems we have as an industry is we don't have enough data on
what we are and what are readers are."
"By just applying a small improvement to these different areas, you can
double the amount of revenue you bring into the business."
MANAGING CLASSIFIED ADVERTISING MIGRATION TO THE
INTERNET
Milks Gasper, Director for Europe, Press flex, Hungary
The WAN Shaping the Future of the Newspaper project has been tracking the
migration of classified advertisements from print to the internet world-wide through its
Shaping the Future of the Newspaper project.
Mr Gasper, is conducting the migration survey for WAN, started his presentation with
some myths about the newspapers and the digital reality:
-
internet was said to be another source of revenue for newspapers – true but
it will also change the advertising market: price wars.
-
Internet does not threaten newspapers existence: true but it takes from the
audience and it is not making money accordingly. Cost should be also kept
under control.
The survey was done through 70 interviews, representing 350 newspapers, from 35
countries. Here are some of the findings of the survey:
-
There are 5 stages of migration:
o
Predigital
o
Upsell
o
Decoupling
o
Pricing leverage
o
New equilibrium
-
The loss of digital for print: auto 15%, property 9%, jobs 16%
-
Migration is inevitable, but slow.
Most but not all classified advertisements will migrate
In mature markets, an average of 30 percent of jobs ads, 40 percent of property and
50 percent of autos remain with print.
"We don't need to give up on the rest. If we follow the right strategy, they will migrate
to our own sites," says Mr Gaspar.
Headlines from the survey
-
Even if newspapers succeed in keeping on-line ads on their own sites,
revenues will be severely reduced due to the lower prices for advertising
on-line
-
Newspapers must cut costs to accommodate new market conditions
-
Recruitment advertising is the first to migrate. If you see recruitment
migrating, be prepared for auto and real-estate advertising to follow
-
Peer-to-peer advertising is not worth pursuing. "You can't compete with
E-bay," says Mr Gaspar.
-
Newspapers cannot compete on price with internet-only sites, but should
compete instead with brand and services. "Three colleges kids with an online
site will always beat you on price," says Mr Gaspar
-
Defensive strategies fail
-
Cooperation with other newspapers is essential, even if they are
competitors. "You will reach critical mass (high volume), technological
costs will be shared and you will be able to compete with digital-only
sites," he said.
-
"In order to succeed, you need to know where you are in the migration
process, and know your market position. To manage migration, no matter
where you are in the process, your chief asset is your brand value," he says.
-
More on the WAN Shaping the Future of the Newspaper project at
http://www.futureofthenewspaper.com
GETTING
CLOSER TO THE AGENCIES
Mark Rix, Deputy Managing Director, Manchester Evening News, and Gary
McNish, Managing Director amra, United Kingdom
Newspapers are doing all they can to develop and implement strategies that
enhance relationships with advertising agencies and to increase revenues in
the long term? Mr Rix and Mr McNish think newspapers can do more, and their
presentation focused on what the regional press in the United Kingdom was doing in
this arena, both as an industry and as individual titles.
The realities of the newspapers industry force us to change: except for Spain,
circulation from all western European countries decreased last year. Free dailies are
a real success with a 265% increase over 1998.
Getting closer to the agencies is crucial, if only because 81 percent of
global media billings are in the hands of just five media groups. "Publicis, IPG, WPP,
Omnicom and Aegis have collared the market with the bulk of the planet's media
spend," said Mr Rix. "What we have witnessed is a shifting of power from the many
to the few, both in agency consolidation and media owner consolidation so now,
more than ever, it is crucial that we develop effective partnerships."
Press is still the most important advertising medium in UK: 31% share. But this is
also a very consolidated market with 7 publishers having 81% of the market.
Consolidation is beneficial to agencies as it makes easier to deal with the medium
and provides an incentive to use regional newspapers.
Be pro-active with agencies
Above all, be proactive with agencies, says Mr McNish. "We are committed to
working with our agencies and our clients to determine a total marketing strategy for
them," he said. "To do this, we must look at a potential menu of things that their
clients can tap into, whether it be any one or all of following ideas: sponsorship,
supplements, wraps, inserts, competitions, offers, shapes, classified, teasers,
watermarks, trailers, polybag offers, sampling, SMS text response, online
opportunities, A boards, posters, leaflets, radio, events and DVDs."
Mr Rix and Mr McNish offered a host of advice and case studies, including:
Newspaper publishers should band together in industry associations to
present a coherent proposal about the power of the press to advertisers.
More emphasis should be placed on training sales people who have the
specific responsibility for selling to advertising agencies. In the UK, the
Media Skills Qualification, which is supported by agencies and clients, is
recognised as improving the sales offering from newspapers: this training gives a
clear perspective of UK media landscape, reveal changes in the industry and clients.
Providing more and better research on the effectiveness of newspaper
advertising is a wise investment.
Publishing groups should create print advertising competitions to entice advertising
creative teams into working in the newspaper medium.
The last part of the presentation a list with examples of all possibilities for
communication in the industry was given: sponsorship, supplements, wraps, inserts,
competitions, offers, shapes, classifieds, watermarks, trailers, sampling, SMS text
response, online, A boards, posters, leaflets, radio, events, product mention – DVD,
CDs.
Everybody can learn from the examples given of some integrated media campaigns
presented by the 2 speakers:
•
•
Dixons: 24 page Euro 2004 magazine, In paper advertising, England
supporters kit, DVD’s – polybagged & coupon, Wall chart & stickers, Instore promotion, Dixons Staff involvement , Integrated online campaign
Unilever: an integrated online / offline campaign creating awareness &
offering advice and information
PURE NEWSPAPER ADVERTISING EFFECTIVENESS
Ingvar Sandvik, Associate Director, TNS Gallup, Norway, & Helge
Holbaek-Hansen, Newspaper Marketing Director, Norwegian Media Businesses'
Association
There is no doubt that the advertising market hungers for more information and
documentation to demonstrate advertising effectiveness.
The Norwegian Media Businesses' Association and its member newspapers
decided to provide it. They have launched The Norwegian Advertising Effectiveness
Study, a three-year project financed by major newspaper groups, the paper producer
Norske Skog, and carried out by TNS Gallup worldwide information and research
organization
Advertising effectiveness shows newspaper ads work
"Readership figures and coverage is one thing. Ad effectiveness is something
quite different," says Ms Holbaek-Hansen, who said the project would supply
the market with "exciting new information and documentation."
Sales double
The first results show: newspaper advertising works. Just ask the
mustard manufacturer Edmond Fallot, which saw its sales double through the
first campaign carried out by the Advertising Effectiveness Study.
Mr Sandvik and Ms Holbaek-Hansen described a "pure" newspaper advertising
campaign – no other marketing activities were involved or influenced the
results. The objective was to show
-
consumers commitment to media used
-
affinity for advertising
-
the effect of advertising on brand commitment
It was an exclusively newspaper, innovative and original campaign.
The data showed that the campaign had strong motivational effects that
doubled sales, built brand awareness and strengthened brand position, and
increased consumers' commitment to the product. 2 months after the campaign the
brand awareness and the add recall remain at higher levels.
Other campaigns will follow.
NEWSPAPERS DEFEND COMMON INTERESTS
Andras Math, Research and Communications Director, Ringier, Hungary
For a nation of 10 million people, Hungarians have an overwhelming choice of media
-- 25 TV channels, 150 radio stations, 50 websites, 150 magazines, 10
national daily newspapers and 18 local and regional newspapers.
Television's advertising market share surpassed newspapers for the first
time in 2004. Newspapers argued that their audience was more desirable, but
the advertisers weren't convinced.
So 17 newspapers and the Hungarian Newspaper Association banded together to
set the record straight, undertaking a massive advertising effectiveness
study, conducted by IPSOS, said Mr Math.
The study looked at media consumption, attitudes toward advertising in
different media, effectiveness of television and newspaper campaigns, brand
awareness, and awareness of creative elements in advertising, among other
topics. The topics of the search were:
-
media consumptions patterns
-
general attitudes into advertising
-
effectiveness of TV and newspaper advertising
-
brand awareness
-
awareness of print creativity
Research Headlines
Some of the findings of the study, which was carried out between September and
October 2004:
-
Like most people, Hungarians find television advertising annoying: 57
percent said they were annoyed by the ads, compared with only 5
percent who found newspaper ads disturbing.
-
The study found that only 6 percent of viewers paid attention to
television ads while 83% look for other activities.
-
Adding print to television campaigns adds 30 percent to recall and
brand awareness.
-
And print is more effective than television in influencing buying
decisions.
-
At the same budget, campaigns using print media show a 19% better
recall
The newspapers presented the results to advertisers and agencies
individually, then held a "Celebration of Print Media" conference to drive
home the results.
TRUE VALUE OF NEWSPAPER ADS
Magnus Darmstadt, Dagens Nyheter, Sweden & Erik Wilberg, Wilberg
Management,
Norway
The RAM database -- RAM for Research and Analysis of Media -- is a massive
collection of information -- more than 1.2 million individual advertising
observations from 25 newspapers and their readers in Sweden, Norway and -coming soon -- the United States.
The presentation by Mr Darmstadt and Mr Wilberg described how RAM works
and examined how its helps contributing newspapers build their advertising
business. It not only can provide a global analysis of the data, but individual
newspapers can use it to survey and report back in "real time" to advertisers on
the effectiveness of their ad campaigns -- it only takes 48 hours from survey to
report.
Both newspapers and reader panels contribute information to RAM, which
includes information on the advertisements (size, color, frequency, etc.),
the newspapers (format, circulation etc.) and from the panes (demographics
and habits as well as advertisement they have observed, read and
remembered).
RAM produces what Mr Wilberg called "the DNA" of advertisements – measuring
such variables as observation, brand awareness, appeal and usefulness.
RAM to advertisement success factors
RAM provides some general findings on advertising effectiveness. For
example:
-
The more of the newspaper you read, the more ads you see. But even people
who read substantially less of the newspaper see a significant number of ads.
-
Advertisement observation increases with age. Old people observe more adds
than young people.
-
For the most part, size does matter; the bigger the ad, the more people
observe it. Yet their is little difference between the observation rates of
full page and half page ad
-
The average rate of observation of newspapers adds is a little more than 40%,
the biggest rate being for double spreadsheet – almost 60%
-
Inserts are interesting -- they are observed by more readers than any
single section of the newspaper.
-
Colour is best -- full colour ads are observed at higher rates than any
other ads
-
Picture intensive ads are seen and remembered more frequently than text
intensive ads.
-
Classifieds are noticed by 40% of readers with real estate rating the highest.
-
There is not much difference in the efectiveness of adds among the days of the
week. The seasonal variations are not big either.
-
Findings regarding compact or broadsheet are also very interesting: in the size of
adds, compact has an unexpected advantage for quarter and whole page over
broadsheet.
Mr Darmstedt and Mr Wilberg also presented case studies of how individual
newspapers used the data to accelerate their advertising businesses.