A view from Gideon Spanier

Joint ad sales can help newspapers survive digital storm

The idea of setting up a joint ad sales house has become more urgent.

When Rupert Murdoch gives his blessing to an idea, there is a decent chance it will happen. And so it may turn out with joint newspaper ad sales – the once improbable suggestion that fierce rivals might pool their sales to improve scale and efficiency.

News UK, Britain’s biggest newspaper group, has become an enthusiastic supporter of joint ad sales and enlisted Enders Analysis and an army of lawyers and economists to make the case on behalf of the "big six" publishers.

Once upon a time, the prospect of News UK, Trinity Mirror, Guardian Media Group, Telegraph Media Group, DMGT and Northern & Shell teaming up would have rung alarm bells at the Competition & Markets Authority. However, newspapers are no longer in a position of strength. Print ad sales declined 9% in 2014 and nearly 13% last year. At least the consolation then was that online might offset that fall.

Not any more. Print revenues have fallen more than 14%, or almost £100m, in the first eight months of 2016, according to Nielsen. August was the worst performer, following Brexit, as revenues plunged 18%. At the same time, news brands’ digital ad sales have hit a wall as Facebook and Google take share.

Suddenly, the idea of setting up a joint ad sales house has become more urgent. The most immediate benefit for publishers is they could slash costs. But the argument goes that it should also appeal to agencies and advertisers, which would be able to buy from a single sales point and access a bigger, better pool of data.

It remains to be seen if all the publishers will agree, but they have hired Steve Booth, a wise agency veteran, to knock heads together.

The clock is ticking. Newspaper chiefs hope to have a completed plan for a sales house within weeks. Then a legal submission will need to be made to the CMA.

One TV sales chief struggles to believe the regulator would allow six sales houses to go into one. But the case for joint ad sales is that the market has changed and news brands have become substitutable with other media: Google, ITV, Channel 4, Sky and Facebook now control more than half of the UK’s annual ad sales of £20bn and bring in at least £1bn each. By contrast, national newspapers are set to take less than £1bn this year – a fall of £500m in six years. If that continues, the market will vanish by 2028.

Those backing joint ad sales insist their argument is based on economics, not media plurality. But consider this: without joint ad sales, more papers will go bust, with a consequent effect on culture and diversity. That ought to chill the heart of anyone who loves media.