MEDIA FORUM: Is now the time for the Observer to admit defeat? Is the Observer running out of excuses? Last week came the news its circulation had dipped below 400,000 for the first time since the reign of King George VI. The second part of the double wha

Last week’s Rosie does Docklands TV documentary made for depressing viewing. The programme, which charted Rosie Boycott’s final days at the helm of the Independent and Independent on Sunday, carried few surprises - if we believed the lurid tales leaking out of Canary Wharf, which we did, we thought we knew about the insane consequences of trying to run a paper on a pocketful of small change.

Last week’s Rosie does Docklands TV documentary made for depressing

viewing. The programme, which charted Rosie Boycott’s final days at the

helm of the Independent and Independent on Sunday, carried few surprises

- if we believed the lurid tales leaking out of Canary Wharf, which we

did, we thought we knew about the insane consequences of trying to run a

paper on a pocketful of small change.



We’d heard about the internal war of attrition - whole editorial floors

reduced to wide-open prairies, groups of paranoid staff huddling in

corners and clinging to the few remaining desks, section editors facing

nervous breakdowns as they tried to make sense of lunacy piled upon

lunacy. All the while, Boycott trying to convince her staff, us and

probably herself, that she believed black was white.



It doesn’t take a genius to guess that senior management at the Guardian

and Observer - the Indie titles’ closest rivals - were watching

transfixed.



They probably came to gloat. If so, they made a mistake. There were

lessons to be learned here and, last week, it became clear that the

Observer has never been in greater need of good advice.



Recently published Audit Bureau of Circulations figures for August show

the Observer’s sale dipping below 400,000 for the first time since

1949.



Coincidentally, it emerged that a big cost-cutting programme is now on

the agenda.



Observer staff feel beleaguered. There is believed to be widespread

resentment among senior Guardian staff that the Observer’s losses

swallow up all of the modest profits made by its sister title. They

believe product development and potential for growth on the Guardian is

being stifled. Morale has been low for a while, despite the fact it has

a new editor in place; Roger Alton having recently replaced Will

Hutton.



When the Guardian bought the Observer in 1993, there was relief that it

had found a good home, perhaps the best possible. The Guardian also

promised big things for its new acquisition. The plan was to modernise

it and allow it to benefit from the Guardian’s marketing know-how while

remaining sensitive to the Observer brand.



A handful of relaunches later and the promised renaissance has failed to

happen: the latest revamp, under Alton, so far seems to be no

different.



So what now? Is it time to admit defeat? Either merge it with the

Independent on Sunday - as was originally mooted back in 1993 - or turn

it into the Sunday Guardian?



Carolyn McCall, the ad director of the Guardian and the Observer, says

we shouldn’t believe everything we hear, especially on the cost-cutting

front. She states: ’A journalist of Alton’s stature would never have

taken the editor’s job if that were a possibility. As for the

circulation figure, that would be worrying if it hadn’t come in August -

though it was still double the Independent on Sunday’s circulation

figure. Alton is bringing a distinct editorial style to the paper and

people should look at the trend over the autumn. Our figures have been

rising through September.’



But is that enough? Surely the paper is testing everyone’s patience at

Farringdon Road? McCall counters: ’It’s not an easy market and the

Observer is not making money but it’s not exactly losing very much

either. A constituency of 400,000 is enough to make money provided you

have the right economic model to fit. It’s up to us to make that work.

Agencies fail to understand the importance of the paper for our

seven-day publishing cycle and what it contributes to the Guardian

group. It’s the last liberal Sunday newspaper and that really means

something.’



Many in the advertising market remain sceptical. Tim Kirkman, the press

director of Carat, states: ’The Observer under Guardian management has

struggled to find a niche for itself. A sale or merger with the

Independent on Sunday would make sense. Between the two of them you

could create a strong Sunday paper. Alternatively, a Sunday Guardian

would also seem to make sense; it could run very well off the back of

the brand values of the Guardian. The Observer has never been able to

install strong brand values. They’ve tried to do three or four different

things with it in a handful of years and it has gone in all sorts of

directions. The Observer seems to have lost its raison d’etre.’



Kirkman, though, doubts whether there will be much joy for anyone in the

Sunday broadsheet market. Others agree. Chris Shaw, the joint managing

director of Universal McCann, says: ’We can put many of the Observer’s

troubles down to a contraction in the newspaper market, especially on

Sundays. There will be winners and losers and maybe the Guardian has

backed the wrong horse. But the Independent on Sunday is the weaker

title and it also has an extremely uncertain future - Tony O’Reilly will

almost certainly want to focus all his time and resources on the

daily.



’They haven’t managed to transfer Guardian values and style to the title

but I don’t believe there’s too much wrong with the editorial

product.



However, they’ve failed to establish a unique positioning from a

marketing point of view. It’s a difficult thing to do. I don’t think the

answer is to launch a Sunday Guardian but if the Observer continues to

lose money, they may well have to change their minds.’



But Steve Goodman, the press director of the Media Business, believes we

should get things in perspective. He says: ’This thing about circulation

falling below the so-called psychological barrier of 400,000 is

daft.



Only inexperienced media buyers will be taken in by that. These are

August figures and that is not the best period on which to judge the

performance of a newspaper. In any case, the new team under Alton hasn’t

been in place long enough. I don’t think you should be surprised to see

circulation rise significantly above 400,000 in the next couple of

months.



’The future looks good and I certainly believe Alton can bring to the

Observer the sort of magic he has brought to the Guardian’s G2 and

Weekend sections. The thing it has going for it is its strong name. Once

they have a product they are comfortable with, they can really start

promoting it.’



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Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).