A view from Gideon Spanier

News publishers must hold their noses and unite

The advertising crisis facing news journalism is finally making publishers think the unthinkable and consider collaborating on ad sales.

Alarm bells are ringing after a wave of job cuts at Telegraph Media Group, The Guardian and Vice, and a print revenue slump of 15% across the industry this year.

Campaign revealed last week that publishers, led by Trinity Mirror, are talking. Forming a joint venture or setting up a new company to pool ad sales are just two possibilities. However, there are huge obstacles in an industry full of egos. Most sales directors and chief revenues officers hate the idea of outsourcing their advertising to a rival. Several newspaper ad chiefs talk about "turkeys voting for Christmas". 

But, to use a different analogy, news publishers are fighting over a pie that keeps getting smaller and their reluctance to share is harming the industry.

TV and radio are examples of where consolidation of sales houses has led to fewer, stronger players sharing a growing pie. Newspaper groups don’t even have to seek alliances with each other. Imagine if, say, News UK teamed up with Sky – even if there are political reasons why that might be difficult.

What is clear is that many news publishers have made bad strategic mistakes. Relying on advertising and social media platforms to fund their digital ambitions and eschewing paywalls has proved costly.

The rhetoric about online is turning hostile amid a climate of doubt about ad-blocking, online fraud, viewability and ability to build brand fame. ITV, Sky and Pamco, the print measurement body, were among those suggesting there may be limits to the "online gold rush" at the Media360 conference.

Some publishers are angrier in private, accusing media agencies of shifting money out of newspapers and other traditional channels and into digital to make better margins and receive bigger rebates. "The idea that media planning is channel-neutral is a joke," one media owner says.

The suggestion that agency trading desks are buying chunks of online inventory and then reselling it to clients at undisclosed mark-ups is not new. But some insiders claim agencies are making up to 50% on inventory from some of the small, less savoury online vendors.

It’s a live issue when the Association of National Advertisers in the US is publishing its long-awaited report into media agency transparency that is expected to have ramifications in the UK. But solving transparency problems is another story.

News publishers need to help themselves by working together.