REPORT ON WORLDWIDE ADVERTISING: Europe as one - Major European media owners are increasingly forging alliances to create more attractive advertising propositions, Robert Gray writes

In recent months, there has been much speculation about moves by the giant media conglomerates to forge alliances that will allow them to exploit digital television opportunities in Europe. Rupert Murdoch’s News Corporation, Silvio Berlusconi’s Mediaset and Leo Kirch’s Kirch Group are all understood to have held talks about co-operating on new ventures.

In recent months, there has been much speculation about moves by

the giant media conglomerates to forge alliances that will allow them to

exploit digital television opportunities in Europe. Rupert Murdoch’s

News Corporation, Silvio Berlusconi’s Mediaset and Leo Kirch’s Kirch

Group are all understood to have held talks about co-operating on new

ventures.



Pragmatism is one factor behind the talks, as by sharing the

considerable risk involved the conglomerates hope to avoid

over-extending themselves.



But these moves may also be seen as part of a wider trend towards

co-operation between media owners, in both the provision of editorial

content and the selling of advertising space.



’Currently, there are a lot more examples of media companies forming

alliances,’ MediaCom Europe’s director of international media, David

McMurtrie, says. ’But they tend to be more editorially and cost-led

rather than formed as a way to maximise advertising revenue.’



Nevertheless, some interesting partnerships have been created to boost

advertising revenue. An example is the national newspaper market in

France, a media sector that has found the going tough in recent years.

According to Le Monde’s vice-president of advertising, Gerard Morax:

’The national press has low penetration, reaching 42.8 per cent of all

newspaper readers in Paris.’



Fairly high page costs have been a barrier to entry for some advertisers

and the relatively fragmented nature of the marketplace - due to the

range of titles - has meant that the national press has struggled to

compete against television. Spending on print advertising in France

actually fell by 7 per cent between 1990 and 1996.



The gravity of the situation brought five newspaper publishers together

to discuss how they might generate more income through co-operation.



Although two publishers dropped out, the three others created Plein

Cadre, a marketing drive to offer advertisers space in three leading

titles - Le Monde, the financial newspaper, Les Echos, and the sports

daily, L’Equipe. The three titles have a combined circulation of about

900,000.



’With print media, the buying shops have a lot of publishers and

publications to deal with, so it’s hard for them to follow everything

that’s going on. So if we can make it easier for them it will help us,’

Le Monde Publicite’s deputy managing director, Jean-Christophe Demarta,

says.



The Plein Cadre proposition is a simple one: big, national advertisers

are offered insertions in each of the three titles to run on five

consecutive days. The aggregated readership is attractive to media

buyers who might otherwise dismiss the titles on an individual basis.

’We feel that it really is extra revenue being generated,’ Demarta

adds.



The success of Plein Cadre encouraged three other major French titles -

Le Figaro, Liberation and France’s other financial daily, La Tribune -

to co-operate and create a counter offer, Piment.



There are also two national newspaper advertising alliances in Belgium:

Scripta and Full Page. ’It helps the media buyer because all the

information is concentrated in one company,’ Scripta’s marketing

manager, Claude Surmont, explains. Between them, the publishers involved

in Scripta account for 44 per cent of the Belgian national daily

newspaper market and own titles such as De Standaard, La Libre Belgique

and Het Belang. Recently, Scripta and Full Page co-operated in a drive

to raise the profile of Belgium’s leading newspapers at a time when some

mass-market titles have been hit by circulation decline.



Chris Manning, regional managing director, Europe, for the sales house,

Publicitas Promotion Network, which acts internationally for newspapers

such as The Times, El Pais, and Suddeutsche Zeitung, thinks more

alliances will develop in Europe. He points to the success of a group of

11 family-owned newspapers in Latin America, which in 1991 banded

together to form an alliance, GDA.



As well as offering buyers a single point of contact for advertising to

ten million readers, the publishers participating in GDA also make cost

savings by sharing resources such as photo libraries. New features, such

as columns on Latin American issues and travel, have been created and

are shared across the titles. Manning says: ’There is more value to the

reader and new ad opportunities. Revenue related to GDA has increased

five-fold since 1996. Ad dollars are incremental and the trend is an

upward one.’



Alliances are not confined to print media sales. In July 1996, six major

German publishers, including Gruner + Jahr, set up a sales house, Online

Marketing Service, to represent the internet versions of their regional

newspaper titles. OMS aims to attract major advertisers by offering them

an aggregated national audience. There are now 24 shareholders in OMS,

who between them own 34 online regional newspapers.



In France and the UK, regional newspapers have banded together to sell

print advertising. Amra, for example, represents nearly 40 per cent of

the UK’s regional daily newspapers by circulation, including titles

owned by Trinity (which owns Amra), Midland News Association, Eastern

Counties Newspapers and Isle of Wight County Press as well as the

Manchester Evening News.



Co-operation is certainly welcomed by media buyers. McMurtrie says: ’It

obviously reflects what’s happening in media networks as well - fewer

buying points speaking to fewer selling points.’



Further alliances between European media owners are almost certain - the

intriguing question is, who will get into bed with whom?