SCOTLAND: A MEDIA NATION AGAIN - Will the devolution vote and Scottish Media Group’s recent acquisitions force London agencies to treat Scotland as a separate market and offer Scottish-only campaigns? Nicole Dickenson reports

Few things are guaranteed to bring out a Scotsman’s nationalistic fervour more than the nation’s media. Just look at the way the English press have had to tartanise their newspapers - add Scottish or Scotland to the title and a bit of local news and you’re away.

Few things are guaranteed to bring out a Scotsman’s nationalistic

fervour more than the nation’s media. Just look at the way the English

press have had to tartanise their newspapers - add Scottish or Scotland

to the title and a bit of local news and you’re away.



The obsession with ethnically pure media north of the border helps to

explain the advertising community’s lack of concern about the

concentration of media power resulting from the recent purchase by

Scottish Media Group, the owner of Scottish TV, of Caledonian Newspapers

and then Grampian.



The fact that SMG and the Mirror Group, which holds a significant 20 per

cent shareholding in SMG, now own all the major Scottish media bar those

in the hands of Scotsman Publications and Scottish Radio Holdings has

barely caused a raised eyebrow - just the odd Scottish politician

warning about the need for Grampian to keep its regional

distinctiveness.



The prevailing view seems to be that it’s more important STV and

Grampian remain in Scottish hands and protected from English predators

(although their union does not mean a takeover has been ruled out, given

that 40 per cent of SMG is held by two companies: Mirror Group and

Flextech).



The Morgan Partnership’s chairman, John Morgan, sums up the advertising

fraternity’s view of SMG’s expansion. ’All the companies involved fit

together well. I don’t see any problems, rather an overall increase in

quality as a result of common resources and increased investment,’ he

comments.



Media directors also point out that Grampian and Scottish TV combined

enjoy less of a monopoly than STV did ten years ago. September figures

for all adult impacts gave STV and Grampian a combined 57 per cent share

of viewing, 19 per cent for Channel 4, 7 per cent for Channel 5 and 17

per cent for cable and satellite.



The strength of satellite TV and Channel 4 in Scotland is a big factor

behind STV’s push for greater independence from the ITV network. Donald

Emslie, commercial director of STV, says: ’We campaign for scheduling

sovereignty within ITV because we have to be able to schedule against

the local competition. The competition from Channel 4 in Scotland is

much stronger than it is for a region such as, say, Meridian.’



The only element of real concern to advertisers is the Mirror Group

shareholding.



Although its chief executive, David Montgomery, has a seat on the SMG

board, the Mirror Group’s involvement is kept at arm’s length. If this

were to change, and the Mirror Group’s best-selling Scottish tabloids,

the Daily Record and Sunday Mail, were included in some sort of SMG

package, then the concentration of media ownership would be deemed

excessive.



Agencies have looked for signs that SMG may try to abuse its position of

power by conditional selling and are at pains to stress it won’t

happen.



’SMG is taking a pragmatic, long-term view of the market. It is not in

its interest to inflate rates artificially in the short term,’ Giles

Brooksbank, a director and partner of Feather Brooksbank, says. In any

case, Emslie, regarded as a man of integrity, would not stoop so

low.



Christine Tulloch, media director of Faulds Advertising, also views the

SMG expansion as a positive development rather than a potential

problem.



’I can’t see a situation where SMG would resort to conditional selling

or apply punitive rates if an advertiser didn’t use both press and

TV.



And even if it did, we could walk away from a deal. It doesn’t have a

monopoly in the press or TV market, unless you want to buy just ITV. It

has good numbers, but through fragmentation we can make up most of those

numbers because Channel 4 and Channel 5 are stronger in Scotland than

other regions and we have a strong radio and press market,’ she

says.



Rather Tulloch sees benefits from being able to buy across the entire

SMG portfolio of STV; Grampian; the morning and evening broadsheets, the

Herald and Evening Times; magazines from the Home Show Magazine to the

Great Outdoors; and its satellite TV joint venture with BSkyB, Sky

Scottish.



SMG has just put the finishing touches to its package of cross-media

advertising and sponsorship as well as the reorganisation of its sales

operation. As part of the restructuring, it has split the Scottish and

UK sales operation. Sales of STV and Grampian in Scotland will be the

direct responsibility of SMG, while TSMS will continue to handle the

rest of the UK for another five years.



SMG has also rationalised its sales operation, Television Sales

Scotland, bringing the three sales offices under one roof. Before TSS

sold the TSMS portfolio, but it will now sell just Grampian and STV

direct to clients. The change will allow the TSS sales team to work

closely with the sales team at the Herald and Evening Times on

cross-media projects. TSS has also set up a commercial operation in

London.



A few SMG clients have already bought across both TV and print,

including the Bank of Scotland and the Royal Horticultural Society, but

only on an ad hoc basis. Emslie is gearing up for a more concerted

effort and is confident the package will prove attractive. ’The people

who read our papers and magazines and watch satellite TV all watch STV

and Grampian, so we have the perfect opportunity to cross-link and

cross-promote. Compare that to News International where not all of its

readers are able to watch Sky,’ he says.



Although the Herald, a quality broadsheet, and STV, a populist

mainstream TV channel, are two distinct markets, Emslie says STV has

introduced programme strands that ’reflect where people spend money’

including travel, home interest, cars, fashion and home entertainment,

as a way of making the cross-media advertising package more

attractive.



But agencies predict a slow response to SMG’s cross-media sell. ’It

won’t set the heather alight straightaway. It will take time to gather

momentum because of the nature of clients’ portfolios. SMG will need

actively to sell the proposition and energise the advertising community

about the whole concept, but there will eventually be a bandwagon

effect. It will probably appeal more to the indigenous Scottish

marketplace than UK English-based companies,’ Brooksbank says, adding

that it may be a useful route to introducing Scottish press-only

advertisers to television.



Caroline McGrath, director of the Media Shop, agrees that SMG will have

its work cut out. ’Agencies will tear the package apart to see if it

offers good value. It may be more appealing to direct advertisers who

will see SMG offering a more ’balanced’ media mix. Commercially, it

makes sense, but it doesn’t mean advertisers will buy into it,’ she

warns.



Whatever the success or otherwise of the new sales policy, SMG is well

placed come devolution. The SMG chairman, Gus Macdonald, always skilful

at playing the tartan card (he saw off the threat of an investigation

into the takeover of Grampian by the Monopolies and Mergers Commission),

is stealthily building up a North British Celtic media empire. In August

SMG acquired an 18.2 per cent stake in Ulster TV and speculation is

intense that it will launch a complete takeover next year.



While it is too early to predict the precise effects of devolution on

the Scottish media market, it is likely to heighten investor interest

which has already been on the increase - just look at the millions

poured into Scotland by the Mirror Group, News International, Associated

Newspapers and Express Newspapers over the past few years.



Devolution will also intensify demands for London-based agencies to

treat Scotland as a separate market, rather than some distant region of

the UK, and take account of the significant cultural and social

differences between the English and Scottish consumer.



There are signs that London agencies have already begun to reappraise

the Scottish market in light of the devolution vote and Scottish

publishers are encouraging this. ’Both the Scotsman and the Herald are

starting to promote themselves much more actively as an essential part

of Scottish schedules and hope that London-based national agencies will

start thinking of Scotland as a separate country in terms of media. One

of the great disadvantages of schedules emanating from London agencies

is the token Scottish title for national campaigns and the assumption

that the Scottish circulation of an English title is enough,’ Steve

Mills, managing director of William Atkinson Mills, says.



Scotsman Publications, which owns the Scotsman, Scotland on Sunday,

Edinburgh Evening News and the European, has beefed up its sales force

in London to 13 and the take from London has increased by 50 per cent

since it was acquired by the Scottish-born reclusives, the Barclay

brothers, two years ago. The main daily and Sunday titles have undergone

a significant transformation.



The chief executive of Scotsman Publications, Bert Hardy - Rupert

Murdoch’s former right-hand man - is credited with putting in stronger

sales and management organisations and turning the company around.



In October last year, Andrew Neil, the former Sunday Times editor, was

appointed editor-in-chief across the four Scotsman titles.



The quality broadsheet, Scotland on Sunday, has gone head-to-head with

Sunday Times Scotland. It even looks like a more compact version of the

Sunday Times with its five new sections - news, business, sport,

appointments and the relaunched Spectrum magazine.



Scotland on Sunday resorted to dropping its price from 75p to 50p in the

summer of 1996. The tactic worked immediately with an 11.6 per cent

increase in average circulation in the second half of 1996. Sales have

since fallen slightly, but are still up 10.7 per cent year on year,

according to latest ABC figures. Sunday Times Scotland responded by

cutting its cover price, but has since reverted to pounds 1, presumably

banking that consumers will still find its 12 sections value for

money.



Changes at the Scotsman are subtle. Hardy says: ’It now has a much

stronger set of views and reacts much more quickly to breaking news.’

Circulation was up 2.2 per cent in the first half of 1997 compared with

the second half of 1996.



Hardy will not be drawn on future plans, professing to be pleased with

the fruits of his labours so far. He is sanguine about SMG’s expanded

media empire and moves to sell across its portfolio.



’I don’t consider it a threat - just another piece of competition,’ he

says.



Hardy is keen to point out that his company has ended the former ad

sales team’s policy of coercing advertisers into buying both the

Scotsman and Scotland on Sunday - a policy that was not popular with ad

agencies. The one-stop shop is still on offer to clients that are

interested, but in the main the titles are sold separately.



The rivalry between the Scotsman and Herald has never been keener. SMG’s

involvement has undeniably invigorated the Herald. After extensive

research, the layout was redesigned to give the paper a fresher look, a

new sports edition was introduced and the Weekend Herald was relaunched

as the Herald magazine in September. Unfortunately for SMG, the new

magazine came out just days after Scotland on Sunday’s new Spectrum

magazine, which weakened the impact.



The Herald’s circulation continued to fall in the first half of 1997,

but the readership was up 1 per cent. The real test will be the release

of the second half 1997 ABC figures when the impact of the past few

month’s editorial changes and promotion on STV will become clear.



Most media directors welcome the changes at both SMG titles, but some

feel more needs to be done. Rumours that the Herald will undergo a name

change to get away from its Glasgow roots and project a more national

image to help ad sales have resurfaced. The sales team has been beefed

up and SMG will shortly be the first Scottish publisher to employ brand

managers for its titles.



McGrath wonders whether SMG will launch a Sunday newspaper and predicts

that devolution may trigger the sort of tartanisation of Sunday titles

that happened with the Daily Express, the Daily Mail and the Mirror.



Concentration of media ownership is just as strong in the radio sector

where Scottish Radio Holdings dominates and Independent Radio Group

tries hard to compete. SRH owns Radio Clyde, the leading commercial

radio station in Scotland and one of the most successful radio stations

in the UK, as well as several others. Its policy of appointing a

dedicated account manager who sells the group of radio stations to

agencies has been welcomed.



IRG bought the Radio Clyde rival, Scot FM, in 1995, but still needs to

improve the quality of the product and build a clear brand identity.



Radio takes a bigger share of adspend in Scotland than most of the UK

and has benefited from the high TV inflation of the past 18 months.



A monopoly situation also afflicts outdoor and the problem is lack of

availability. The UK bus contractor, TDI, has the market sewn up and is

a law unto itself. It has recently been pushing up its rates and has

irritated Scottish advertisers by giving priority to national

clients.



In contrast, England’s big three contractors - Mills & Allen, Maiden

Outdoor and More Group - are looking to follow Adshel’s lead and offer

separate packages for Scottish-only campaigns. The demand exists: with

TV rates spiralling upwards, outdoor is an obvious alternative to

broadcast.



Outdoor is evidently the one medium in Scotland where the English have

been able to dominate the canny Scots.



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