Fake news and Brexit put news brands in peril
A view from Chris Walsh

Fake news and Brexit put news brands in peril

If the path facing news brands wasn't already perilous enough, further stumbling blocks in the form of Brexit and fake news have arisen.

News brands suffered a bloodbath in 2016. They have faced a relentless decline in print circulations and a struggle to monetise their online revenues for years.

But, more recently, new challenges have popped up. Ad-blocking, programmatic with its focus on performance and the dominance of Facebook and Google, which now take 53% of all display adspend, are making it ever-more difficult for news brands.

All of that is before you consider the wider macroeconomic situation in the wake of Brexit, so it does not exactly set a rosy outlook for the year ahead.

However, I am a glass half-full guy and there are a lot of positives that can be taken from 2016.

First, when it comes to audience size, news brands have never been in such rude health and that will continue. They will carry on growing as traffic is driven to them from multiple channels. 

"One of the attractions of news brands is that they are an engaging, trusted medium – and that matters to advertisers when there is so much concern about viewability and fraudulent impressions"

Social platforms such as Facebook have been a big source of traffic but, as we enter a new year, a lot of news brands are seeing a shift with substantial growth in Apple News, even though the product is still in early development.

If Apple’s data can be utilised by news brands, it could make it a very interesting proposition in the future. The rise of other new players such as Snapchat offers further opportunities for news brands to increase their audiences.

The great problem has been that digital growth in the past few years has not offset print decline and we should not expect to see that change in 2017. However, I do believe we will see the decline ease.

Second, news brands are doing a better job of proving their effectiveness after years of struggling to offer meaningful evidence to advertisers.

Newsworks’ analysis of 500 econo-metric studies has shown that advertising with news brands can massively boost ROI, can lift a wide range of brand metrics and has a multiplier effect when used in conjunction with other media.

A key finding of Newsworks’ research was that the industry-wide decline in advertising spend over recent years has been too severe and that it should still be at 2013 levels.

Advertisers have taken notice. While certain categories may look to reduce spend in 2017, other brands will begin to come back and we are starting to see a recalibration in some sectors, notably retail.

The work that Pamco, the Publishers Audience Measurement Company, is doing to improve audience measurement would have been a great help in 2017, but the introduction of new standards has now been delayed until the end of the year or early 2018.

The more pressing question for advertisers is: will UK publishers consolidate their ad sales in 2017?

Whatever happens, we should expect to see a lot more collaboration. There must be a joined-up approach to tackling the challenges that all news brands face, rather than the historical tendency to battle each other.

2016 sadly saw The Independent shut its print edition after 30 years, although it seems to be flourishing as a truly online business. We have seen that The Huffington Post operates brilliantly as an online model but I am optimistic that none of the other print titles will close in 2017.

For many publishers, print is what still keeps the lights on and any publisher contemplating switching off the presses has to be very confident that it can make the numbers work as an online-only business.

We will see more news brands taking risks, trying new things, diversifying revenue streams and, yes, some might not work. Trinity Mirror’s launch of The New Day is a prime example, but it should be applauded for at least trying to create a new product.

Publishers will also look at new ways to drive subscription and other revenue beyond advertising.

After News UK took down The Sun’s paywall at the end of 2015, The Times remains the only "hard" paywall still in place. But many news brands are trying different monetisation models. The Telegraph used to offer a limited number of free articles per month but has launched a new service, Telegraph Premium, making most online news free but giving exclusive content to people willing to pay for it. The Guardian is asking for donations as part of its reader membership scheme. We can expect to see many other models tried and tested.

One of the enduring attractions of news brands is that they are an engaging, trusted medium – and that matters to advertisers when there is so much concern about viewability and fraudulent impressions.

The value of quality content is beginning to shine, particularly in the programmatic marketplace, which has grown hugely in the past few years.

Advertisers’ attitudes are changing as they recognise that an impression on a quality news brand site should have a greater value than an impression on, say, ilovecows.com. Add to that the changes to programmatic through header bidding and news brands should see yields and volume increase.

Finally, this leads us on to the worrying issue of fake news, which took off during the Brexit vote and the US presidential election and is likely to be a continuing challenge when Donald Trump takes office.

Facebook has responded to criticism by making it easier for users to flag fake news, but everyone in the media industry has a responsibility to support trusted news brands.

Ensuring journalists can report the news accurately and express an informed opinion has never been more important at what feels like a pivotal time for the future of the UK, the US and the wider world.

News brands’ content has never been so appealing – another reason why we will see audiences increase further in the year ahead.

Chris Walsh is the head of investment at PHD