Media Forum: Can advertisers keep faith in red-tops?

With many titles losing readers, can the tabloids command the same rates from media agencies? Ian Darby reports. You couldn't get any more British. Last week was National Cleavage Week in The Sun, an excuse to plaster even more lovelies on page three, lift spirits during the floods and hopefully add a few sales.

And it looks like The Sun needs it. Its recent circulation has been less than perky, with the July sales figures showing a 4 per cent year-on-year fall to 3.3 million. Its bitter rival the Daily Mirror was down 7 per cent year on year in July to 1.8 million sales.

This was not just a blip. The Sun is consistently down on year-on-year comparisons by close to 5 per cent each month. The Mirror is losing around 15,000 readers every month.

Even growth at the soaring Daily Star slowed to below 1 per cent in July.

And the Sunday market is not immune, with both the News of the World and The Sunday Mirror down year on year.

But is this decline an inevitable long-term process or can the publishers halt it? And what effect is it having on advertisers' confidence in the titles and the commercial health of red-tops?

Jane Wolfson, the non-broadcast director at Initiative, puts the sales declines down to general factors as well as increased competition: "There is a general downward trend in newspapers, the success of Metro can't have helped and we are looking closely at the men's weeklies, which could have an impact on sales if they're selling two million copies a month."

Some believe the red-tops, with the exception of the Star, are not as good at producing the irreverent, cheeky content that reached its peak under Kelvin MacKenzie at The Sun. But a focus on serious news is not an option. Wolfson says: "I do not think they talk about real news any more, they're much more gossip-focused. If they had gone more newsy there would be even more of a problem. Iraq showed us this, with readers going online for their serious news."

Wolfson is convinced agencies are not going to take the declines lying down. "We can't continue to pay more for less," she concludes.

Ian Clark, the director of advertising at News Group Newspapers, argues that it's hard to compare year-on-year circulation figures because The Sun had cut its cover price to 20p in early 2003: "The monthly circulations yo-yo as you would expect and The Sun's six-monthly figure includes four months from the previous year when cover price was reduced. Readership is a better barometer for advertisers and the latest figures show virtually no change."

Clark argues that News Group's titles have responded to circulation issues by improving products. He says: "The product investment, in a bigger and better Sun TV magazine, plus a new 16-page motors section, shows our commitment to readers and advertisers."

And there is every sign that News Group will continue to be bullish in negotiations. "Demand is such that the Bank Holiday News of the World is shut and we are at our maximum pagination. We have never shut a paper to advertisers a week early before and that's an indication of the demand in the marketplace. Come October and November, when the market is traditionally even busier, we will have difficulty accommodating all advertisers," Clark says.

But Mark Gallagher, the head of press at Manning Gottlieb OMD, agrees with Wolfson that the declines are a major concern: "With circulations steadily declining, the cost per thousand to reach an audience obviously increases. We have only seen blips of increases for the tabloids in recent years - when The Sun dropped its cover price to match the Mirror and then for the Mirror when it ran the Paul Burrell story. Short-term factors, such as price cuts and big scoops, will only do so much to improve things."

Gallagher believes that product innovation is a must for the red-tops and they could go further than tinkering with TV supplements to look more fundamentally at format and content.

He sees the Sunday tabloid market as an area for experimentation: "The Mirror Group Sunday titles are taking a battering; I don't see a strategy for them. The People's full-rate sales are down 25 per cent over two years, so this could be a test bed for a new format."

Steve Goodman, the group press director at MediaCom, says that in 1989, the red-top market totalled 18 million copies. It is now around 12.9 million, but Goodman concludes that publishers can claw back sales. "The products need to evolve. I'd like to see more use of colour and more interactivity. They need to make more use of other media rather than operating as standalone media. I'm convinced we'll see them in different formats."

- "This is a big concern for us. The tabloids have been bullish on rates, The Sun especially when it hiked its rates last year on the back of a small sales increase. It's going to be interesting to see what happens when contracts come up for renewal." - Jane Wolfson non-broadcast director, Initiative

- "It has been our best year in ten years. We expect agencies to play pretty tough but we are turning money away so we will eventually be able to say to them that somebody will always be willing to pay more." - Ian Clark director of advertising, News Group Newspapers

- "The model around the world for newspapers will be about product innovation. This has helped the quality titles but there's not much coming from the red-tops. The Star is the most likely to do something because it has less to lose." - Mark Gallagher press director, Manning Gottlieb OMD

- "Some of the demand has slipped away but there are ways they could move on. A big issue is distribution. If you go into a newsagent you see a big mess of newspapers on the floor below racks of glossy magazines. That's no way to promote a product." - Steve Goodman group press director, MediaCom.