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.
