The latest six-month Audit Bureau of Circulation figures show national newspapers circulating more than 11 million copies every single day of the week, and that figure doesn't include Metro or any of the other free titles. Meanwhile, the latest Advertising Association revenue projections suggest that display revenue alone for the nationals will be around £1,520 million next year - almost nine times the total ad revenue for cinema, almost four times that for radio, and about twice that for consumer magazines. I'm not making these points to diminish the importance of these other media, but merely to flag up that, whatever the difficulties the national press may face, I am certainly not about to write its obituary.
National press does face a difficult 12 months. Competition from newer media has been a harsh reality for the press for some time and would probably have pushed newspapers' overall revenue down in 2009 even without a recession. As it is I think the drop in revenue is likely to be far greater than the AA projections suggest, and may well reach double digits. But newspapers' ability to control their available inventory through reduced paginations means that average prices are unlikely to fall to the same extent as revenue, although the downward pressure on yields will be considerable. Certainly the national press can no longer take its share of any client's budget for granted.
Just how hard the recession hits daily titles may well depend directly on the advertising strategies that retailers adopt over the next year or so. Retail has been the biggest-spending sector in the national press for some time now, AC Nielsen data suggesting that around £1 in every £4 spent in national press display comes from this sector. At the moment, many daily titles are seeing a mini boom in retail spending and seem optimistic that it may continue well into this year. Let's hope so.
But publishers have not been sitting on their hands. Huge investments in new colour presses that allow 100 per cent colour products will help to maintain yields for some titles, while several titles have also pushed up their coverprices over recent months as an obvious means of compensating for lost ad revenue. In this context, the Daily Star's recent price cut seems unlikely to spark another price war.
Potentially, the most significant recent changes have been in the sales structure of two of the biggest players, with both News International and Associated Newspapers now adopting at least some degree of selling across their portfolios. Two sales points representing roughly 40 per cent or more of the market's total display revenue will no doubt be a scary prospect to some. My own view is that it is an understandable and reasonable attempt to reduce their overheads at a time when margins are being squeezed.
I hope these moves also signal a move away from a focus purely on competitors. The national press has become less inwardly focused since the formation of the Newspaper Marketing Agency, but share versus competitive titles is still too prominent a part of negotiations with sales staff. Better that publishers should be fighting for newspapers' share of overall marketing budgets than that they end up squabbling about their individual share of a consequently diminished cake.
By continuing to invest significantly in online and mobile brand extensions, newspapers are better placed to compete with other media. Latest research from the NMA shows that the combined unique monthly users of national newspaper sites now exceed 94 million worldwide, with more than 35 million in the UK. How much revenue publishers are realising from these sources is still unclear, but more clients are investing in these cross-platform opportunities.
And, as both creative use of online and newspapers' ability to drive revenue through online channels continue to evolve, I expect to see greater numbers of clients investing in these brand extensions. In the longer term, new technology may come to the rescue of newspaper revenue streams. There is debate about how best to monetise new delivery platforms, and it doesn't seem as if any single model has emerged. But new portable devices such as the Sony Reader must offer huge potential for publishers to deliver their products electronically and directly into their readers' hands. The commercial opportunities could revolutionise the economics of print publishing, with the potential to deliver content tailored to the individual reader on a subscription basis.
Whatever the newspapers of the future look like and however they are delivered to the audience, one factor will remain critical to their success: content. Editorial content has been evolving for some time as publishers have sought different ways of appealing to an increasingly time-poor audience, for whom 24-hour news channels and online updates have at least partially supplanted newsprint. Many of the redesigns and revamps we saw in 2008 were as much about organising and rationalising content as about appearance and presentation. Surveys continually reaffirm national newspapers as among the most trusted sources of news and information and, by implication, the most trusted channel for advertising. The sheer volume and range of information, news and entertainment available to consumers is unprecedented. Occupying a position as an authoritative and trusted information source within this deluge of material is no bad place to be, especially at a time when client budgets will have to work ever harder and deliver ever more demonstrable returns.
Any medium that continues to deliver big audiences with short deadlines has a strong case at any time, but especially when advertisers face tough challenges themselves in terms of sales, ROI and the real bottom line. Yes, 2009 is going to be tough for national newspapers and not all of them may survive. But big and loyal audiences, strong brand values and trusted content will always earn a place on most clients' schedules, whether online or off. So here's to 2009 and to the future of newspapers.
- Dominic Williams is the press director at Carat.