The figures are available and transparent but Gordon Patterson gives insight to the trends hidden behind the numbers in a story first published in The Media magazine.
1. If I look at significant trends coming through in the latest ABC data, the first one is the tendency by publishers who are not printers, to generally do well. Their focus is on financial well-being. Whereas the primary concern of printers who are also publishers is that of ensuring the profitability of the press. This, over time, will become an even more significant factor. I wouldn’t be surprised if in the years ahead, we see printers becoming just printers and publishers and publishing groups moving towards outsourcing printing to the best and lowest-priced supplier.
2. Across the board, we’re seeing a decline in subscriptions. This could either be the result of delivery issues with the Post Office or because readers prefer more choice and do not want to be tied into a relationship with one particular title. The latter could also mean that somewhere along the line, the trust between the title and the reader has been broken down or weakened and needs to be rebuilt. This breakdown of trust could be caused by the reader seeing the title as a generic offering, the offering is perceived as a disappointing read, or that it has been inconsistent, alongside increased competition from local and international offerings, stealing their share of mind. Either way, subscriptions are under enormous pressure.
3. With the growth of foreign titles in the market, we tend to be have a myopic view of print we only measure the print platform across local titles. This should be an immense concern for local print and sales organisations. In years gone by, I would read 10 titles in any given month, with eight being local and the other two international.
Today it is literally the opposite. There has been a reversal of brand loyalty, coupled by the fact that local titles are not cheap anymore.
Several well-known titles have, on average, started selling copies at less than 50% of the cover price. From an industry perspective, the consequence of this sort of trading may not be immediately obvious. However, it opens up the door to free circulation and dumping. The danger with growth in copy distribution at less 50% of the cover price is that these copies can literally be given away for free, but still added to the circulation figures. In other words, a title that is willing to deceive advertisers could in theory distribute copies for free then group these with distribution sold at, for example, 40% of the cover price. They could then still accumulate the total distribution into their ABC circulation total under the circulation ‘sold’ at less than 50% of the cover price. Only morality and concern for doing the right thing would stop publications from this sort of bulking.
As the economy improves and magazines and newspaper egos start flexing, we’ll see more use of this sort of distribution raising its ugly head. Marketers need to be wide awake to the existence of this situation. Fortunately the Advertising Media Forum (AMF) created the core circulation currency, which only values single copy sales, subscriptions and digital sales as critical currency to measure and compare. This approach definitely cuts to the chase and is the acid test of the health of a publication.
4. We need to be more focused on the future benefit of a print title. Publications with declining circulation deliver less in time. Hence discounts offered become meaningless. Discounts and added value need to be seen in light of which direction the title is going. This requires study. Statistically speaking, you need a minimum of three reference points to establish a clear direction. In the interest of marketers and advertisers, before negotiating advertising with a title, establish which way the title is heading before you commit. Publishers have accepted being tarred with the same brush as the entire industry. However, going forward, prospering titles need to make extraordinary adjustments to their rates in order to grow in the right direction.
The risk with adopting a rate-performance approach is that when circulations decline, so do the rates, taking income along with the fall.
5. Another interesting trend to note is that publishers and sales organisations seem to have lost the art of selling. This is perhaps as a result of changing of the guard within an organisation, but somehow sales teams seem to have lost the basic skills. Sales forces need to look at other excelling platforms and determine what they are doing to successfully promote their own offering. As an example, I recently received a proposal from a media owner, compiled in Excel, presenting absolutely nothing compelling, no strong argument and no contextualisation of the offer on hand. More and more we’re seeing examples such as this without any sales effort or skill in drafting the proposition. This is then made worse by zero insight into what the customer is looking for and a lack in compelling reasons to advertise. If titles don’t sell their space effectively, they are inclined to rely on discounts to do the job. However discounts are expensive and somebody is paying for them somewhere along the line. In most cases, it’s the media owner. Beyond discounts being used to mask poor selling expertise, this behaviour also drives inflation for the entire industry.
Looking ahead I believe that print needs to lean into the future and be more confident with regard to where it’s going and why. Discounting advertising space won’t buy print media owners a future, but effective selling will. From a publication perspective, it is crucial to continue understanding what readers want because a model built on consumer insights will buttress circulation and an understanding of what advertisers want will build sales and income for the publisher. Those publishers who are also printers need to become more single-minded and decide where their focus should be.
My advice is for publishers to protect their relationship with their readers, stay relevant and always strive to be transparent.