Newsbrands: one step forward, two back

07 Aug 2017  |  Dominic Mills 
Newsbrands: one step forward, two back

Publishers are rapidly giving up on ways to fight back against the duopoly, writes Dominic Mills - but there is still a chance for them to ramp up their share of ad revenue

Oh dear, at the risk of coming on like an August miserabilist, I’m having a thing about newsbrands: every time there’s a piece of good news, there’s at least two to counter it.

Let me start by asking this question: if P&G is taking more than $100m out of its digital ad spend budgets - the vast bulk, by definition from Facebook and Google - on the grounds of a) brand safety and b) effectiveness, why the hell isn’t it putting that money into, say, newsbrands, where both those concerns can easily be allayed?

After all, would brand safety be an issue with a newsbrand? Not likely. And what might cause ineffectiveness? Could it be that the ad has run on a crap website in a poor or unsympathetic environment? That probably wouldn’t happen on a newsbrand or any premium publisher.

Nevertheless I can’t share the optimism of my fellow columnist Ray Snoddy, or that of Johnston Press boss Ashley Highfield who is hoping that something (i.e. Google and Facebook) will turn up and bail out newsapers, aka the cross-your-fingers-and-whistle-in-the-dark strategy.

So, reading the tea-leaves of results announced by various publishers last week, what do we have? Some causes for cheer, but not many.

Hooray - the i, acquired last year by Johnston Press, seems to be motoring, so much so that the publisher is planning to invest in its Saturday edition off the back of a 28% increase in revenue and 42% in profit.

Hooray, digital revenues at three major newsbrand owners to report trading updates last week continue to rise - up 18 % at Trinity Mirror, 27% at DMGT and 15% at Johnston, and 15% - although this includes membership/donations revenue - at the Guardian.

And hooray, if hard-pressed publishers can take any cues from across the Atlantic, the New York Times last week said both digital revenues (up 23%) and paywall revenues (up 46%) rose in Q2.

Print advertising revenue, of course, fell (by 11%) but the combined digital and print ad take at the NYT rose by 1%, bucking the industry trend. Not bad, and UK publishers better hope some of that momentum translates across here.

Against that, we have Tindle closing seven north London newspapers overnight. When Tindle, which has a deserved reputation for spinning gold from the bricks of local news, does something like this, you’ve got to be worried.

And closer study of the results of DMGT and Trinity just ramps up the worry. At DMGT print fell by 9%, and the upturn in digital revenue, while it sounds terrific, amounts to just £6m, hardly enough to cover Lord Rothermere’s expense account. Similarly at Trinity Mirror, where the print decrease was 21%.

So, the question is: what on earth do newsbrands have to do to ramp up their share of ad revenue - print would be nice, but really digital is the area to focus on - fast enough to stave off impending wipe-out?

It seems odd therefore that some newsbrands have concluded that the way to defeat the enemy is not to co-operate but to carry on as before.

I’m referring to the gradual withdrawal, one by one, of various publishers from Project Juno/Rio (whatever), the plan cooked up 18 months ago to pool ad sales.

With only the Guardian and, ironically, its one-time sworn enemy News UK left, Project ‘Meh’ looks dead in the water.

Bang go two ways to fight back against the duopoly - one by maximising scale, and two by making it a one-click buy (well, almost). This is a shame. I really thought it could make a difference.

That leaves newsbrands with a few cards to play - but not many. One is clearly brand safety, although I expect that to diminish in importance as the duopoly get their act together.

The other, for want of better terminology, is context or environment. I think this is one area where everyone instinctively feels premium publishers - not just newsbrands - have, if not an ace, at least some court cards.

It’s just that no-one really knows how to quantify the difference it makes, and therefore how to sell and price it.

So thank goodness Newsworks has stepped into the breach, teaming up with GroupM to demonstrate that a quality environment produces a better result. A test project over five campaigns is now to going to be rolled out over 50.

I won’t go into the detail here, but as part of its proof-of-concept test, GroupM tagged 30m impressions so it could measure both engagement and brand responses across exposed and non-exposed groups.

At this point I should say that we should applaud both GroupM and Newsworks for initiating the project. It’s the kind of thing a buyer could easily pass on; after all, it might not be in its interests to prove that quality contexts work better. And Newsworks deserves a plug for doing something that would actually benefit all premium publishers, not just newsbrands.

Anyway, GroupM says the quality inventory in the test achieved better results than that bought via open exchange inventory, but not by how much.

If you want to see Vanessa Clifford of Newsworks in conversation with Group M’s Robin O’Neill, go here and to the fourth video down.

Phew. I would be confident that the results will translate across the wider test, but the question then is whether clients - if they care, that is - can be persuaded that it is worth paying a premium for a quality, known environment.

If they can, there’s hope: indeed, this might be one giant leap forward for newsbrands. Ultimately, it may not be the silver bullet that saves them, but it could help accelerate digital revenues such that that there’s still something left when print runs out.

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NickDrew, CEO, Fuse Insights on 9 Aug 2017
“"So thank goodness Newsworks has stepped into the breach, teaming up with GroupM to demonstrate that a quality environment produces a better result"
What's new here? Publishers from the FT to Yahoo and beyond, have been developing this kind of research for years, demonstrating the importance of quality environment for ads. At Yahoo we used a range of approaches across markets to show exactly why environment matters, and generated successful research off the back of it.
But the problem here is not proof, it's relevance. Brands are buying ads on Google and Facebook because they're impressed by big reach numbers, and because they think like consumers when planning campaigns (as in, I know lots of people who use those sites/ I think they're very relevant to me, therefore my ads should be there). And, of course, Google and FB quickly twigged that ad sales success is easier when they cut the agencies out of the loop and go direct to the clients, so that the CEO/ CMO can tell the agency they want their ads on Facebook.
These are systemic problems, and news brands continuing to push the same, staid story about quality of environment is not wrong, but it's not going to change the market.”

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