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National newspaper revenues bounce back but there are more challenges ahead

05 Oct 2010  |  Liz Jaques 
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National newspaper revenues have bounced back more than other print media so far this year due to stronger support in aggregate from agencies and brands as well as large and well targeted audiences, according to a new report by Enders Analysis.

The report claims that confidence is being helped by the newspaper industry's shift from per centimetre to a CPM model.  This could put pressure on some titles, although Enders expects the Times publisher News International and DMGT to grow their share of expenditure among national newspapers (which explains News International's enthusiasm to lead the change). The publisher's trading director Dominic Carter revealed details of a new trading model at MediaTel's Future of National Newspaper event last week.

However, Enders predicts more challenges for print media, especially considering consumer sentiment is on the decline and the VAT increase to 20% is likely to put pressure on retail sales in 2011, particularly on categories such as fashion and beauty.

National newspaper ad revenues have increased substantially over the last few years due to retail, helped by the increasing battle between the top supermarkets - they were around 12% five years ago and peaked with 17% in Q4 2009.

The supermarket brands have contributed a lot to national newspaper titles' growth and recovery in recent times, and although they are expected to grow their share over the next year or two, the report predicts that as retails sales decline, it will dent ad spend because most supermarkets now stock all retail categories.

Enders' report says that for most print media, the bounce back from the recession has been less emphatic than for any other screen-based media, particularly TV.  However, the medium has been subject to more structural change in the last five to 10 years, compared with other media.

Press accounted for nearly 50% of all UK ad spend in 2001, but has dropped down to a third of expenditure now.  The report claims there are a variety of reasons for this, including the migration to online for many advertisers; the pressure on local and regional newspaper advertising; the rise of cheaper mobile solutions; and SME advertisers disappearing from the market entirely.

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