It's time to wake up
Last week agencies and advertisers were warned their investment choices were creating a diminished media landscape in the UK. Here, Bob Wootton asks what it will take to avert disaster
Tess Alps' characteristically thoughtful piece published last week prompted me to return to these pages a little earlier than usual.
A few weeks ago, I posted a comment in reply to news that the national press publishers were mooting joint ad sales. Two months on, word is that the initiative is, if anything, gathering pace and seeking acceptance rather than dying from a thousand cuts.
The thoughts I shared briefly then seem to hold just as much water now, so in a bit more detail:
- Combining national newspaper ad sales is an interesting idea in adverse conditions, though it's not the first time it's been mooted by an explosively competitive group of peers.
Perhaps extreme circumstances (market pressures) demand a more extreme response, but it merits a cool, objective look at why the media owners might think this is good idea.
- First up and on the prettier side, it could lead to better, more coherent marketing to lure more brands to spend more in 'newsprint'. But isn't that what the well-funded Newsworks already does - and has incidentally done particularly well with its recent research and high-profile newsbrand (naturally) ads?
- Second, it could offer media agencies greater trading convenience. There are only three TV sales houses of scale, whereas agencies have to deal with eight or nine national newspaper sales points and their numerous staff repping complex products. (Multiple titles, supplements and inserts having been joined by online editions and all they bring).
However, advertisers, who pay their media agencies significant if perhaps diminished fees, aren't concerned about their convenience. Their own lives are seldom 'convenient'.
- And so finally to the dark side - trading leverage - clubbing together to harden rates. In competition circles, this is called collusion and price fixing and it's illegal.
Would the newspapers be powerful enough in concert to leverage the big media buyers, many of which have already tied themselves to pricing guarantees and calendar deals? And crucially, would they be powerful enough to scare them and their clients away from compiling a dossier for the Competition and Markets Authority's consideration. I doubt it.
Incidentally, the CMA is the very same regulator which recently accused the top five UK model agencies of collusion and price fixing.
Stephen Blake, the senior director of the watchdog's Cartels and Criminal Group, was reported to have said: "This is the first competition enforcement case we have taken in the creative industries, which are an important part of the economy. Veiled code for "media buying, we may come after you soon..." perhaps?
Back to the present, do any of the reasons above have any positive impact on newspapers' intrinsic appeal to advertisers and agencies? Since none would have much if any immediate bearing on their content and their audiences, I'd have to say no - though it might help ensure their survival.
Which leads me to consider some of Tess' comments.
I can't recall a time when greater leadership from the advertiser clients was needed"
I for one think she's quite right about the undue dominance of the big online players - most notably Google and Facebook - and the immense leverage they have acquired in the ad market. She touches on all the reasons: including global influence, top-tier lobbying, scale and margins which enable lavish entertaining and enhanced profitability for agencies.
Some of their behaviours are legendary - for example their readiness to take on whole governments.
That said, user-generated posts and videos are all very well and entertaining to a point, but the absence of substantive content of the kind our society relies on our news and broadcast media channels for leaves me wanting.
Then there's the issue of metrics. I spent two decades on the boards of all the UK's media audience research bodies. Each was different, but they all have the same two key issues in common:
- The first is the understandable tension between media owners, who always press (sic) for large audience numbers they can monetise, and advertisers and agencies, who acknowledge that sample-based research cannot deliver an absolute truth and so instead push for maximum rigour and thus credibility.
Thus the Joint Industry Currency model which, like democracy, is the 'least worst' model for resolving this tension.
- The second is money. As the media they measure are challenged by the new landscape, so the JIC's are all facing funding deficits, in some cases critical.
As audiences fragment, they become more difficult to measure. The only way to maintain rigour is to increase sample size, which is the most costly component of research. Worse, if you want to double the accuracy of research - or if you want to measure half-sized audiences as accurately as now - you have to quadruple the sample size.
That's expensive and it's money they're either loath, or simply don't have, to spend.
You would think the booming online media would be the exception, but in fact online spends by far the lowest proportion of revenue on UKOM, its audience data system. I and many others never managed to persuade them to invest more, because they simply didn't feel the need to.
So while I think Tess (and Guardian editor-in-chief Katharine Viner at the ISBA lunch) are absolutely right, I'm not so confident that right will prevail.
Will our leading advertisers finally pinch themselves and take a longer-term view, realising that if things continue thus then their successors won't have many 'proper' media through which to nourish their valuable long-lived brand assets?
Whether it's the sustainability of the media channels which brands depend upon, or the sustainability of a broken financial model, I can't recall a time when greater leadership from the advertiser clients was needed.
The US advertisers' body, the Association of National Advertisers, seems to be taking a more assertive stance in such areas, so hopefully it's only a matter of time before we follow suit.
- - - - -
Coda: Before we get too excited about a single press sales house, what ever happened to the (other) two main planks of the print media trade bodies' grand plan:
PATS - the Press Automated Trading System that links publishers and agencies to facilitate trade?; and
PAMCO - the successor to the National Readership Survey, whose key (only?) point of difference is its wider canvass of digital edition readership?
It's all gone rather quiet on both fronts. Perhaps that's because it's the silly season. I do hope so - in our effusive industry, no news is seldom good news.