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Raymond Snoddy 

The pendulum finally swings back

The pendulum finally swings back

As Facebook takes a multi-billion dollar kicking, print ad revenue for newsbrands has increased for the first time in seven years. Is this the start of something new, wonders Raymond Snoddy

One of the abiding mysteries of the British media has been the behaviour of the advertising community and its seemingly never-ending love affair with social media.

In the face of bots, lack of transparency on numbers, viewing for nanoseconds, hate speech, hostile brand environment and serious questions raised by the chief marketing officers of Procter & Gamble and Unilever, what has happened?

One is tempted to say nothing but that would not be accurate. More money has continued to flow into the coffers of social media giants almost in defiance of gravity and even as warnings intensified that democracy, and even society itself were being undermined.

The appeal of short-term programmatic has remained undimmed, despite, as one sardonic senior adman noted recently, “whatever programmatic means this week.”

On the other side of the equation independent research report after independent research report have piled up demonstrating the superior engagement, dwell time, financial value and the importance of trust generated by newsbrands, or as they should be known, providers of real news.

What has happened as a result? Precious little apart perhaps from shifty ad folk conceding that perhaps such matters deserved further scrutiny.

And still the advertising flowed in an apparently unstoppable flood towards the social media and away from newsbrands despite the evidence that a modest swing of the pendulum towards newspapers would be both rational and also in the interests of everyone involved, not least brand owners.

Nothing has happened - at least until now.

For the first time there is some real evidence that the pendulum is on the move. Maybe some messages just take time to percolate.

And although it is maybe a little early to put out the bunting, the latest report from the Advertising Association/Warc, which saw advertising spending rise by 5.9% year-on-year in the first quarter to £5.7 billion, makes interesting reading.

The numbers suggest a change to the casual laziness that saw ever-increasing amounts of advertising pumped into social media and the return of a more sophisticated, broadly based approach with individual media being judged on their merits and used in tailored campaigns.

As a result out-of-home, radio and TV have done well and - cue a trumpet or two - national newspapers have had their best performance for more than seven years.

We can even, say it quietly, mention the “G” word - growth.

Print display advertising in the national newspaper market rose 1% to £153 million in the first quarter, the first increase since the last quarter of 2010.

It may not sound like much but it's a lot better than the double digit declines of recent memory.

The popular dailies adspend rose by 2.8% to £77.8 million with Tesco returning to the newspaper fold.

While print display in the quality market dropped by 0.3% to £48 million, that too was the best quarterly performance for seven years.

The hope now is that the modest shift will become a permanent trend, further boosted by self-help innovations such as Ozone and the more reliable and comprehensive data coming from PamCo.

It has taken an almighty shift to move the dial by a perceptible amount and the hope now is that the better results for the national press will also help to pull up local and regional press advertising by the boot-straps.

The modest return of the advertising to traditional media - mobile is still the big winner - came as Facebook hit on hard times, at least hard times for a social media giant.

Facebook’s disappointing, some even said disastrous, second quarter results knocked £92 billion off its value, which amounts to the largest single hit in Wall Street history.

Facebook has apparently been beset by a trio of problems: hitting natural subscriber limits, increasingly wary advertisers and the huge costs of improving safety and security.

As many have observed, there is not all that scope to expand beyond the current 2.5 billion who have some contact with Facebook when only around 3.5 billion have access to the internet worldwide.

Daily use in the US has stalled, in Europe numbers are down by 3 million and the 22 million overall growth worldwide in the quarter came mostly from Asia.

In the wake of the Cambridge Analytica scandal and Russian involvement in the Trump campaign and almost certainly in the Brexit referendum also, advertisers are at long last showing a degree of wariness.

But it is the “safety and security” issue that will continue to hit Facebook’s share performance.

Billions of dollars a year are now having to be devoted to dealing with the ills and abuses so blithely ignored in the past.

Some say that as a result of transforming itself into a friend of society, rather than a pathological citizen, costs will have to rise by 60% and continue into the future.

Maybe we are already seeing some of the fruits of all that investment with the announcement that Facebook has uncovered a suspected plot to interfere in the US mid-term elections in the autumn. The elections are vital and will determine whether President Trump can retain Republican control of Congress.

Facebook says it has identified “inauthentic” accounts linked to the promotion of divisive rallies and events across the US.

The social media company says the tactics used look like those adopted by the Internet Research Agency (IRA) an organisation with links to the Kremlin. This time though greater efforts have been made to disguise the ultimate source.

Whatever the details, the evidence is considerable that Facebook is at great expense finally taking responsibility for what appears on its platform and those who are trying to manipulate, misuse and mislead.

Facebook is hardly going to go away and will remain a valuable tool for advertisers, even more so when it has cleaned up its act.

The social media giant has even gone a long way to conceding that it's a form of publisher rather than a by-standing, neutral platform operator.

The very process and cost of becoming a respectable citizen will have the effect of creating a more even playing field and provide breathing space for existing media, which were being slowly squeezed to death.

As long as the advertising industry recognises that the pendulum should yet gain some more momentum.

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JamesGlendennan, Account Manager, MediaSense on 2 Aug 2018
“I would agree that it is positive to see a modest recovery in newsbrand advertising income (albeit from a much weakened base). Print titles have an essential role to play in society, far beyond the advertising bubble.

It is also clear that the collaboration of Project Ozone must continue if the medium is to sustain any form of revenue increase. Possibly through further mergers and acquisitions - or alternatively a reconsideration of Project Rio and the creation of a single / reduced number of entry points for clients and agencies.

Equally PAMco has offered an improved measurement tool for advertisers and planners to assess the value of titles towards their own campaign objectives across various formats.

The future remains difficult for the sector, but perhaps the days of double digit declines have been consigned to history. However it is probable that newsbrands overall share of the pie will continue to shrink over the coming years.”
BoWilliams, Partner, Brand Links on 1 Aug 2018
“"Dead Cat Bounce"”