Tag Archives: classified advertising

Ad spend will bounce back, says Fry; multiple models needed, counters McCall

Amidst what was otherwise a fairly gloomy House of Commons select committee session on the future of local media in the UK [see Claire Enders’ prediction that half of the UK’s regional newspapers will close in five years and her comments on bloggers], Johnston Press chief executive John Fry remained staunchly optimistic about the cyclical/structural elements of the decline in local media.

While all members of the panel agreed that this was the worst crisis faced by local media in the industry’s history, Fry said the decline in advertising revenues for his group was more cyclical than structural.

“That implies that there will be a bounce in advertising when that changes. From here onwards we’re likely to bottom out. When the economy recovers we’ll see a recovery in advertising,” he said.

Guardian Media Group chief executive Carolyn McCall was quick to temper Fry’s optimism:

“I don’t believe the prospects for recovery, particularly in classified advertising are particularly strong. I don’t expect to see a great deal of those three big markets – I don’t think bounce is the right word – I think it will come back slowly, it will come back in a different form or shape,” she said.

“The structural change is too profound and the economic recession has just hammered it. Deregulation is one step towards helping. It’s not a panacea. It raises all sorts of important issues about jobs.

“One thing we’re going to have to face about this industry is that it’s going to be a smaller industry with less people in it. Consolidation will help because then the clustering of assets in the right place, will makes more sense, you’ll get more scale.”

All three panellists (Fry, McCall and Trinity Mirror’s Sly Bailey) taking part in the evidence session (which had earlier taken comments from Claire Enders and DC Thomson’s Christopher Thomson) supported consolidation and the relaxation of newspaper merger rules to help local newspapers.

Yet it was McCall again with the most sensible comments – a range of issues and possible solutions need to be considered: discussions about aggregators; consolidation; support for web development; the use of part-paid, part-free access; state-funding; and the problem of council newspapers.

The industry needs to move away from the display advertising model to – not just one business model – but lots of business models, she added.

If any of them can sustain quality local journalism, none should be ruled out, she said, echoing comments from the Society of Editor’s executive director Bob Satchwell to Journalism.co.uk last week.

Ernst & Young: Online search will help reverse fortunes of display and classified ads

Growth in online search will offset the the downturn in online display and classified advertising in 2009, according to new analysis from Ernst & Young.

Less money will be spent on advertising focused on reach with investment in performance-based advertising, such as search, expected to increase, suggested the ‘media and entertainment by numbers’ report.

Internet advertising is likely to overtake TV advertising this year as the largest ad medium, the report said.

“But to assume that a media accounting for a fifth of all advertising budgets could be totally immune to a downturn would be too optimistic,” the report added.

Publishers will be affected most by the move to more interactive ad models, including cost-per-click (CPC) or cost-per-action (CPA), as this will cause CPM rates for banners and display advertising to fall.

Online classified advertising will be affected more by the general economic climate, for example fewer jobs and properties available, than by changes within the advertising industry itself, the report added.

[Read Journalism.co.uk’s full breakdown of the Ernst & Young report]

Round-up of the recent UK newspaper job cuts

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It’s hardly like newspaper jobs were all that secure anyway, but this month’s financial situation (something about a recession) hasn’t helped things either over the last couple of weeks.

This week news broke that two of the UK’s biggest-selling regional daily newspapers will cut 135 jobs.

The family run publishers Midland News Association are looking to merge their publications, the Express and Star and the Shropshire Star, with the aim of reducing costs by around £3 million a year.

After a decline in advertising revenue, the publishers considered it a necessary move, as reported over at the Guardian. There are plans to merge some parts of classified advertising, production and finance.

Press Gazette reported that despite the merger, both publications will maintain their individual identities, while also keeping separate editors and reporters.

At the beginning of last week we learnt that the Metro in Manchester will be axing ten jobs. It has since been announced that the jobs lost will be in editorial, sales and adminstration roles. The Liverpool office has been closed and relocated to Manchester.

Three of Trinity Mirror’s East Midlands publications ceased production last week, as reported over at Hold the Front Page: the 126-year-old Long Eaton Advertiser, The Nu News and The Long Eaton Trader. A distribution worker and 3 members of advertising were made redundant. Due to staff reassignments, no editorial job cuts were made.