John McGee: Newspaper groups need to bang their drum louder
With €162m to be invested in newspaper advertising in 2016, the industry is far from dead but it needs to make a stronger case to advertisers
This time last year, Martin Sorrell, the CEO of WPP, the largest advertising and marketing group in the world, hinted that there was a growing debate that was gathering momentum about the effectiveness of print advertising and whether or not it was a lot more effective than people had given it credit for.
For a company that has spent the last 10 years on an acquisition binge across the globe, snapping up digital agencies with gusto, it was an interesting admission that perhaps some of the negative sentiment that is pedalled by digital evangelists is overdone.
Sorrell's remarks came at a time when the pace of growth in digital advertising was starting to slow down in many markets where WPP operates. They also came just before the deluge of negative sentiment started to build up around ad blocking and ad fraud within the online industry.
To all the advocates of the printed word, including myself, here was an industry bigwig more or less saying what we have all believed for a long time: rumours of print's demise are a tad exaggerated and print's effectiveness in delivering sales, brand awareness and engagement for advertisers remains important.
For lots of reasons, newspaper publishers haven't been very good at articulating this message to the marketing community. Some of it has to do with their attempts to build an audience around their core digital offering while chasing advocates and readers from social channels. This is all very well, but the reality is that the core print product is still the bread and butter of most news organisations and print advertising revenues still account for the lion's share of overall advertising revenues which this year are likely to be in the region of €162m.
Their plight has not been helped by all powerful media agencies who determine where their clients' money is being invested. Not surprisingly, digital has been taking an increasingly bigger slice of the spend. But more fundamentally, the agencies' understanding of the effectiveness of print advertising and indeed the importance of print as a medium, has been lost along the way.
In many ways, the industry only has itself to blame. A distinct lack of meaningful research into 2.4 million readers who read a newspaper every day or week and the effectiveness of print as a medium for advertisers (the people who pay the wages) has only strengthened the case for digital and other channels.
Attitudes may change with the publication this week of new research on print's effectiveness. Called The Book of Evidence, the research was undertaken by Independent News & Media, publisher of this newspaper, and carried out by Amarach Research and Ignite Research as a part of a two-pronged approach to understand Irish newspaper readers and to assess the effectiveness of newspaper advertising for key sectors.
The findings of the research are good news for the industry and will surprise many of the digital naysayers within adland who have written press advertising off.
Over 13,000 face-to-face interviews took place at the point-of-purchase over a 12-month period, making it the biggest survey of its kind ever undertaken in Ireland. In addition to the Amarach research, which focused on those who buy newspapers on a daily or weekly basis, an econometric study, carried out by Ignite Research, dealt with some of the broader issues like the return on investment (ROI) and the relationship between print and online.
Arguably one of the most significant findings contained within The Book of Evidence, was that 25pc of all sales driven by advertising across other channels are driven by print advertising according to Ignite's econometric research.
In a cluttered and fragmented media market, that's a pretty compelling statistic. If ever a figure was needed to demonstrate print's capabilities to brands, this is it.
For other sectors that depend on advertising, the research found that for every €1 spent on print advertising by the retail sector, a return of €39 was generated. As many newspaper readers will already know, the retail sector is particularly active in print. Indeed, according to the Nielsen AdDynamix report, seven of the top 10 advertisers in newspapers during 2015 were retailers.
The research also found that print advertising was 1.5 times more effective than radio when it came to delivering ROI for these retailers.
In the case of the finance sector, which has been particularly active in the advertising market over the last 12 months, the research found that for every €1 spent, it delivered a return of €8.10 for the industry. Similar findings were also applicable to the travel and motoring sectors.
This research is both timely and important but the industry needs to do a lot more. While changes in the outdated Joint National Readership Survey are in the pipeline, it needs to bang its drum a lot louder if it wants to be heard at the top table.
Sunday Indo Business