While many advertisers continue to pull money out of printed newspapers, some are standing firm. Traditionalists, perhaps, but they remain adamant that the channel still delivers results, despite uncertainty about print's long-term future.
Graham Burke, chief executive of Village Roadshow, said about 25% of his marketing budget goes towards newspapers and he remains a "big believer" in the medium. While acknowledging the declines in circulation, he said there was "still one hell of a huge base of people" turning to the printed page.
"Newspapers for us are a very powerful advertising medium, and we use it to win customers who wouldn't otherwise have gone to the movies or theme parks," he said. "I'm a big believer in newspapers. There's no doubt that it's a medium that gives solidity to the campaign."
Burke attributed much of the success of the movie Red Dog – admittedly a 2011 release – which made $25 million at the local box office and went on to become the third-biggest DVD film ever, to newspaper advertising in the News Limited papers. He said there was a "bump" every time they ran a newspaper ad.
News Limited group sales director Fiorella Di Santo said while the printed page would obviously change, total audience was stronger than ever before and from a commercial perspective, the multi-platform migration would allow publishers to do "exciting things".
"For a variety of reasons I think papers are going to be here for a good while yet – consumers love [print]," she said. "Papers are a considered purchase for most people. We're seeing a lot more creative executions, high-impact stuff. Consumers are becoming more discerning, more open to being communicated to in different ways."
Di Santo said she "makes no apologies" for the newspaper channel, with weekly readership "well over nine million people". The retail category was proving particularly resistant for News, she said, with food, liquor, apparel, homewares and electronics all holding up in terms of volume. "We know [print] drives traffic and it drives purchase," she said.
Media analyst Steve Allen, managing director of Fusion Strategy, said none of his clients had seen "any significant decrease" in key metrics, whether they be enquiries, awareness or conversions, despite double-digit fall-offs in some cases. Allen said "even clients are asking why".
He said the cuts in advertising spend did not match up with readership declines. "Why are the fundamentals of revenue so far off year-on-year, and readership nowhere near as much? A number of people have come out saying the print market really works – it doesn't matter that the revenues are off.
"The evidence is the big media agencies have turned their back on print. There are many sectors of any media agency's business that are more profitable on a work rate. You can get the audience either way, but if you're getting two or three times the margin on the digital side of the transaction, it wouldn't be surprising that [you favour digital]."
According to Nielsen, the newspaper advertising market continued to haemorrhage money in the 12 months to June – metro press was down 10.8% year-on-year ($245 million) to $2.022 billion, while regional press was down 2.3% to $364 million.
PwC forecasts the combined newspaper advertising market will decline at an average compound annual growth rate (CAGR) of -7.5% to $1.7 billion by 2017. While the digital newspaper advertising market is forecast to increase at 5.6% CAGR to $489 million by 2017, it won't be enough to offset the $628 million loss in print.
And what of communications researcher Jeff Cole's dire prediction for the future of newspapers? "The newspaper business can be summarised in one very depressing statement: every time a newspaper reader dies, he or she is not being replaced by a new reader," he told the audience at Mi9 Imagine last month.
Roadshow's Burke remains unfazed. "That's a silliness," he said. "I'm only looking at the next decade. That's far enough. After 10 years I'll review it again."
An abridged version of this article first appeared in the 4 October 2013 edition of AdNews, in print and on iPad. Click here to subscribe for more news, features and opinion.
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