Hail to the power of print

"I am easily satisfied with the very best."
Winston Churchill


Hail to the power of print
By Gavin K O'Reilly
http://news.independent.co.uk/media/article2537371.e ce

Don't believe all you're being told about the death of the press: more people all over the world are reading newspapers. What's more, they're still a powerful medium for advertising, says Gavin O'Reilly

The chorus of disapproval for newspapers has become a global trend. These days it is nearly impossible to find a media analyst who actually reads a newspaper or who can see anything other than doom and gloom for the industry. I can present a different perspective.

Let's start with circulations, which continue to grow - and not just in India and China. Paid circulation grew globally by 1.9 per cent in 2006, with sales of 510.4 million copies a day. The number of paid-for titles is at a record 11,142, up 3.1 per cent on the previous year.

You can add to that the rapid growth in free dailies - titles such as thelondonpaper, 20 Minutes, Metro and the rest - which together distribute 40.8 million copies a day.

For those who think print is some relic of the past, newspapers and magazines are actually the largest advertising medium with a combined 42.3 per cent share of the market.

According to the accountants PwC, global newspaper advertising revenues increased by 4 per cent in 2006 and by 15.6 per cent over the past five years. Hidden within those figures is the fact that newspapers - the 2nd largest advertising medium after TV - are actually larger than the combined advertising value of radio, cinema, magazines and the Internet.

PwC predicts that by 2010 the global advertising market will grow by 6.2 per cent to $525bn (£265bn), a growth of $111bn (£56bn). Of that, newspapers will capture 18.2 per cent, second only to TV and the internet. Print (newspapers and magazines) will capture 27.4 per cent of that growth, greater than the internet.

According to the UK research company TGI, newspaper readership has grown by 2.1 per cent over the past five years, with readership among 15-24 year olds growing by 6.9 per cent and readers over 65 growing by 3.7 per cent. This counters the tired view that the newspaper readership is getting older with the important addendum that people are actually living longer.

The key to media exposure is the time that people spend reading, watching, using or listening to that particular medium.

Let's reflect on how US advertisers invest their clients' money. According to the specialist private equity fund Veronis Suhler Stevenson, for every hour of TV viewing, advertisers spend $40.1m (E20.2m). For each hour of radio they outlay $19.3m (E9.7m) and for the internet - all the time people are supposedly glued in front of their screens - advertisers only spend $65.4m (E33m).

As for newspapers, advertisers spend $316.3m (E160m) for every hour of reading, that's eight times more than TV and reflects the quality demographic that a newspaper delivers.

The media scene never stands still. It is important to see newspapers within the rapidly changing media matrix, where the fragmentation of society, new forms of media consumption and growing competition everywhere make life more challenging for the media buyer.

There is both the need for more credible information and more accurate demographic targeting of the consumer. Asked to name the biggest issue they face, 67 per cent of marketing directors cite fragmentation. Their task is even more difficult when one reflects on what is happening in TV land - the high altar for media planners. Aggregate TV viewership is not growing, whereas newspaper audiences have either grown or remained stable.

According to BARB, which monitors television audiences, UK TV viewing fell in the period March 2000-March 2007 by 1.2 per cent. In that period the UK terrestrial channels lost nearly 24 per cent of their audience.

There is no shortage of statistical data on circulations, readership, viewership, time spent online - and there are doubtless pluses and minuses in the detail. What is indisputable is that newspapers increasingly represent the mass-market medium channel of the future, delivering a large, broadly stable, reliable and definable demographic.

A crucial question is whether online exists as a threat or as an opportunity for newspaper publishers in 2007 and beyond.

One thing that we can all agree on is that online is a rapidly growing area in terms of usage, and most importantly, in terms of advertising. PwC forecast that global online advertising will grow by a compound 18.1 per cent to 2010 and be worth about $52bn (E26bn).

To me, among the real questions is: what is driving this online growth?

BRMB Internet Monitor in the UK estimates that 25 million Britons use the internet for emailing. Is this media consumption?

There are other inconsistencies in the data, that suggests that only 4 per cent of internet users regularly visit adult sites, even though this is a multi- billion dollar industry. Only 3 per cent say they regularly gamble online. Getting reliable data on actual internet usage rather than aggregate usage is near impossible.

Every industry needs to evolve and that's just as true for the newspaper industry as any other. Over the past 18 months we have seen more new title launches than at any time in our industry's history.

As for the investment made by publishers in new printing and production equipment, we stopped counting at $6bn (E3bn). From News Corporation's $1 bn (E500m) investment in the UK to papers across the USA, Europe and Asia, it's clearly a good time to be manufacturing printing presses. That investment is yielding more colour, more flexibility and significantly lower unit costs.

So I suggest there has been no paradigm shift.

Every newspaper publisher produces a product - a brand - that has the capacity to be relevant to and purchased by the modern day consumer. Our only risk is that industry inertia leads to consumer apathy.

Which is why publishers are investing behind their brands and businesses - and that of course includes online, which is all about aggregating a larger audience, not cannibalising our existing audience.

When you pull it all together, the prognosis for newspapers is actually quite different from conventional wisdom.

Gavin K O'Reilly is the president of the World Association of Newspapers (WAN), and is the chief operating officer of Independent News & Media plc. This is an edited version of a presentation he gave last week to an audience in London, for WAN's Capital Markets Day