Download 1 World Association of Newspapers 2003 Newspaper Advertising Conference

World Association of Newspapers
2003 Newspaper Advertising Conference
How to Succeed in a Tough Market
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Miel Bakker
Head of Media Research Goldman Sachs International, Europe
Keynote Advertising Forecast 2003-4
Advertising revenue forecasts are currently “not very rosy,” and it could be
2004 before any real upturn kicks in.
The background to this outlook is the generally “depressed” state of worldwide
GDP, with 2003 GDP growth forecast at +2.7%.
Goldman Sachs methodology for global advertising forecasting is to combine
ad spend forecasts by country, with business sector forecasts by country.
Globally, at +2.8% for 2003, their estimate is lower than the general view
expressed by their competitors, which in the case of some investment banks
go as far as +4%.
The organisation’s estimate for 2004 is currently +4.5%.
The Goldman Sachs forecast for the USA in 2003, at +2.2%, may be on the
low side in the light of the performance of the first few months of the year.
GDP trends provide the best correlation for advertising performance. Based
on studies of previous recessions, in 3 out of 4 cases, the turning point for
advertising was similar to that of GDP. The exception to the rule was the 1992
Gulf War, when advertising was harder hit, and slower to recover, reflecting
consumer confidence. This leads to the conclusion that war would have a
major adverse impact on ad spend.
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The importance of “expectations” was emphasised, as this has been the main
influencing factor when advertising performance has not been in line with
GDP.
Assuming the ratio between advertising growth averages and GDP to be 1:1,
any performance below this is poor. With advertising running at about 0.7%
below GDP in relation to GDP from 1994 onwards, this below par trend is
predicted to continue as increased investment in ‘below the line’ activity,
fuelled by improved customer intelligence, is likely to divert revenue from
traditional above the line advertising.
Addressing newspaper performance specifically, the decline in the number of
titles circulating in the USA from a peak of almost 1800 in the late 1980s, to
the current 1400, should be viewed as consolidation rather than as being a
negative indicator. Whilst there has been a decline in overall daily circulations,
from a high of 63 million to 55 million in context, this has been offset by an
improved performance in the Sunday market.
Newspaper advertising performance in the USA is deemed currently to be
mirroring that of the 1991 Gulf crisis, with advertisers pulling out
‘aggressively’. Despite this, Goldman Sachs predict that newspaper ad spend
will continue at its current share of 30% of the total US advertising
expenditure.
The dichotomy in the fortunes of the daily and Sunday press in the USA was
compared with those of the national and regional titles in the UK, with the
latter enjoying a healthier time for circulations. The “trough” in which the UK
national titles currently find themselves was likened to that of the early 1990s.
The polarised circulation performance of the different sectors even within the
UK national market was illustrated, with the popular titles down 6% over the
10 years to 2002 while the qualities are up 13% over the same period. The
attendant impact on advertising performance, where the revenue dependence
is highest within the popular sector, owest among the qualities, was
indicated.
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Forecasts for advertising in the UK press show only a modest increase for
2003, at +3.3% for the nationals and +2.8% for the regional titles.
Miel pointed to the sustained growth of Classified revenue, in particular
Recruitment, over the last 20 years.
The overall prediction for newspaper advertising in Europe was less positive
than that for the USA, with the share of ad spend forecast to drop from 34% to
32%. Within the pan European picture, there were significant geographical
variances impacting on the overall perspective.
The initial prediction of “modest” growth, with 2003 currently a “moving target”
whose growth assumptions are not yet giving any indication of being realised,
and 2004 being the more likely time for an upturn, was reiterated.
War would be “devastating” for advertising revenues and, despite the success
of some niche sectors such as the UK regionals and US Sundays, the equity
markets continue to be bearish, that is performing negatively.
Although things are not yet at the trough of the early 1980s, the perspective
on consumer newspaper stocks is cautious, with Daily Mail General Trust
being the prime choice and business publications being preferred to
consumer ones.
In the light of such conditions, Miel’s advice to publishers was to manage
expenditure and control or cut costs, without compromising the quality of the
product.
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David Hoath
Marketing Director The Newspaper Society UK
The Latest Advertising Effectiveness Research
“ Local press is all about conversion, converting customers into buyers”.
That this is the unique position of the medium in the UK was the central
proposition of David’s presentation on the most recent research into the
effectiveness of advertising in regional and local newspapers in the UK.
Presented here In advance of its launch in the UK, this overview of the results
concluded that in addition to the known capabilities of local press, it can also
“build unique and sustained awareness, it improves the health of a brand and
increases consideration. Above all else it delivers results for advertisers clearly and demonstrably.”
The impetus for the research was a combination of factors: competitive
pressures from other media, the ever increasing emphasis being placed on
accountability for results within the marketplace, and the fact that a number of
other key media (local radio via the Radio Advertising Bureau being a quoted
example) were at an advantage through being able to point to such evidence
in a relative absence of same for local newspapers. By no means least was
the industry’s promise to its customers that it would undertake such a project,
alongside a number of other initiatives, which have already been actioned,
such as improved planning tools, creative awards, electronic copy delivery
and training.
The study underlines the corporate proposition of the local press in the UK branding, trust, and immediacy. It also answers the question of whether local,
tactical advertising is far as its capabilities reach.
Local press in the UK is not always an easy choice for advertisers with
national distribution, in the face of television and national press opportunities.
There is an imperative to prove not just its effectiveness, but also how it
compares with other media and how its dynamics eg colour usage, ad size
and the business category, contribute to the results experienced.
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Pre-campaign
Base
awareness
Regional press
campaign commences
Brands
increasing
awareness*
Brands
increasing
familiarity*
Brands
increasing
consideration*
89%
44%
25%
Movement from unaware to consumer…
Sales
+?
Purchase
point
* Statistically significant increase
This model of consumer activity, shows how the ultimate objective of
advertising is to shift the consumer from awareness, to familiarity, to
consideration, to purchase action, and illustrates that local press “achieves
that shift.
The reason why local press, used in the right way, converts awareness into
action is a function of its position and relationship with its audience. Because
of its proximity to its readers, it is close to their needs and there is a greater
positive predisposition among its readers to advertising messages. The local
content of both advertising and editorial relates to the consumer and this
becomes increasingly important the closer they are to purchasing. The detail
of prices, locations, opening times etc are key to local press advertising and
cannot be found in any other media. Broadcast advertising, for example,
cannot be actively sought by the consumer, nor does it easily provide a
reference point for comparisons between prospective product purchases and
outlets. Whilst other media may have an impact on the consumer, if they are
about to buy, they are more likely to actively seek information from their local
newspaper.
On the basis of the research, David described the aspiration for regional press
as being to assume a new position in the media mix – that of ‘the conversion
medium’, the one which takes the consumer on the final step after brand
building and desire.
“Because what’s the point in all the expensive branding, in the awareness, in
the desire building, if you don’t convert that into actual sales?”
Moving into the detail of the research, “effectiveness” was explained as the
efficacy of the medium in clearing “the hurdles” between the brand and actual
purchase.
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Specifically and progressively, these “hurdles” are:
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Impact, ie to be noticed and remembered and become ”top of mind” for
the consumer
Greater brand familiarity, bringing the consumer closer to the brand
Purchase consideration
Sales effect.
The research was conducted in four distinct UK regions, each of them a major
town or city with a significant population, during the 5 month period between
September 2001 and February 2002. 15 minute, questionnaire based, street
interviews examined awareness, familiarity, and brand consideration. The
interviewees were current regular readers of local newspapers in each region
and were representative of the population in terms of gender, age and social
grade. The total of more than 9000 interviews at a cost of more than £400,000
gave a sample size that was “beyond question” not just in statistical terms but
by comparison with other comparable and industry standard research.
Using a combination of every daily and weekly newspaper in each of the
cities, research was conducted on 26 clients, 5 of them national, and therefore
tested in every city, the remainder local. This combination of different
locations with regional advertisers and national brands enabled the use of
both test and control cities, so that the effect of local press could be isolated.
The objective for any advertiser is to move consumers as far as possible
along the attitudinal and behavioural scale illustrated above, notoriously
difficult shifts to achieve.
The aggregate results for all 26 brands provide a “snapshot” of local press
effectiveness. Brand recall within local press increased from an average of
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13% at the start of the study to 23%, a 77% increase, proving that the
advertising in local press is noticed. In comparative terms, this places local
press at second only to television in achieving recall.
Local press also achieved unique awareness for the brands, a critical issue in
mixed media scheduling. The results demonstrated that local press
contributed an additional unique awareness level of, on average, 9%.
On average, regional press can generate 9% extra
coverage in a multi-media schedule
Media used in schedule
Local press + at least one
other media
Seen advertising in local press
but NOT any other media %
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And broken down by media mix…
Local press + local radio (only)
TV not in mix
TV in mix
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Significantly higher scores were achieved by a number of the national brands
eg Morrisons supermarkets +19% and Specsavers opticians +13%, in a
media mix which included national press, TV and radio, and in the latter case
cinema as well.
Next follow key results for 4 specific national brands, Specsavers Opticians,
Morrisons supermarkets, Britannia Tyres and Imperial Leather toiletries.
Specsavers awareness level, relative to their ad spend, at an index of 128,
was described by the client as rendering local press ”critical” to the
achievement of their marketing objectives.
Imperial Leather, whose media mix was with outdoor, achieved a 44% initial
increase in awareness via local press, compared with that of posters at 38%.
The decline in awareness over time was also arrested where local press was
used (25% compared with a drop of 37% where outdoor alone was used).
This shows that the medium can work for an FMCG brand. Such brands are
often “fixated” on television, and the result is therefore a significant lever to
encourage the redeployment of revenue towards regional newspapers.
Morrisons achieved an increase in awareness from 11% to 27% and shows
the value of consistent spend, as well as local press’ ability to “hold its own”
even when TV is part of the media mix.
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Considering newspaper advertising dynamics, the research findings
supported the evidence to date that colour is worth the premium charged, but
that the case is not so marked when it comes to positional premiums.
It also validated earlier evidence that eye movement when reading an ad
follows ‘classic’ ad layout in moving from top centre through centre to bottom
left, and found that the most successful ads in the survey were full colour
pages.
The study also bore out the fact that results are affected by whether or not the
consumer was “in the market” for the brand. Whilst the brand awareness
results for TV and radio were similar irrespective of this, those for local press
were much higher, proving the earlier point about the predisposition of the
audience and their seeking of the advertising message.
The “conversion effect” was illustrated by the case of Britannia Tyres, where,
in addition to impressive increase in awareness, familiarity and purchase
consideration, they achieved a 34% year on year increase in turnover with just
2.3 times the expenditure – that means that local press returned £2.30 to
every advertising pound invested .
Linking the results of the study to the earlier “hurdles” lying between the brand
and consumer purchase, the summary findings were that:
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9 out of 10 campaigns achieved an increase in awareness
44% achieved an uplift in familiarity with the brand
25% achieved an uplift in brand consideration, proving that the ads
worked
The “Holy Grail” sales effect was indisputably achieved for Britannia
Tyres
A concluding reminder was given that in addition to these achievements, the
local press has a cheaper Adult CPT in relative and researched terms, and
“enjoys a real and relevant relationship with its readers.”
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Scott Whitley
Advertising Director
The San Diego Union - Tribune
The strategy of targeting the largest competitive revenue pool is the one most
likely to deliver the greatest returns.
Scott illustrated this by explaining the press strategy against television in the
USA.
Television accounts for 23% of the USA’s $237.5 billion ad spend, with press
and Direct Mail equal second at 19% apiece.
If press could secure just 1% of the combined radio and TV pot which totals
$73 billion, it would generate an incremental $730 million for the medium.
The National Newspaper Network is, at national level, the sales arm for all US
newspapers. They sell by selecting categories, especially those where they
achieve a low share eg pharmaceuticals and packaged goods.
Their “value of integration” approach, compares the relative strengths and
weaknesses, such as reach and cost per point, of the two media, illustrating
how press consistently comes out on top.
There is a need to educate advertisers about the changes in the television
medium over time, and the sales teams would typically raise the following
examples, albeit on a selective basis:
Cost of Reach: It takes 120 GRPs on TV to achieve the same 50% reach as
50 GRPs in press, making the cost of reach in press lower.
TV Clutter: There are about 70 channels now available to homes in the USA
compared with just 3 not so many years ago.
Commercial Minutage: The growth on advertising minutage intrudes on
programming to a greater extent now than ever before.
Demographic Profile: The best and most desirable demographics are
reached most efficiently in print, such as the best educated consumers: 40%
of newspaper readers are graduates compared with 32% of TV viewers.
Press also reaches more of the affluent households.
Information Source: Consumers look to newspapers for information rather
than to television, eg 2/3 of car purchasers, compared with just 1/7 looking to
television.
Trust: Press is viewed as being more believable, informative and trustworthy
than TV.
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CPM: Press delivers an Adult CPT of $6.10 compared with TV at $10 / 000.
Similar efficiencies exist with subgroups such as the coveted 18 –34s, an
audience where television regularly boast superiority.
The sales teams may also present both the pros and cons of television in
context, and they emphasise the value of a media mix. They do this in such a
way as to make sure that the advertiser does not feel that they have made a
mistake in their media selection.
Proctor &Gamble were cited as an example of this in operation. With 25
brands in now advertising press compared with just 1 five years ago, they
believe that:
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A media mix builds share
Colour works in a mono medium
Category exclusivity is needed
Cost effective reach and frequency can be achieved by press
Location can be emphasised in press
Newspapers produce response
Newspapers help to build brand awareness
Audience fragmentation and clutter are adversely affecting TV’s
position
The local press sell against TV is more likely to produce immediate results.
Working on the appreciation that local advertisers are not likely to be attuned
television buyers, the local sales teams work on a process of education,
needs assessment and recommendations on how to buy more efficiently, to
improve reach, frequency and lower costs. A full year was invested in training
these teams to speak the broadcast language and to educate their customers.
Ikea, who have doubled their press activity at the expense of television, were
cited as an example of this approach working at local level.
Having established the profile of the Ikea shopper, their competition in the
San Diego region, and newspaper usage among similar retailers, the sales
team developed a proposal which improved on their expenditure, reach and
frequency.
The original broadcast plan, with expenditure of $100,000 per month,
achieved 341 GRPs at a cost of $293 per point. The proposed press schedule
cost $65,000 per month, and bought two insertions pr week, at the lower cost
of $183 per GRP, with increased GRPs.
The total schedule, which retained the original radio activity, increased overall
GRPs by 48% and decreased the cost by $110 per point.
Press thus became the dominant medium with TV being used only for special
events. The first such campaign, using complementary creative executions,
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generated more than 20,000 shoppers and achieved a lower cost per sale for
the advertiser.
Finally, Scott pointed out the increasing instances of convergence within the
US market, the three most common scenarios being:
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Acquisition, where a real issue is that of getting sale staff to work
together
Two parent companies sharing an internet site and feeding broadcast
and press content
Newspapers finding a broadcast partner for limited marketing activities,
usually to selected retail clients.
He used the case of Albertson’s, a grocery chain, to illustrate how a “multi –
tiered” campaign could work. The San Diego Union Tribune collaborated with
a company specialising in online coupons and a local broadcast sales agent.
The campaign originated for the advertiser incorporated:
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Leaflet distribution in paid and free titles achieving 80%
penetration
Interactive online advertising, emails, newsletters to shoppers
Manufacturer coupons
Radio and TV promotion of Albertsons online shopping service
Scott concluded by stressing that “the key to success has been keeping the
best interests of the customer to the forefront,” with the end result being “a
more powerful media buy that strengthens all parties.”
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Giorgio Marchegiani & Vincenzo Santelia
Vice Presidents Bain and Company
How to benchmark advertising revenue potential
“Advertising revenues are paramount to optimise newspaper or magazine
revenues and profits” was the opening on screen assertion from Bain and
Company, presenting a Predictive Model of Advertising Revenue for
Newspapers and Magazines. Developed on the basis of providing clients with
basic tools to inform decision-making, they stressed its simplicity, specific
relevance to the market and operational value.
The initial step was to shortlist a number of variables which could have, and
were expected to have, an impact on advertising revenues. They then
developed a quantitative model which measures the “sensitivity” of advertising
revenue of these variables, and is thus capable of many business
applications.
The variables and their translation into the model are as illustrated:
Variables used
Variables
Rationale
Model variable
i Segment leadership
i The leader in each
segment collects an
over-proportional share
of advertising revenues
i Relative market share
i Readership
i Number of readers
directly affects the total
number of available
contacts
i Number of readers per
copy
i Circulation
i Circulation drives the
total number of readers
i Total number of copies
i Target segment focus
i Focused titles
(especially magazines),
collect relatively more
advertising revenue
i Concentration index of
published advertising
categories
Amserdam 20 02 03
5
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Variables used – Cont.
Variables
Rationale
Model variable
i Readers target
i Advertisers aim at specific i % of readers in the
target groups
middle high income
segment
i Editorial flexibly
i Titles with consistent
messages between
content and advertising
have relatively higher
advertising revenues
i Frequency
i Weeklies collect more per i Number of issues per
single issue than
year
monthlies and dailies
Amserdam 20 02 03
i Qualitative variable based
on experts’ judgment
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Based on 120 titles in Italy, the organisation found that, in 92% of cases,
variance in advertising revenue correlated to variance in these variables, with
only 8% down to ‘soft’ factors. Such a high level of correlation demonstrates
the accuracy of the predictive model.
Obviously each variable makes a different level of contribution to the overall
effect. “Leadership” and “Target,” for example, account for 70% of the total
effect, indicating that it is better to be a leader in one segment than to have a
high widespread circulation. Circulation and Readership make a 14%
contribution, Frequency 13% and Flexibility 5%.
The practical value of the model in supporting the decision making process
was demonstrated by 3 Case Studies.
Example I
The newspaper had two alternatives to enable it to gain revenue, namely:
ß To acquire and agree with local newspapers
ß To focus on 2-3 regions and gain leadership or co leadership.
The relative value of leadership within the predictive model points towards the
second option, where the value of the business in the longer term is
calculated at twice that of the first.
Example 2
In a market where there are no dedicated sales forces, but an agent selling
the network of titles, the package sale leads to a situation where the strong
titles support the weaker ones. By modelling the expected revenues and
costs, and substituting the actual advertising revenue achieved with a
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predicted figure based on the model, the publisher gets a clearer true picture
of the relative contribution made by each title and can take better decisions.
Example 3
Allows the publisher to calculate potential revenue based on the
characteristics of the title. Any significant differentials can be identified eg if
the predicted value is 20% higher than the actual value, there is still
development work to be done!
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Hans-Hendrik Puvogel
General Manager KMC Germany
Have you got the price right?
Hans-Hendrik’s perspective on the core question is that newspaper
advertising is “too difficult to buy and the price system is not right”.
A fundamental cause is the view that:
“From a process perspective newspapers are at a clear disadvantage”,
and :
“no real common industry approach to process issues is recognisable.”
HH believes that newspapers tend to ‘lose more market share than other
media’ for two reasons:
ß Greater dependency on the business cycle than other media
ß Structural issues.
Despite the focus being primarily on the second issue, it was pointed out that
the former is in itself a situation that needs to be addressed and Hans-Hendrik
advised a return to the marketing basics of ‘right product, right distribution and
right price’.
Structurally, traditional newspaper advertising sales channels are expensive
and are at odds with the concentration of media agencies worldwide, who
operate on a low profit margin and with little or no ‘loyalty’ to media owners.
Acknowledging that there are many complex issues impacting on newspaper
advertising today, ranging from regionality, through production, to the
decision-making processes employed by individual publishers, the resultant
business models require a lot of personal contact between buyer and seller.
This demands more experience and expertise from the personnel, who are
consequently more expensive.
Lower volumes per seller than other media, and the fragmented nature of the
sales structures, mean less buying leverage, compounding the issue of high
costs for the advertising agencies. Costs for agencies of planning, buying,
administration and staff training to use press ranges from 200% - 100% higher
than for television.
Given that their issues are customer retention, the inefficiency of the
newspaper advertising process in the context of high volumes at low margins,
and the fact that they perceive using newspapers as something ‘they have to
do’ as opposed to wanting to, what are the business implications of this
scenario?
Hans-Hendrik believes the essentials to be:
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ß
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A reduction in the cost of planning, buying and administering
newspaper advertising campaigns
A recognition of the fact that the business is now less about people
than about processes, “less about good personal buying skills than a
high level of concentration”
Focus on automation and IT integration.
Current practices such as kickbacks are ‘an easy way out’, but they ultimately
encourage ‘maverick’ selling, render prices intransparent and restrict the
ability to manage yield.
Current structures and practices are not only incompatible with a process
driven industry, but also limit international compatibility for clients such as P &
G or Masterfoods.
The answer for newspapers is to reduce the operational costs for agencies: to
improve the processes eg via online booking systems, and to use specialist
service providers.
Several models were introduced to illustrate how publishers could better
support the buying process.
The CARIA television online booking system reduced the number of booking
staff required, and cut administrative costs and workload for both buyer and
seller. The standardisation of the process reduces errors, with further cost
savings, and makes the errors trackable and easier to address and eliminate.
The second model, the German OBS system developed for the magazine
industry was, Hans-Hendrik suggested, perhaps ‘over-engineered’, and
security heavy. It does however achieve the same benefits as the television
model in reducing processing costs and preventing errors whilst allowing the
publishers to keep control of the sales process.
Pricing transparency is a natural development of these processes.
Publishers were counselled to ‘create a new relationship ‘ with agencies, to
‘stop regarding them as the enemy, improve services, develop partnership
without compromising independence’, and to change the sales organisation
into a team of ‘business consultants’ able to match specific agency needs .
Possibilities for developing new sales channels could be:
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Specialised regional service providers covering all media
Using the internet as an automated sales channel
Co-operation with a strong regional partner to provide specialised
services.
The ‘intransparency’ of the pricing practices of many newspapers has led to
inconsistencies, created ‘sensitive’ issues and are inadequate for IT
supported processes.
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Pricing systems are excessively complex, making planning and buying equally
so, as well as error prone, expensive and an impediment to a high level of
service provision.
Change, however, needs to be universal rather than undertaken on an
individual basis if it is to be effective.
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Suzanne Raitt
Vice President Marketing, The Canadian Newspaper Association
The Creative Solution
Suzanne believes:
“A good ad will get noticed irrespective of its position in the newspaper”
Although many of our customers are demanding evidence of advertising
effectiveness, “the best thing you can do is…have a great ad”.
This was the objective Suzanne asserted that could be achieved by following
13 Creative Principles. What is “a principle?” Simply, “something that seems
to work”.
The principles and the examples used had all been researched among
experienced creatives and award winning newspaper advertising.
Keep it Simple.
This includes the context – better one idea communicated clearly than
many…
Use Short Headlines:
Research indicates that as headlines grow, readership declines.
Be Topical:
“ The news is fresh every day, the advertising can be as well.” Examples
ranged from a ‘twin towers’ execution containing the Lord’s Prayer on behalf
of the Catholic Church, to retirement ads and weather based variations.
Use Visuals:
There is extensive research to support the view that ads with visuals get more
readers and more attention. The human memory can store visual images to
an almost unlimited extent.
Experience has also confirmed the pattern of eye movement from centre top
through centre to bottom left, and one recommendation was to place a
headline under the visual to capitalise on this.
Several examples were provided to demonstrate that one dominant visual
works better than many small ones.
The value of the visual in context was clearly illustrated by comparing an ad
with a car in isolation with one featuring a Harley Davidson on the open road.
Ads positioned ‘sideways’ are a current trend in Canada, but research
suggests that even though they can cost as little as half the price of a
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‘traditional’ position, they perform less well unless there is implied movement,
use of colour or sense of mystery.
Food visuals also perform well, irrespective of the brand being advertised, as
illustrated by the Nokia peanut butter sandwich!
Children, celebrities and animals need a clear connection with the brand and
message if they are to viewed favourably!
Appeal to Readers :
Consumers are used to actually reading a newspaper, so ads should work on
this, drawing them in through the headline and building curiosity.
Proven successes are human dramas, the inclusion of sale prices (23% more
notice than those without), and recipe formats.
A high amount of copy does tend to incur a drop in readership, unless the
consumer is in the market for the brand, and it is an expensive item, in which
case they do study it.
Reverse type works as well as regular and headline readership improves if it
is on an illustration rather than a ‘background,’ colour or mono.
Colour Grabs Attention:
Suzanne illustrated the effect of combining colour with a humorous execution
to appeal to the ‘hard to please’ teen market.
Colour works best when it is used to emphasise something humans crave
such as food, sex or beauty.
Colour boosts in depth reading by 60% over mono, compared with a 40% lift
when 2 colour is used, and has a greater impact on the extent the ad is
noticed than size.
Mono ads work best when illustrating benefits, depicting drama or appealing
to the intellect.
Design Big Or Small :
This includes using multiple pages…
That said, a page ad scores a 33% higher noting figure than fractional space
but the best 1/3rd page ad scored higher than a half page…
The most successful small ads exploit shape to enhance the depiction of the
product (eg the eye test for a dental ad!). Poor ones try to pack too much in
and fail to draw the reader into the ad.
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Low interest categories have been proven to need bigger ads. High contrast
generates more attention but white space should not be used at the expense
of other elements of the ad.
Be Distinctive:
Run ads which demand participation, those which stand out from the
competition, and those which build the brand. This last point was memorably
illustrated by a tombstone execution used by an established undertaker.
Create Emotional Response:
Feelings are more important than thought in building brand attitude and this
was demonstrated by number of ads, including one for homeless children.
Humour Works :
Three executions for the same sunscreen, and the fictitious XO beer in
Singapore illustrated this – and suggested that even when the script was hard
to read, the ads were still remembered!
Make The Ad Likable:
To be likeable, means being meaningful, believable, and informative.
Energy, ingenuity and warmth contribute, but irritation, silliness and worn out
themes fail.
Likeable ads score higher spontaneous recall than those that are not actively
liked and can be sued to predict winning ads!
Benefits, Not Features:
Corporate ads are often wide of the mark in this respect. People buy things
that solve a problem or make them feel good.
Link The Brand With The Creative:
In a cohesive ad, the headline, the visual, and the brand work together.
Avoid splitting the visual from the copy in a DPS,as the ad is shown to work
better when both elements are spread across the two pages.
Build The Brand Across Media:
For example, in the press / television mix, print can help the advertiser to
convey extra information, and the consumer to focus on what the brand
actually was. A BudLite example extracted characters from the television ad
and placed them in press ads as ‘announcements’ building on consumer
recognition to draw attention and conveying the information within the press
copy.
Suzanne concluded by highlighting the importance of remembering and using
the differences between magazines and newspapers to inform creative:
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Newspaper ads should ‘grab the moment’
Newspaper ads should be planned for specific days
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ß
ß
ß
ß
Newspaper ads should be local
Newspaper ads should be bigger
Newspaper ads should be serious and credible
Newspaper ads should be detailed: readers expect to read, not flick,
through a newspaper…
22
Kick Zandbergen
Strategic Marketing Director, De Telegraaf
A Case Study : How newspapers can improve response when
included in a multi media campaign
The aftermath of September 11th seemed an appropriate time for a major
multi media “feel good” project.
De Telegraaf were well placed to initiate this. As well as the strength of the
newspaper, the group owns various newspapers and magazines, including
a free daily title, Spits, and SBS Broadcasting, a TV station.
Their external media partners were Nordsee FM, a radio station, and a
magazine, Prive. Douwe Egberts coffee, with the aim of promoting coffee
as “social glue” were a sponsor, together with KPN, a telecoms provider.
The objective was to “build a neutral environment in which brands and
consumers are able to interact through the use of unique content”, and
achieving the individual commercial goals of the partners.
The concept was a vehicle for the Dutch people to submit their individual
”Christmas Wishes,” to vote for the best, via a range of media options and
for the event to culminate in a series of Christmas TV broadcasts where
the winning wishes would be fulfilled. The entire event would be
extensively cross promoted in the various media platforms.
The sequence of media activities was as follows:
ß Opportunity to submit Christmas wishes via a dedicated internet
site, letter or phone.
ß From 1.12.2001, the website “advent calendar” is operational, with
a ‘gift’ for users who open the door each day. Press was used to
drive traffic to the site for this purpose.
ß Online voting takes place for the best wish.
ß Three “Wish You” TV broadcasts fulfil some of the most popular
wishes.
ß Final Christmas Special TV broadcast, fulfilling the wish which
received the most votes.
ß Final New Year’s Eve publication of all the wishes in De Telegraaf.
Promotional activities in all media pulled the Dutch people into the event at
the outset to make their wishes.
The “Advent Calendar” provided such prizes as the chance to broadcast a
special message on the side of a building, or have a wish submitted on
voicemail broadcast on Nordsee FM. Thus the sponsors were an active
part of the event.
23
As the event developed, Prive, the gossip magazine, ran a feature every
week about the wish fulfilments covered in the previous week’s TV
programme, extending coverage and human interest.
The Top 25 Wish List was vandalised by ‘hackers’ (via an adult website!),
with the votes for a terminally ill seven year old boy being dramatically
increased as a consequence. The trespass was dealt with, and the
organisations made sure that, even though the boy could not win, he was
given a special Christmas.
The Christmas Special used Lapland as the meeting point for the two
‘elderly’ sweethearts who had been chosen by the people of Holland to
have their Christmas Wish come true.
The results were excellent.
ß
ß
ß
ß
ß
The first three programmes, although broadcast late at night,
attracted 425,000 viewers.
1.6 million people watched the Christmas Special.
The web site recorded 5.5 million page views, a combination of
400,000 sessions, where an average of 14 pages per session were
viewed.
11,000 wishes were submitted via email and more than 1000 by
phone.
There were thousands of votes for hundreds of wishes.
The only slightly disappointing result was the number of VRS and SMS
calls.
That said, 12,500 Euros were generated via this channel, and 5,000 Euros
by messages from other routes.
The level of awareness recorded was pleasing, particularly because of the
appeal to younger age groups.
Mr Zandbergen attributed the success of the broadcast finale to the “hype”
created by the 6 weeks of extensive cross promotion, and praised the part
played by press in this.
The promotion generated additional revenues of about 600,000 Euros.
This revenue simply would not have happened without the creation of the
platform. An added bonus was that, because it was sponsorship and
associated revenue, there was no conflict with conventional paid
advertising time.
`
24
German Luis Buceta
Managing Director, Publicitas Internacional SA
International Advertising Sales : How To Create New Business
To achieve this objective, it should be remembered that the media plan is
an extension of the marketing plan, and that, as such, a creative strategy
is required.
In an environment where there are more newspaper and magazine
advertising opportunities than ever before, and where business cultures
are very different, the basic question “Why should this client do business
with us?” needs to be answered.
This organisational chart of the Spanish Tourist Board’s marketing
operation illustrates the complexity of the international planning process. It
highlights the numerous different locations and parties who might have an
input into the planning. The seller must be able to identify how and where
to influence the process to have an effect. Not only that, but the ‘blocks’
that tend to complicate the communication between the client, the agency
and the sales operation need to be overcome before the media plan can
be influenced.
Even in the presence of so many external factors to be managed, the
single most basic but most crucial area that must be addressed is the
communication between the publisher and the sales organisation.
25
To achieve the strong voice that every publisher needs in the market, the
salesperson needs to be professional, able to develop effective solutions,
to provide PR support and to sell creatively. This in turn requires support
and training from the publisher. Both parties need to have an input into
decisions and together they can construct tailor made strategies,
incorporating PR, events and sponsorship, for each market.
Two case studies demonstrated how these principles can work in practice.
Nihon Keizai Shimbun, the Japansese daily known as ‘Nikkei’, have more
than 9 million readers in Japan and are a ‘must’ to hit Japanese decision
makers. In the Spanish market, they had no clear position or sales
proposition. Their prices were excessive by Spanish market rates and they
had no lobby access to decision makers there.
The challenges for Publicitas were:
ß
ß
ß
ß
To position Nikkei as the unique partner to communicate with
decision makers in Japan
To develop acceptable pricing options
To create a brand
To create a lobby in the Spanish /Japanese community
The brand identity they developed was “Discover the point of reference in
Japan”.
They conducted “Special Surveys” on, initially the Spanish, then the
Catalan, economies, which served as a sales tool to overcome the pricing
issue.
They developed the Nikkei conference as a forum for the publication to
reach decision-makers in Spain. The first was sponsored by the Chamber
of Trade and the Spanish government, and the second by the Catalan
government.
Nikkei is now established as the unique partner for those wishing to do
business with Japan.
G.D.A (Grupo de Diarios Americos) have 14 papers in 12 countries
throughout Latin America. These can all be reached via one contact point.
As well as being faced with a lack of confidence in the Latin American
economy, the group had no brand awareness in Spain, and struggled to
sell the pan regional opportunity.
The branding task was addressed by the development of “Pulso
Latinoamericano”, a twice yearly publication summarising relevant
editorials and issues and providing an editorial framework for Spanish
clients.
26
They hosted a Latinamerican Media Breakfast in association with the
Spanish trade publication, Revista Anuncios, and as for Nikkei, achieved a
similar high awareness among media agencies of the brand and its
position and proposition.
Mr Buceta’s closing point was the reiteration that the two keys to success in
developing international business are:
ß
ß
two way communication between publisher and representative
the development of a total marketing package.
27
Vladimir Makarikhin
Business Development Director, Extra M Media
How CRM can be used to launch products
“1 Million Euro Sales Increase in Weekly Freebie Due to Successful
Launch of New Telephone Directory!” was the arresting introduction to this
presentation.
From a start up investment of $10,000 by 3 journalists, in 10 years Extra M
had grown to be a major advertising publication, with a 3 million weekly
print run, producing 128 page publications 3 times a week in 5 major
Russian cities, and achieving a turnover of 145 million euros.
Finland was the source of the most accessible print operation capable of
handling the publication, so distribution began with 40 trucks making the
journey from there back to Moscow. Understandably, such a distribution
method was expensive, so $40 million has been invested in a print
operation which is scheduled to begin production next year.
This will allow Extra M to produce more than 5.5 million copies, in colour,
A3 size, running each edition at 16 – 40 p ages per week.
Distribution is 80% hand delivered through home mailboxes, with a further
10% through sales displays, 5% via the transport system and others
through offices, restaurants etc.
Because many apartment blocks in Moscow are traditionally locked and
inaccessible, the detailed work done on establishing the distribution
network allowed the company to build a detailed database.
Their unique distribution system was the catalyst for a distribution contract
for a trade catalogue with a print run in excess of 1 million copies, which
now provides 10% of Extra M’s turnover.
For 7 years after its launch, Extra M prospered, but in 1998, financial crisis
in Russia was the backdrop for a serious decline in turnover – from 145
million euros in 1996/98 it fell to 38 million euros.
The economic situation severely hit advertising revenue and threw into the
spotlight the company’s dependence on one single product and its weak
sales operation which was generating no new business. Competition, the
fact that the product was mono, and the failure of a number of costly online
initiatives also contribute to the slump.
The crisis however precipitated positive change:
ß
ß
The product was redesigned to better deliver what its customers
were looking for.
The editorial content was editionalised for major Moscow regions, to
open the product up to more local advertisers.
28
ß
The sales department was overhauled, with new staff recruited and
thoroughly trained.
However Management wanted a new project, and the shareholders and
investors stipulated that it was to break even within 12 months.
Investment was to be limited – 1 million euros - and revenue was to be
generated solely from advertising.
Extra M took advantage of the merger of two local directories and the
resultant redundancies of a team of good salespeople to recruit staff and
set up a new Moscow telephone directory.
Not only did they launch the core product, they also created a CD Rom
database from it and a number of additional B2B and B2C guides using
the databases developed by the core free newspaper.
By harnessing these existing resources, no significant financial investment
was needed. Indeed, the investment of 1 million euros was recouped by
the end of Year 1.
Existing advertisers in the newspaper were offered a package with the
directory included and most took it up.
Similarly, new clients were introduced to the newspaper via the directory.
An additional 60 sales reps were recruited to create a call centre, and
introduce a 3 step sales process whereby the Marketing team source
potential leads from competitors, the call centre make the initial contact
and set up appointments and the salespeople make the calls.
The company now has 10 products instead of just one, including:
ß
ß
ß
ß
ß
a 200 page phone book
4 consumer guides (all prepaid)
3 B2C telephone guides
a searchable website based on the telephone directory which
enjoys about 1500 hits a month and was crucially a success
following the earlier online failures
a CD Rom of the telephone database, which may lose some money
but adds value and audience for advertisers.
From a sales perspective, they have:
ß
ß
ß
ß
ß
2000 new advertisers
80 new sales people
a call centre
a Telephone Directory sales team capable of developing other
projects
the ability to develop combined media plans for VIP clients
29
Financially, from an investment of 95,000 euros, they have generated
sales of 1 million euros, and an additional income of 50,000 euros plus a
$1/4 million profit after 12 months.
The proof of success? An offer from a competitor to buy the product for $1
million….and turned down!
30
Tim Greve
Managing Director asdirekt
Hard Working CRM
CRM is ”nothing but hard work.” It is hard work to gain new, profitable
customers. It is hard work to keep them. To improve their margins, at the
same time as improving quality and decreasing costs is a really tough nut
to crack!
Tim illustrated this by explaining the scale of the Axel Springer
organisation, with its 4.3 million contracts, 300 staff and more than 10
million customer contacts.
The model below summarises the process:
(SLIDE)
The whole is underpinned by process management.
This Cost Per Contact model, juxtaposed with Average Order Value
illustrates the relative importance of each type of call, and is the model for
handling the business.
Online sales may be cost effective, but the Key Account Management role
cannot be fulfilled by on line or even by call centre servicing, so the
answer is to segment the customer base and to service it in accordance
with its value.
By segmenting the customer / contact base on the strength of their value,
the optimum method of handling the account can be determined ie bit to
bit, ear to ear or face to face, or a combination of these. They will also
determine the nature and key activities of the sale units assigned to each
group of accounts. The model ensures that, “as channels develop along
the value chain, cost efficiency improves.”
31
The implementation of such a model brings with it the ability to assess
sales effectiveness as illustrated in the chart below.
For example, to measure the number of orders alone is misleading, as
high volumes may go hand in hand with cancellations.
Considering the time needed to secure the sales results ie comparing
turnover with the relevant investment, leads to the conclusion that the
answer to efficiency is to “align the costs of sales to the margin of the
opportunity.”
Given that the implementation of such measures may quite a significant
step for many publishers, Tim made the point that the very act of starting
to measure would in turn stimulate changes in behaviour, and that some
measurements are better than none at all!
Such an undertaking would entail a considerable amount of change
management, and require training. It is imperative to measure and give
feedback on the results achieved.
Moving on to address the issue of customer service, three key benefits of
this “costly necessity”, “the ugly sister of sales” were highlighted:
ß
ß
ß
Reduction in marcoms spend if customers are retained as a result
Securing leads for cross selling
Teaching us about customer expectations.
The imperatives for service are “accessibility” and “responsiveness.”
32
It was advocated that companies should go to their customers to research
their own quality of service. The concept of “customer parliaments”, where
customers are encouraged to identify their complaints about the service
provided, and then to assess them in terms of frequency of occurrence
and importance, was introduced. This method helps to focus on the most
important issues.
From the example cited, the publisher isolated the key issue as lengthy
queue times for incoming telephone calls, and was then able to address it
through internal measures and actions.
The process of using all incoming calls and service calls as sales
opportunities was outlined. If the call is a complaint, it should be resolved
and then a repeat ad offered at a discount price. The call centre should
then make a follow up call to confirm that all is well. If the feedback is not
good then at least you retain the opportunity to address the problem
proactively, rather than lose the business because the advertiser believes
you are useless. If the feedback is good, then the sales opportunity is
enhanced by the customer feeling cared for.
Incoming information calls should be responded to with an ad offered at a
discount rate.
An order for one title is automatically offered a package rate for adding an
additional title.
The final issue to address is that of process management.
Improving the quality of the process saves time, which in turn saves costs.
This translates into a number of areas:
ß Improved call conversion means less ‘double work’ and reduced
marcom spend
ß Fewer mistakes mean fewer complaints and less churn
management
ß Faster workflow speeds turnaround and reduces headcount costs.
Crucial to the success of such process initiatives are the people who
“make things happen.” It is important not only to train staff, but also to
ensure that they understand the objectives and receive feedback on the
results of what is being implemented.
The asdireckt process includes lectures by business professionals, and
workshops where staff can apply the principles to the reality of their own
business. One such successful outcome was the re-engineering of the
system for handling faxes and written orders, whereby thanks to the input
from the staff, a more time and cost efficient process was implemented
33
The most effective way to sell such initiatives is on the basis of timesavings to generate additional sales, thus overcoming the fear of risk
inherent in change.
34
Ross Biggam
Director General Association of Commercial Television in Europe
“New TV Advertising Techniques”
Despite the long term changing shape of the television market, Ross
asserted his conviction that “mass audiences will continue” and that
television, with its 3.5 hours daily viewing and 99% penetration, will
maintain its position as “the only real mass medium to advertisers
globally.”
Fragmentation is “mathematically inevitable,” since all television markets
began with 100% monopoly! By the same token, declining audiences are
also inevitable, as it would be difficult for them to deliver more!
The issue of advertising effectiveness will become less “cutting edge” due
to a climate of increasing cross media ownership eg of 20 TV companies
represented by Ross’s organisation, 11 own newspapers as well.
The external threats are stronger than those that they pose to each other.
The hope for the future lies in the ability to grow new audiences and to
reach existing ones in different ways.
On this basis, the ‘new techniques’ deployed by broadcasters should:
ß
ß
ß
Reach different targets
Use new technology
Combat audience fragmentation.
A number of different executions were demonstrated.
ß
Split screen technology: eg a superimposed ad in a box onscreen,
or a scrolling commercial message.
ß
A ‘mini soap’ (eg McDonald’s) where the programme presenter
delivers the commercial message, and which is not counted as
advertising minutage.
Such messages are particularly appealing to a young audience, but
suitable only for certain types of programme.
Results from Italy and Germany where these techniques are already
widely used are positive: 79% of viewers regard it as being “original,
innovative and preferable to conventional ad breaks.”
Spontaneous and assisted recall is also higher than for conventional
advertising, in one case by as much as 20 percentage points.
ß
‘Virtual’ technology, eg a billboard at a sports event being
superimposed with commercial messages.
35
Such ideas are still at an experimental stage, and all to date are in the
context of sports broadcasting, as the obvious question of just how
intrusive the message can become without losing viewer acceptance, is
still unanswered. Virtual technology also involves a legal and contractual
minefield.
ß
Interactive advertising was presented as offering television the most
extensive possibilities to deliver what to date has been the domain
of competing media.
An Audi interactive promotion illustrated how TV could become the
medium for delivering detail comparable to a sales brochure, and an
Orange execution was shown to be easily accessed using the familiar
teletext navigation buttons.
The Eurostar ‘Paris’ campaign was developed to allow fare searches,
online booking, and visual travel details as extensive as brochure content.
Of the four techniques presented, interactive offers the most viable
potential to television broadcasters and advertisers.
None of these ground-breaking techniques is without problems. There are
of course regulatory issues, such as acceptable durations, labelling and
separation of programme and commercial content.
Virtual sponsorship is banned in some countries, restricted in others, and
is simply not viable for pan European use.
The fundamental principle that “advertising and programming should be
kept separate” is becoming much harder to follow, given that the
interactive stream effectively takes the viewer away from the programme
content. They are strictly speaking no longer a viewer so regulations do
not apply. Yet they are still a consumer, so protection is still necessary.
How do we define separation?
The debate is gradually moving from “keep the viewer from seeing too
much advertising” to “inform the viewer about advertising.”
Regulation of different media will over time start to converge, on the basis
that to the viewer, video-streaming etc looks just the same as conventional
broadcast.
The biggest threat to broadcasting, and indeed to newspapers, are state
funded competitors who demand protection and then use funding to grab a
share of the digital and online opportunities. Such competitors are not
answerable to shareholders and can put losses down to Research &
Development costs.
36
“How can we persuade consumers to pay for content when others are
giving it away for free?” .
37
Danny Meadows Klue
President, Interactive Advertising Bureau
Best Practice in Online Advertising
Online is a “fundamental new medium but not an easy one to embrace.”
September 2002 was a milestone in internet advertising terms, as it was
then that the European audience overtook the USA, allowing global media
businesses to see it on an equal footing and start to allow a global focus to
take place.
There are currently 185 million users in Europe. Just under half the
population has internet access, rising to around 60% when ‘at work’
access is included. However not all users are ‘equal’ as usage requires
familiarity. Jupiter estimate that it takes about 2 years for a user to become
‘high level’ ie to use the internet for ecommerce. This, crucially, means that
this year is the first time that those ’experienced’ users are in the majority.
The dominant trend in internet usage is currently ‘more users, more time,
doing more’ and this looks set to continue for the next five or six years at
least.
There has been a close relationship between newspapers and the internet
since 1994, and the print medium “pioneered the quality of internet
publishing.” The upsurge in the usage of news internet sites in the
aftermath of September 11th was illustrated.
Email, searches, instant messaging etc are all commercial services, and
all free to users, therefore they must be funded by either advertising or
ecommerce, and that the biggest challenge for the industry currently is
“safe online shopping.” The Amazon model is notable for its effectiveness
and as a driver of value, and the range of examples available point to the
fact that we do use the internet for everything.
What are the implications of the internet for the advertising industry?
Measurement is most likely to follow the TV route of Reach and
Frequency.
While the internet currently still delivers an attractive audience profile, this
will ultimately converge with the population profile as a whole.
A number of ‘myths’ about internet advertising were dispelled:
Myth 1: “Web advertising only works if the user clicks”.
How many times have you clicked on a poster?
Myth 2 : “You can’t measure the brand effect of an internet ad”.
It is done in exactly the same way as it is for other media.
Myth 3: “The internet replaces other channels”.
38
The medium is best defined as “ the brand action medium”.
It can offer brand building but it can also convert, generate response, and
support press and TV schedules – as such, integrated web advertising
encourages customers.
Internet Classified was defined as being a combination of search engines,
performance listings, classified sites, yellow pages, newspapers, business
listings…
The ability of the internet to deliver reach, was illustrated by the example
of BA, where the web was integrated with TV press and outdoor. In one
day, the web delivered 2.8 million users, leading to the conclusion that “the
numbers can match modest television campaigns.”
Milward Brown studies show tangible shifts in brand perception and brand
attributes resulting from internet campaigns. A study for Dove, where the
internet accounted for just 2% share of voice for the schedule, was notable
for showing that the internet could achieve a bigger effect for the same
money than other media. (Purchase Intent Slides) –
Given that marketers are still getting to grips with the medium, the
questions of “where should the money come from”, and how should the
media mix be optimised to include the internet are in the process of being
answered. The Dove study suggests that TV is the main casualty where its
incremental effect declines with the number of exposures.
Diary research has been undertaken to assess what impact the internet
has had on media consumption. It shows that the internet is currently
accounting for the 3rd largest share of media time – but only among
internet users.
Because of the intrinsically unique way in which the medium is consumed
we should think in terms of dual consumption rather than in purely
competitive terms.
As far as the impact on advertising revenue is concerned, Forrester predict
that the internet will take about 5%-6% share within the next 5 or 6 years,
an impressive growth rate.
The industry, under the auspices of the IAB have planned, completed or
are underway with, a range of standardisation initiatives throughout the
world. That the medium should still be having to get to grips, albeit quickly,
with such fundamental issues as Data Reporting, Ad Shapes and Sizes
and Auditing Guides, highlighted its relative youth, making its progress and
prognosis all the more impressive.
39
Constantine Kamaras
Vice President, Interactive Advertising Agency, Europe
The Publisher’s Perspective
Having reiterated a number of the previous speaker’s comments on
internet trends, Constantine went on to make a number of predictions
about how the medium and its advertising will develop.
Growth in online usage will be driven by both new users and by existing
users moving to broadband.
“Communication and entertainment will be the dominant reasons for use”
This does not mean that news sites are not viable, but that they are a
‘niche’ within the web environment.
It may become difficult to differentiate between media using conventional
definitions eg web TV, a tablet PC
Whilst advertising is changing, the pace and the extent are less than is
generally though to be the case.
Advertising will “follow the audiences,” albeit slowly. This view was
supported by the comparison between the internet’s 11% share of media
time in the USA and its 1% - 3% share of revenue.
Whilst advertising growth rates will be slower than to date, in relation to
other areas of communications spend, interactive will be the fastest
growing element.
Planning and buying will follow television measurement models, based on
Reach, Frequency and GRPs. The medium will however require an
amalgam of ‘TV and print selling’ as the actual ads will increasingly
become large ‘blocks’ similar to conventional press ads. At the same time,
targeting will reflect TV dayparting.
“Pay per performance” trading will increase slowly, driven in particular by
advertisers requesting that agencies remunerate them in this way.
Direct, permission based email will further improve targeting opportunities.
The web is similar to newspapers in a number of ways:
ß Both are selling an audience
ß Both sell on a CPM basis
ß Both sell space
While both will rely on advertising revenue for the foreseeable future, there is
a distinct difference in the extent to which this applies.
40
Despite attempts to secure payment for services, advertising still accounts for
80% of web revenues in the USA. Even the Wall St Journal still relies on
advertising for 2/3 of its online income.
This, combined with budget restrictions, inevitably places the balance of
power with the advertiser.
The fact that 80% of ad spend goes to the Top 20 sites, where newspapers
rarely feature, was attributed to the intrinsically different nature of the way in
which the two are consumed: “When we buy a newspaper, we buy the whole
produce. When we go online, we do something specific”.
Audience data for the internet is “poor”, especially in relation to its potential.
This, and other issues need to be addressed by the industry:
ß
ß
ß
ß
Privacy
Dayparting skills
Overcoming ad blocking software, either by making the ad delivery
more relevant or having it used only block the most intrusive and
annoying ads.
Disintermediation. This is probably easier to handle online, as
companies spend a lot not just on advertising but on their own web
sites and use off line advertising to drive traffic to it. The dotcoms “shot
themselves in the foot” by spending significant money in print.
Addressing the “power balance”, the following were identified as the key areas
publishers should work on:
ß
ß
ß
ß
Creative content: No advertisement appears in a newspaper without
having been seen, but it is perfectly possible for this to happen with a
web execution, and how does one therefore manage content to prevent
user alienation and long term damage?
User data: whose server statistics should invoicing be based on, the
publisher’s or the buyer’s? They are never identical…
Pricing
Targeting: The need will grow and the technology permits it to improve.
Audience fragmentation may mean lower revenues initially but they are
also an opportunity to generate increased revenue per contact. This is
also an issue for newspapers, how do they go about selling different
content to different audiences?
Dominance of the newspapers should create opportunities for web
dominance. One recommendation for newspapers is to ensure that their
websites offer “extensive targeting opportunities.”
The strategy of being, “the only ‘must’ in the region” was recommended. This
probably requires alliances with broadcast competitors, to maximise online ad
market. Local markets generally offer less volatility than national ones.
41
Mr Kamaras raised the point of “audience value”, and the way in which the
web forces one to see that not everyone in the audience has the same value.
A number of policy recommendations closed the presentation:
ß
ß
ß
ß
ß
ß
Know your audience
Direct email looks to have a buoyant future.
Do not move away from CPM. There is too much outside the
publisher’s control to move towards other pricing methods.
US research shows that users do not have a problem with online ads,
but that they do object to pop ups.
Different media are still best served by having dedicated salespeople,
but they need to be capable of working together to develop a multi
media deal.
Classified must be a priority as it is bread and butter revenue. The best
route to success is to extend print dominance into web dominance.
42
Sally Winfield
Group Classified Director, Associated Newspapers
Motivation : Art or Science?
“Leadership is the art of accomplishing more than the science of management
says is possible.”
This is the key to motivation.
Bolstered by liberal supplies of popcorn, delegates were treated to an
intriguing 20 minute film about the progress of Sir Ernest Shackleton’s voyage
to the Antarctic, and the principles he employed to ensure that, given the
conditions and forces they had to contend with, the expedition was as
successful as was humanly possible.
Perhaps the whole expedition, and Shackleton’s approach to it, can be
summarised in Ms Winfield’s exhortation to:
“Be bold in vision and careful in planning. Try something new but be
meticulous enough in your proposal to give your ideas a chance of
succeeding.”
The Antarctic expedition experience teaches many other lessons present day
commercial managers can apply to assist them in motivating their staff in both
adversity and success.
Shackleton’s recruitment process, albeit unconventional, was creative and
geared to getting exactly what he knew was needed to carry out the task.
Recruit the expertise and the talents you lack yourself and do not be
threatened by this.
“They will help you stay on the cutting edge and bring distinction to your
organisation.”
Ensure that your No. 2, your most crucial appointment, is an individual who
complements you, and that they are 100% loyal without being a ‘yes’ person,
and that they can work with others.
Work on the principle of encouraging open debate, with honest input until a
decision is reached. At this juncture the debate is over, and loyalty is
displayed by putting those decisions into practice.
By keeping his team cheerful and positive, Shackleton reaped the rewards in
terms of their efforts, their “loyalty and camaraderie”.
He left no one in any doubt as to what their duties were, and how they would
be rewarded and he established order and a clear routine. Hierarchies were
abolished, as were inconsistencies, or any of the imbalances in treatment
which make even the favoured feel uncomfortable.
43
Communications were clear and the work was challenging. Everyone was
made to feel that they were making a valued contribution, and given feedback
and the opportunity for input.
What opportunities do we give our staff eg discussion forums, a suggestion
box, or even just taking the time to talk and to listen regularly?
If the team are not bringing problems to you, then you have lost the role of
leader, either because you are perceived to lack concern or because the team
lacks confidence in you.
Shackleton’s chosen title, “The Boss” achieved the necessary balance
between clear and absolute authority and sufficient friendliness. He shared
conditions with his men, whether it was work, food, clothes etc
This ensures that the team gain their expectations through the behaviour of
the leader, rather than just responding to words.
At the same time, the position of the leader should never be forgotten, either
by that individual or the people working for them.
Accept that with this responsibility goes the appreciation that there comes a
time when the discussion and compromises have to stop to get the job done
properly. If that on occasion means making someone mad, then so be it.
Have the confidence to get under the skin of a problem, rather than skirt
around it in case you do not like what confronts you: You will thus able to take
well informed decisions and actions.
This requires you to have “an insatiable demand to be in charge of the
information flow.” This is the only way you can be up to speed on all that is
going on within the organisation.
Remember that it is not only acceptable, but also essential to success, that
you change your mind if things are not working out according to plan. This
means having contingency plans and being able to provide a logical
justification for them. Know the possible consequences of each option and
keep your eye on the ‘big picture.’
No matter what, do not lower your standards, as the final outcome depends
on “the best efforts of the entire group.”
When crises struck, as they did regardless of the meticulous planning that had
taken place, Shackleton at once explained the situation to the team, took
charge and ensured that a new plan of action was implemented. Follow his
example, and display absolute confidence in the outcome of whatever action
is being taken
Nor did Shackleton ever look back, but moved on to focus on the future, with
past experience only having a value as something to be learned from.
44
Whilst he was not afraid to take the responsibility for the order to ‘abandon
ship,’ when the time came, he scarcely needed to as he had kept his team so
involved throughout that they knew what was coming.
The motivation to succeed and survive comes from the top, and that while
bonuses, incentives etc play a part, the inspiration for people to do their best
comes from “clear communication of what needs to be achieved and how to
do it.”
45
Jim Chisholm
SFN Project Director, WAN
Shaping the Future of the Newspaper
The advertising elements of the SFN project provided a perspective on media
consumption and advertising performance worldwide, presenting conventional
measurements in original and practical ways.
Comparing the level of newspaper sales with the size of the population it
serves can benchmark a newspaper’s performance.
In the USA, for example, which we tend to view as being a strong and mature
market, newspapers sales are only 260 copies per 1000 population… by
comparison, Norway sells 700 copies per 1000 population. Any publisher can
therefore compute their own performance within their marketplace, and
compare it either with the averages for their own country or globally.
A comparison of average daily title sales by country was followed by
consideration of newspaper advertising shares by country, illustrating the wide
differentials eg Finland at 58% and Portugal at just 10%, and demonstrating
that over the last 5 years, newspapers have, with some exceptions, ie
Netherlands and Denmark, increased share of spend.
To benchmark advertising revenue, publishers can divide advertising revenue
by circulation to calculate advertising offtake per copy.
The results put pure circulation comparisons in isolation into a constructive
business context. For example, Japan’s high circulations, when related to
advertising revenue, show a low ad offtake, whereas Ireland, with
considerably lower circulations, enjoys a much higher ad return per copy.
Comparing both ad offtake and newspaper sales with GDP provide further
benchmarks and illustrate the very different business mixes characterising
individual countries. These range from the USA with high advertising revenue
but low readership, to Japan and Norway with high readership and low
revenue.
Ad revenue as a % of total business, or the newspaper’s variance in
advertising share, are also measures publishers can use to relate their
performance to national averages.
The Goldmann Sachs correlation between advertising revenue and GDP was
taken a stage further and used to demonstrate how television tends to
predominate in poor countries, but to have a low share in richer ones.
The chart below plots the relative growth forecasts for advertising and
circulation by country over the next five years.
46
Industry overview
Revenue forecasts for next
–byfive
lineyears
(excludes the impact of recruitment drift)
20
Advertising (real prices)
Netherlands
Finland
15
Italy
United Kingdom
Germany
Portugal 10
France
Belgium
Luxembourg
Austria
5
Spain
Sweden
0
-6
-4
Denmark
-2
Ireland
0
2
4
6
-5
-10
Circulation (flat revenue)
Shaping
the Future
of the Newspaper
Source: World Press Forecasts
Veronis Schuler were recommended as a source of forecast data, because,
as a merchant bank, it is in their business interests to get the forecasts right
rather than to sell reports about them!
Their analysis of the consumer pound spent on media consumption indicates
that growth in internet consumption will continue until at least 2006.
However the internet is rather more about this growth in consumption than
advertising, with a flattening in advertising share being predicted. Indeed the
growth in print advertising share is forecast to be at least as strong as that of
the internet.
A further indicator of the strength of press as an advertising medium, is a
comparison between the money spent on advertising per hour consumed,
across the internet, television and press.
This model shows that press revenue is 10 times that of either of the other
media.
The relative recent strength of the internet is illustrated by the fact that, during
the later part of 2002, it generated more than twice as much revenue in
relation to the size of its audience as television did (£15/000 impacts vs TV
£6.80/000 impacts) and a 4% revenue share against a 2% audience share.
The preview of “Added Value Advertising”, the next report in the SFN series,
due for publication next month, asserted that this is “all we can do for our
customers other than place ink on paper. Our role is not to put ink on paper.
Our role is to deliver customers to our advertisers.”
47
It made a number of practical recommendations to assist the publisher in
improving the returns on advertising investment to our customers.
Jim illustrated how we can add value utilising the ideas contained in the
model below.
Added value advertising
Giving advertisers a better return on their investment?
Markets
Markets
current
current
•
Increase
advertising
effectiveness
Audience pricing
new
•
Database services
•
Targeted
distribution
Internet
distribution
•
•
Improve service
levels
•
Direct mail
•
Features and
supplements
programme
•
•
•
Leaflets and
inserts
•
PR
POS and design
services
Customer surveys
•
Mobile and email
services
• Database services
• Targeted distribution
• Audience pricing
• Internet distribution
• Improve service levels
• “Out-of-market”
distribution
• Direct mail
• Features and
supplements programme
• PR
• Leaflets and inserts
• Customer surveys
• Segmented products
• Mobile and email services
new
Products / services
• Increase advertising
effectiveness
new
new
Products / services
current
current
•
• POS and design services
Shaping
the Future
of the Newspaper
Lord Leverhulme’s infamous “half of my advertising works…” quotation was
put into a more realistic context, with the assertion that it was actually more
likely to be about 4%!
So, how do publishers improve advertising effectiveness?
Using the UK’s leading popular daily, The Sun, as a practical example, Jim
showed how tracking readership by page could better inform advertising plans
and generate better returns. The Sun is a bastion of male chauvinism…but
readership tracking shows that the female readership of its news pages is
higher than the male readership.. and that male readership wins on the sports
pages ... where there are no, or few ads…
It is a fact of life that levels of advertising readership are lower than those for
editorial, but this is not a negative for newspaper advertising: if everyone who
read the paper went to the supermarket advertising there, it would be
mayhem! The job of newspaper advertising is rather to convert those
consumers “ at the margin” into buyers.
One definition of “advertising effectiveness” is “the effectiveness of the
medium x the effectiveness of the advertisement.”
48
Many advertisements, even those developed by blue chip agencies, do not
work. This is not a reflection on the medium, but on the creative treatment.
Given 5 traditional levels of measuring advertising effectiveness, the model
below illustrates how often it fails because of the discrepancy between what
the advertiser wants, what the buyer wants, and what we actually give them.
The current model would, it was argued, be more effective considered from a
new perspective:
Added value advertising
Measuring advertising effectiveness
Five levels of measurement
Average issue readership
Current international measure of
readership.
Issue specific readership
Readership indexed and priced according
to actual daily circulation.
Page readership
QRP projects – Denmark, Netherlands,
Norway.
Advertisement readership
Media buyers increasingly undertaking
their own measures of press
effectiveness.
Advertisement response
?
Shaping
the Future
of the Newspaper
49
“We need to change the way we are thinking. The number one job we have is
adding value to our advertisers.”
Using an eVolt/Newspaper Society study to illustrate the principle of more
meaningful measurement (the effect of ad size on readership by category),
Jim explained how such a ‘reading and noting’ study could enable us to
provide advertisers with practical regular reports showing what their
expenditure has actually delivered for them:
ß
ß
Their exposure in terms of readership traffic, reach and frequency, and
actual advertisement readership.
Their share of audience at both the level of exposure and actual
readership.
This added value service gives us an excuse for meaningful client contact. It
may of course call into question the quality of the advertisements.
When two advertisements for the same type of product produce a winner and
a loser, telling the “loser” which execution has not worked “is about the best
service we can offer to our advertisers.”
We should be going back to advertisers and talking to them about what has
and has not worked if we wish to retain and develop them.
On the question of pricing, the present practice of measuring the readership of
“the whole book” was likened to a television broadcaster telling us that 99% of
people watch television…
We need to start to measure who is reading what and when, enabling both
publishers and customers to assess the scale and the quality of the audience.
QRP tracks readership traffic and enables publishers to justify price on the
basis of not just the size, but also the relevance, of the audience.
Publishers should actively consider the points of least customer resistance
and work on their margin of need, the pricing options that will best develop
frequency, and the basis for their perception of value ie the ad or the medium.
We should make the most of topical advertising, as did a publisher who
discounted for topical ads in the summer when business was low. Not only
were they offering a service, but the chances were high that the responses
would be better because the material was topical.
Jim then asked whether or not we service our advertisers “according to their
needs…or ours?” and gave some suggestions as to how we could implement
the latter.
Features and Supplements are a key source of revenue and three possible
approaches to planning them were illustrated.
50
The recommendation was that newspapers adopt a ‘market driven’ approach.
A suggested approach to this is to draw our customers into the planning
process.
Select one sector of the population eg working women, and invite advertisers
from different business sectors eg a Motor dealer, an Estate agent, and
various type of retailer, to a forum to discuss how the segment can best be
reached. Because the businesses are not competing, they are more likely to
offer ideas. They have an interest in the success of the initiative, so are more
likely to support it, and the venture is perceived as being better service from
the newspaper.
What about relationship between topic readership and advertising revenue?
The categories accounting for the highest shares of advertising revenue do
not necessarily correlate to those accounting for the highest share of
readership. The converse is of course also true.
% of advertising
Added value advertising
Relationship between readership and revenue
30
Recruitment
25
20
Property
15
10
Entertainment
Motors
Business
Travel
Health & Fitness
Technology
5
Fashion
Food and drink
Home/DIY
Gardening
Cosmetics
0
20
Shaping
the Future
of the Newspaper
25
30
35
40
45
50
55
60
% readership
It is possible to calculate the real value of a read copy of the newspaper in
terms of the advertising revenue it generates by category.
This readership / revenue correlation is the basis for product tailoring.
Everyone wants “ less done better,” and that includes advertisers and
readers.
51
We know that it is the copy actually read that is valuable, so if a publisher
can tailor the product, rather than getting it to lots of people who don’t want it,
they should be able to generate more revenue and reduce costs.
They serve the advertisers’ and readers requirements as well as deriving
obvious bottom line benefits.
The challenge for the publisher is to find “the most cost effective way of
merging relevant content and relevant advertising.”
This means tackling three core issues:
ß
ß
ß
Address level distribution
Reader interest knowledge
Pricing
Are we fully exploiting the capabilities of technology to develop leaflets and
inserts?
A case study from the Netherlands, where 8% of homes have a “no” sticker to
prevent unsolicited Direct Mail, a newspaper publisher carried a version of a
customer’s leaflets in the paper, together with coupon offers. They were able
to sell the leaflets, overcome the 8% missed distribution for the advertiser,
and capture data on consumers.
“Post it “ technology offers a revenue opening and a stand out opportunity for
advertisers.
The technology also allows the publisher to deliver niche products and
generate premium priced advertising on the back of the targeting quality.
Non readers have a value to advertisers and publishers can link advertising
with other data to improve service.
For example, when a recruitment ad for a Financial Director is published, use
the subscription prospecting database to identify existing Financial Directors
and send them a copy of the newspaper containing the ad. Non readers get a
relevant product sample, the advertiser gets an added value service and
extended reach, increasing the response opportunities.
The Bain model clearly stated the value of purchasing frequency in terms of
advertising performance.
It was demonstrated that reading frequency declines as we move up the
social scale. The lowest level of loyalty is found among the readers we deem
to be of the greatest value to advertisers. Thus, in the UK, the newspaper with
the highest ad off take per copy (the FT) has the lowest purchasing frequency.
52
On this basis, if a publisher can move purchasing frequency forward,
readership can be built and that purchasing frequency should be translated
into advertising value
New forms of consumer access to the medium are crucial.
Digital printing technology enables publishers to capitalise on opportunities
outside their market boundaries. Not just in the obvious option of reaching ex
pats, but helping other newspapers who have a high ex pat community in your
publishing area to get their paper to keen potential readers. Go to a major
venue anywhere abroad and you will find people wanting to access their
home paper. The Suddeutsche Zeitung was the cited example, using a range
of technologies to increase distribution in target areas around the world.
Publishers were urged to think about what they could do for advertisers over
and above the services we routinely offer.
For example, the production of point of sale material. One publisher awards
points to advertiser with every advertising pound spent. These points can then
be converted into other services eg creative, research, design. Such an
approach gives us the opportunity of tapping into the 50% of marketing
budgets that is spent on events, PR etc, as well as levering advertising spend
and loyalty.
Customer Surveys can be used to identify weaknesses in the advertiser’s
offer, and to illustrate the effectiveness of the newspaper, as well as being a
service provision. Not only do we gain valuable information, but, if we become
skilled in it, we can charge for the service!
Publishers can harness the potential offered by other media.
As illustrated by UK and Japanese consumer profiles, the internet audience is
getting older, and mobile phones are ubiquitous among teenagers.
Using the media being devoured by certain key consumer groups to persuade
and entrap new readers can build newspaper audiences. Alternatively,
publishers may choose to deliver a different product depending on the
technology and the consumer group.
A model from Finland illustrated that there is a gap in communications
somewhere between the 1 –1 and the 1 – mass audiences. Mobile
technologies and digital printing are the ideal vehicles to fill it.
What radio did for record sales in the 1920, and cinema did for the video
industry in the 1960s, were precedents for what mobile technology offers
newspapers right now, and Jim predicted that this is going to be the “biggest
change we are going to see in our business.”
“Community meets content, meets access, meets immediacy.”
53
The principle is simple; different groups want different things. The trick is to
work on what they want now, to develop their longer term loyalty.
This was illustrated by the Asahi Shimbun Case Study, where sports content
from the newspaper and the website were integrated to crate the world’s
largest news site on mobile technology at a cost to users of 100 yen a month.
Between January 2000 and July 2002 it had amassed more than 1 million
subscribers and generated $11.5 million.
“Advertising CRM is the big, fast, hit.”
“ If I had to go back and do 1 thing in my business on Monday this would be
it!”
The 10 Steps recommended for developing Advertising CRM are:
1. Involve everyone in the newspaper
The need for editorial buy in, and the need to change the approach of
salespeople were emphasised.
2. Understand each advertiser’s objectives, needs and attitudes.
As a means of gaining market intelligence why not, every week, get 2% of
customers to complete a questionnaire? It would soon build up our knowledge
of emerging problems, and is also a vehicle for getting immediate feedback on
any product changes or initiatives.
3. Build customer knowledge, account by account
Do we know about response or the quality of our service provision? Then we
should find out.
We should measure the loyalty of our customers ie the frequency and history
of their advertising and their commitment.
We should know our position with each of them in terms of our revenue vis a
vis the competition.
4. Classify the Prospect Base
(Non customers, New, Active, Inactive and Passive)
54
Non repeat business accounts for about 1/3 of our revenue – to convert any of
these we need to know about it first – do we?
There are significant differences between a motor dealer selling 1000 cars a
month and one selling 2 cars a week. We should therefore treat them
differently in recognition of their different business profiles. We should then
handle their business in line with their spend, their frequency etc and
differentiate the sales process accordingly.
5. Build the sales organisation around the advertisers
The structure of the sales operation should reflect the advertisers and the
market, as well as taking account of the skills and personalities of the
individuals on the team and putting them onto the business best suited to
them.
We can all too easily waste these skills through not managing our
understanding of the business well enough. If we have 400 sales a week but
little repeat business, that equals time wasted and we should know about it.
6. Provide a single view of the advertiser relationship
Publishers need to own the advertiser: their history, attitudes etc, and it is a
simple exercise, as suggested, to collect such data and make it accessible to
all parties.
7. Track, measure react, track measure react…
Once you start to track, then you start to analyse and stop relying on the
subjective feedback of the sales team.
8. Maximise the efficiency of the advertisers’ message
55
Utilising a number of the previously mentioned ideas eg added value services,
meaningful reporting and feedback
Track and use value points. Know what advertisers get from their advertising.
The Bain study showed that newspaper advertisers actually reckon that the
service is cheap!
9. Maximise Prices and Yield
Know the market, adjust prices to reflect changes in it, capture data to justify
higher prices and ensure that all sales staff understand yield.
10. Build the business from the knowledge
Use the combination of customer communication, exploiting existing products
via improved data, intelligence and technologies, and customer segmented
sales organisation to achieve “growth through new and old.”
The process management to underpin the entire operation needs to be in
place. Process management is about customers and about the staff working
with them. Process management is not about I.T. Publishers therefore need to
overcome the tendency to let it be driven by the I.T. department.
The estimated time required to put a CRM initiative in place is generally about
three months.
56