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UK printed newspaper circulations declining steeply...
It’s not very often that you get to view data that clearly shows an entire industry in rapid decline.
But that’s exactly what the data in this month’s charts show so clearly. The waning of the national
printed newspaper industry in the UK has been well documented but not so much research has
revealed just how rapidly that decline is proceeding. I must disclose an interest here. Between the
years 2000 and 2004 I was consulted by two of the UK national newspapers on this chart to help
them sort out a strategy for their digital future. Perhaps I lacked the presentational skill and tact to
put over the results of my research in a tolerable form for them, but I don’t think so. At that time
my clients simply couldn’t accept the information I gave them because they were unable to imagine
their world without printed newspapers. But it was clear to me that three distinct developments
were converging to wreck their core businesses despite the fact that one newspaper had been
established for 190 years and the other for 50. But longevity is no protection against the tide of
change. Although the top management of both newspapers were used to observing and analysing
what was happening about them, they couldn’t, or wouldn’t, see that the Internet was already
having a substantial impact on their industry and they had to adapt or drown.
The three trends I told them about were the start of broadband, significant price drops for laptops,
and the introduction of home wireless networks. My findings were based on quantitative research
methods which were used to select a number of representative people (ABC1 groups), based in
different areas throughout the country, who owned an online computer in their homes. I used
qualitative research methods to investigate how people looked for news, by conducting in-depth,
unstructured interviews in their homes. Using my proprietary software I videoed them, capturing
their behaviour while they worked on my laptop. I recorded all their keystrokes and research
results as they showed me how they searched online while we talked about offline and online news
gathering. I have found that questionnaires rarely elicit truthful answers but an in-depth interview
carried out while the interviewee is engaged on a practical task yields extraordinarily rich and
honest data. Being in people’s homes also enabled me to find out if they had home broadband,
which wasn't pervasive then, and if they had more than one computer, which usually meant that
they had, or were on the way to having, a wireless network. This was also rather unusual at the
time. My research showed that the move from a family sharing one computer, to each member of
the family having their own computer, was remarkably fast. Once a couple, or each member of a
family had their own computers, it usually took around one to two years for the family to stop
buying a printed newspaper altogether. Each person found that they were acquiring all the news
they could eat from television and online, usually for free. When someone in the family did buy a
printed newspaper it was usually left around unread, although a Sunday paper might fare better.
At that point there seemed no reason to buy a newspaper and purchasing any newspaper declined
over a two to six month period. I used my research results to build a simple model predicting the
speed of decline of printed newspapers.
I vividly remember how newspaper managements at that time counted the numbers of visitors to
their websites as though they were printed circulation figures. This confabulation helped to
provide an optimistic view of the industry’s future - there is a massive difference in consumption
between getting something for free and paying for it. When I trawled through the web analytic
data, (which was very poorly implemented) both newspapers had similar visitor profiles. Two
thirds of the total visitors were overseas and the infant Web advertising industry of the time was
obviously not interested in them. The UK advertising industry was only concerned with the national
UK audience. Both newspaper websites also had a similar distribution of visitors: a small number
of intensive users (visiting almost every day) and a great bulk of users visiting once a month and
spending less than three and half minutes on the site.
Printed newspapers and media buyers have always colluded and fudged (to put it kindly) the size of
any readership for their mutual benefit, and at the advertisers’ expense. For over 300 years the
industry has been able to sell advertising very profitably based on an aggregate of the number of
newspapers sold plus a vague approximation of the number of possible extra readers who also
looked at that copy. So it’s the sum of the paid circulation of a newspaper and the presumed
readership of that paper. Why do I say a vague approximation of the number of extra readers?
The way the magic number of readers is estimated for the industry is done by using The National
Readership Survey, or NRS for short. For example, the News International broadsheet: The Times,
has a paid-for circulation of only 397,549 but, using NRS figures, claims a readership of 1,314,000.
This readership figure is the foundation on which printed advertising is sold. The advertising
industry needed some way of quantifying the media, in order to base rates on which to buy
advertising, and clearly decided that as long as the NRS was consistent, and the same for all the
newspapers, it would do.
Let's look at how the NRS actually arrives at the readership figures. Over the course of one year a
continuous survey of 36,000 people is used to represent the entire UK population. This survey is
based on one home visit by an interviewer. Only London residents are paid for the interviews, each
of which takes an average of 27 minutes. The rest of the people provide their responses for free.
You can find details about this by clicking this link. These “interviews” take the form of a highly
structured questionnaire in which the questions are coded to fit a database for simple
interpretation. In order to fit this format the questions are often binary – so a yes or no is the only
valid answer. The results of these surveys produce black and white data in a world made-up of
infinite shades of ambiguous grey, but make for easy data processing. You can look in detail at the
questionnaire here. Take section aNN112 for example: The interviewer has to tell the interviewee
what defines the readership of printed newspapers and magazines: “It doesn’t matter how much or
how little you have read. Any part of a magazine or newspaper counts. And it counts even if you
have read or looked at only one of the separate parts, sections or magazines, which come with a
newspaper. It counts just so long as you’ve spent at least two minutes reading or looking at any
printed copy in the last 12 months.” Yes, that's right, readership is defined as two minutes or more
in the last year. Throughout the survey, the person being interviewed is repeatedly reminded of
this definition of what constitutes readership. I suggest that a little more honesty is necessary. If
the fairy-tale two minutes per year was redefined at a more realistic two minutes per month,
newspaper advertising rates would be decimated but present a much fairer deal for advertisers.
Newspapers don’t really have a choice. Online measurement of advertising has some fudged
aspects but is far more accurate than a printed newspaper readership could ever be.
Since the birth of the newspaper industry in the 1700s newspapers have been dependent on
advertising for the majority of their income. Paid-for circulation has always made-up a minority
share. Since those early days, advertisers have bought advertising in printed newspapers and
magazines on the understanding that the readership was typically three or more times bigger more
than the actual sales. As such they paid a premium for the advertising, and still do. But when one
realises the significance of this crucial readership being defined as ‘anything more than two
minutes in a year’, one also realises that the likelihood of a specific advertisement being seen in a
particular issue is, at the very least, highly improbable. Yet this situation still prevails. Advertising
agencies have always spent other people's money, often making commission on that expenditure.
The more advertisers spend, the more profit advertising agencies make. But now we are in an era
where higher levels of accountability for the marketing spend are demanded, and for the
newspaper industry the chickens are coming home to roost. Not only are circulations falling
steeply, the advertising rates are diving too.
To judge this I've used cost per mille or CPM. That is the cost for 1,000 people to view an
advertisement and, yes, that includes those dubious readership metrics. The second line on the
graph on the right shows that since 2004 to 2010 (more recent figures are not yet available) the
CPM for newspapers has almost halved. So newspapers are caught in a trap: less money is being
spent on advertising in newspapers, the papers get less for the advertising space they do manage
to sell, and they get less money from their declining paid circulations. Unfortunately it is a
downward spiral into non-existence for many newspapers unless they can radically change their
business models. The situation has become so bad they are being forced to re-think what they do
and how they go about it. Some newspapers will adapt and survive but those that do will be
significantly smaller enterprises than they are now and likely to be more honest. Progress to-date
doesn't make me optimistic about the fate of many in the newspaper industry but, like you, I’ll just
have to wait to read all about it.
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