One of my favourite Warren Buffett quotes is: ‘‘Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.’’
Based on some well-placed intelligence, the turning tides towards improved forecasts and reports in British newspaper market are a strong indication for growth in Australia.
The UK Advertising Association and World Advertising Research Centre ad expenditure report is released each quarter. The most recent data for the third quarter details year-on-year results for the ad sector, alongside estimated forecasts for full-year 2017 and full-year 2018.
The report included several interesting findings for national news brands. While year-on-year news brand revenue was down 5.1 per cent, digital news brands witnessed big gains of 21.5 per cent.
Revenue forecasts are down by 7.0 per cent for full-year 2017. However, forecasts for 2018 suggest that decline will be stemmed, with a reduced year-on-year fall in revenue of only 6.2 per cent.
One British insider sits on even better results. They point to a growing realisation among media agencies that the pendulum has swung too far to a reliance on digital to generate short-term sales activation, and a realisation that traditional media support powerful brand building as well as sales and market share growth. This has seen a lift in retail, finance and mobile device print spending.
British supermarket Tesco is a case in point. Nielsen data shows its spend in press doubled in 2017, up by more than £9 million.
According to The Advertising Report by research firm Ebiquity, Tesco increased spend in traditional media — press, TV, cinema, radio and outdoor — to £73.9m last year.
The news coincides with Tesco’s full-year results, with profit before tax and exceptional costs up 64 per cent to £1.28 billion ($2.3bn) and revenue up 2.8 per cent to £57.5bn.
“If I look at the quality perception of the brand it’s continued to improve strongly,” said CEO Dave Lewis. “With our customers, loyalty is growing, as is the perception of quality and value.”
News media organisations in Britain have increased attention on direct conversations with advertisers, developing multichannel partnerships.
Over the same period, Newsworks UK, the marketing agency for the national news media publishers in the United Kingdom, has focused its insights and marketing resources on the media agency planners. The agency provides planning tools to help agency planners isolate the most potent news brand solutions — across print and online — for the specific campaign outcomes sought.
These conversations are likely to become more animated, focused and widespread.
Last month’s revelations about Facebook’s abject failure to protect user’s private data has focused advertiser attention on digital failings in transparency and accountability. It is of note Facebook bought full-page print ad space in various British and US newspapers to apologise for the data mishandling scandal involving Cambridge Analytica.
Fairfax Media’s chief revenue officer Matt Rowley said: “There are good reasons why Facebook published their apology in newspapers; there is no better place for a message to be seen, trusted and engaged with.”
There are signs advertisers have real doubts on the powerful issue of consumer trust.
In August 2017, NewsMediaWorks, the Australian equivalent of Newsworks UK, commissioned Galaxy Research to conduct a survey of consumer trust in media.
It found, unsurprisingly, that consumers trusted the content in newspapers and digital news media more than any other media.
They least trusted the content and advertising in social media.
This polarity was particularly evident among younger consumers.
One young respondent asserted: ‘‘Social media is very anonymous, so anyone can publish ads.’’ Another offered: ‘‘I feel newspapers are more traditional and therefore more trustworthy.’’ And another: ‘‘I trust the newspapers and their websites to only accept reputable advertising.’’
There is anecdotal evidence that the slowing of negative growth in newspaper advertising in Britain may convert into growth for the first time in several years.
This week will see the release of both the Standard Media Index media agency buying numbers as well as the NMI (News Media Index), which captures expenditure in newspapers and digital news media by both agencies and direct advertisers, the latter accounting for 50 per cent of newspaper ad bookings.
Indications are that the British experience is set to be replicated in Australia with some publishers reporting an encouraging January to March, as advertisers ask the hard questions, and media agencies review their media buying benchmarks and practices.
The piece was first published in The Australian, and has been republished with the permission of News Corp Australia.