SBHD: Asking newspapers to give details of bulk deals is one thing – trying to calculate the number of broadsheet sections unread by the punters is another.
It used to be said that the founder of Colman’s mustard made his money from the amount of his product that customers left on the side of their plates.
These days, much the same could be said of newspaper publishers – at least those which make any money at all. A good slice of their income comes from the sections and copies that remain unread, either because most of the paper’s readers are uninterested in a particular section or never get that far, or because the whole paper has been planted on them – free, gratis and for nothing – as part of the publishers’ “bulk sales” strategy.
“Bulk sales” is the term for the thousands of copies that publishers distribute free to the reader, through hotels, airlines, rail operators and petrol stations. They are in the news because the Audit Bureau of Circulations has required publishers to give details of their bulk deals each month, after advertising agencies complained they might be paying for ads to appear in thousands of copies that were unwanted and unread.
The Daily Telegraph came cleanest, revealing not only that about 25,400 copies of its January circulation came from bulk sales, but putting out a press release which explained – with an elegant and convincing testimonial – why free copies can be justified as a legitimate sampling exercise for potential new readers. The Telegraph has deals with, among others, Forte Hotels, British Rail and P&O Ferries, all directed specifically at its target market.
To prove its point, it quoted from an article by Sue Townsend – hardly the obvious spokesperson for the brand – in the August 1994 issue of Sainsbury’s Magazine: “However, the hotel pushes a complimentary copy of The Daily Telegraph under my door every morning. I must admit that my lip curled the first time I saw it lying there. We all have our prejudices and one of mine was that The Daily Telegraph was read only by crusty old colonels with politics to the right of Genghis Khan.
“It’s no secret that my politics are to the left of Lenin and Livingstone, so it came as a shock to find that I was actually enjoying The Daily Telegraph. It made me laugh, it was well written and it was critical of the present Government.
“I still have The Guardian delivered, but I now sneak out and buy The Daily Telegraph for pleasure. What next? Will I start foxhunting, wearing pussy-bow blouses or calling for capital punishment in schools? Watch this space.”
While the Telegraph owned up to its 25,400 bulk copies in January – 2.4 per cent of its total circulation of 1,069,818 – The Times confessed to absolutely none at all. I found this curious as last week, when I stayed at a hotel in Belfast, I found a copy of The Times outside my door, not only free of charge, but gift-wrapped in a polythene bag. Had the cross-border leprechauns left it?
On my return I read that News International had apologised. It had apparently been confused by the new rules, and should have declared around 30,000 “bulk” copies, some of which had been given free at Jet petrol stations and some to students.
Whether my free copy counted as part of the “bulk”, I don’t know, but it certainly gave me a chance to sample the Saturday edition of The Times which I don’t normally see. Indeed, because I was in a hotel and had a plane journey to follow, I read far more of it than I do of the papers delivered at home every day. On that basis, and defying conventional wisdom, perhaps advertisers should pay a premium for bulk sales and get a discount on home-delivered copies.
Journalists, of course, are not typical of the reading public, because ordering more papers than they can consume is a professional hazard. But almost all newspaper readers now absorb a smaller proportion of their paper than they did when the print unions kept a stranglehold on pagination – and the occasional sectional readership survey can only give advertisers a snapshot of how some readers tackle the mountain of newsprint that hits them, particularly at the weekend.
Most Sundays, I discard half a dozen sections – out of three broadsheets delivered – without even a glance. My newsagent might as well take them straight to the paper bank for recycling and cut out the middleman. Ditto the inserts that litter the floor as soon as anyone opens a newspaper or magazine.
Are advertisers and publishers worried that I don’t read these bits? Not especially. Provided a sufficient proportion of my fellow-readers do so, advertisers will continue to pay the going rate and publishers will keep churning out the unwanted copies and the unread sections. At least they did until recently.
The newspaper price war changed this strategy – the economics of profligacy – for the worse, and the 40 per cent rise in the cost of newsprint has made it worse again, as Rupert Murdoch pointed out at the recent international economic summit at Davos. But though The Sun has now put up its price by a penny, The Times is thought unlikely to do so for the time being, because its sales have started to increase again.
How long can publishers continue to pay for copies and sections that are not being read, when every extra copy is costing 40 per cent more to produce? This may seem a brave question to raise in a primarily controlled-circulation publication, which has always relied on advertisers rather than readers to foot the bills, but it is a nettle all publishing companies – magazines as well as newspapers – are having to grasp.
The January ABC figures appear to show that “bulk sales” are not a major problem – and certainly not as serious as some agencies had feared. No more than four per cent of any paper’s sales are made up of bulk copies and as a means of getting new readers to try a paper, they are probably still worth their place in the marketing armoury.
By contrast, 100 per cent of a paper’s sales are affected by the problem of unread sections. Who is going to bear the increased newsprint cost of those sections – the publisher, the advertiser or the reader?
Some publishers will try to absorb the cost, because they are not in a strong enough position to raise their ad rates or their cover price. But if they try to pass the cost on, what will be the reaction of their customers?
Ad agencies are already concerned about paying for the readers some sections don’t reach. If publishers insist on a higher page yield to cover the cost of newsprint, they may object. But what about the readers themselves? Till now, the evidence suggests that people favour thick newspapers over thin ones, even though they know they may discard half the pages.
But if the price starts to go up again, the idea of throwing away so much of what one has paid for may hold less appeal.
Torin Douglas is BBC Radio’s correspondent.