New Labour, new Guardian readers

The Guardian is now the newspaper read by the Government. Unlike most of the nationals, it is experiencing an increase in sales.

According to informed sources, on the Saturday following the election The Guardian sold nearly 650,000 copies – more than 200,000 above its usual level. Its sister paper, The Observer, has been busy repositioning itself as “The paper for the new era” since May 1.

“Under the previous Government, The Times was the paper read by the top decision makers,” says a spokeswoman for Lever Brothers. “Now it is The Guardian that is read by members of the Government and key decision makers. The Guardian is at the top of our target list of influential newspapers.”

But it is not simply Lever Brothers’ PR strategists who feel that the newspaper world is changing. “The change in the political landscape has altered how the papers are viewed,” says one media buyer. “The Guardian’s circulation has shot up following the election but The Times’ has not followed suit. The Guardian is becoming the paper of record. The landscape of newspapers is changing.”

Significantly, this halo effect does not seem to have extended to late adopters of the Labour creed. Both The Sun and The News of the World’s Audit Bureau of Circulations figures slipped during the election – by 3.26 per cent and 2.49 per cent in year-on-year sales respectively – exploding once again the myth that newspapers put on sales during elections (MW February 28).

The figures underline what newspaper owners have known for a long time – the market is in long-term slow decline. The latest ABC figures show a drop in average daily net sales of 1.82 per cent from the previous month. Circulation across the board is dropping annually by about one per cent, despite 10p cover prices, free Eurostar tickets and seven days of newspapers for 1.

Newspapers have also learnt something evident to retailers years ago – you cannot buy loyalty. The Times’ ABC leapt to 861,931 in November, the second month of its free-ticket Eurostar promotion, but by April this had fallen to 719,308.

The Daily Mail and the Sunday Telegraph have both realised that price slashing does not work and have begun to increase prices. Two weeks ago Mail managing director Guy Zitter hiked Saturday’s Mail by 5p to 45p. “I honestly believe we will not lose many sales – maybe 5,000,” says Zitter.

But there is an underlying problem for newspapers which the election result will not change – newspapers are united by a need to freshen their marketing. The two groups which have shown the most innovation are The Telegraph and The Guardian.

The Telegraph is concentrating on building a strong third revenue stream outside cover sales and advertising. It was the first to set up a comprehensive database under commercial director Tony Coad, and last month Paul Hayes was appointed head of commercial development to exploit that database. “My job is to look at integrated solutions for our advertisers and non-advertisers,” says Hayes.

Instead of subscription schemes and price cuts, The Guardian is trying to build promotions which are closely linked to the core values of its brand from giveaway music CDs to last week’s promotion with Cellnet – The Big Trip. It is believed that Guardian marketing director Stephen Palmer is investigating the creation of a club, similar to The Telegraph’s Arts Club offering preferential booking and ticket discounts.

Some titles have been the victims of their own success in the promotions game. The Telegraph’s subscription programme, which at one point meant you could buy one week’s issues for 1, has proved expensive – costing the group 19.9m in its first year.

Most in need of a marketing boost is The Mirror Group-owned Independent. During the election campaign, it revived the “It is. Are you?” strapline. But circulation from November 1996 to April 1997 is down ten per cent year on year to 256,161. Month on month it is down two per cent.

Rumours that the secretive Barclay Brothers want to step in and buy the Mirror Group’s 46.42 per cent stake have been fuelled by Andrew Neil’s involvement in the Barclay Brothers owned-Scotsman and European. Neil refuses to comment. Independent managing director Jeremy Reed says the paper is well on the way to recovery.

Another line of speculation is that the chairman of the Irish Independent Newspaper group Tony O’Reilly, which already owns a 46.42 per cent stake in The Independent, will take up the remaining stake. His contract as chairman of the Heinz Group is thought to be ending soon, and he has already invested heavily in South African, Australian and New Zealand papers.

Yet another possibility being mooted is that The Observer would demerge from The Guardian-Observer Group and take over The Independent on Sunday.

Some say the marketing battle will be won or lost in Scotland. The rational is mainly tactical – squeezing your rivals north of the border is one of the simplest ways of pushing up advertising rates in England.

One media buyer says: “If The Sun gets strong enough in Scotland, I would stop using Mirror Group newspapers altogether.”

The strength of the Labour majority means it is unlikely that the newspapers will have an election against which to position themselves for at least four years. That may be good news for The Guardian but for others, such as The Independent, there will be greater changes before Tony Blair again goes to the country.

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