Newspapers starting to look like old news for advertisers

There was plenty of editorial cheer at this week’s British Press Awards but as circulation figures continue to fall, brands are getting better results from their websites than traditional press ads

To the Dorchester on Monday night, the new venue for the revamped, cleaned-up British Press Awards. After last year’s ceremony, which was even rowdier than those of previous years, several publishers threatened to withdraw unless the event was overhauled. They said the disputed decisions and boorish behaviour made it a dreadful showcase for the national newspaper business.

Press Gazette, which runs the awards, came under new management, the voting process was changed and the dinner ceremony tightened up. Despite this, the Telegraph, Mail and Express groups were absent on Monday and the event was a good deal smaller than previously. But it was still a great improvement and the winners showed the press in good editorial form. There was remarkable coverage of events such as July 7th, the tsunami and the deaths of the Pope and George Best – and successful revamps in smaller formats.

Unfortunately, most of the circulation and financial figures paint a far less healthy picture of the press. Like all “old media”, newspapers are struggling to come to terms with the digital revolution. They are fond of headlining the decline in ITV1’s ratings, with articles that must delight the Newspaper Marketing Agency. But ITV has developed a proper digital strategy and has just reported a 36% increase in profits (a fact which was far less prominently reported than the ratings decline).

Most newspapers would give their eye-teeth for such a financial performance. It’s not just that most national papers are losing sales, as millions switch to the internet for their news and comment (often provided by those same newspapers free of charge). But advertising revenue is falling even faster – particularly in the classified areas of jobs, property and cars, for which the internet might have been invented.

Newspapers are busily trying to find ways to make the internet work for them. The Telegraph has launched its podcasts and so has The Times. Murdoch has bought the MySpace.com community site and there are unconfirmed reports that it will be linked to the Sun website, to create a MySun online network. The Guardian Unlimited site has just spawned a major new section, Comment Is Free, and a podcast on mediaguardian.co.uk. Some groups, like Associated Newspapers, have embraced new media by buying up some of the booming new classified advertising companies, such as jobsite.co.uk and findaproperty.com. But this doesn’t directly help the revenues of their newspaper titles.

To add to the publishers’ woes, advertisers have now been told that newspapers are losing their effectiveness by someone who should know – the advertisers’ own leader at the advertisers’ own conference.

John Clare is the chief executive of DSG, better known as the owner of Dixons, Currys and PC World, and one of the biggest newspaper advertisers. He is also now the president of the Incorporated Society of British Advertisers and, in his speech at its annual conference, he told the press some home truths. “We are big advertisers in the press, but our press advertising is not retail brand advertising – it is the place where traditionally electrical and other retailers have laid out their product ranges and their prices. If they are in the market for a new TV, our potential customers can compare us and our competitors through our press ads,” he said.

“Twenty years ago 65% of our store customers looked at our press ads first, before coming to the store. They would then often come to the store with a copy of them. Today only 15% of our store customers have seen our press ads first, but almost 60% (and growing) have visited our website first. They’ve checked out our range, prices and special offers there (and no doubt compared us with our competitors). They now arrive at the stores with a print-out from our website.

“Consider the implications of this. The old role of the press in our media mix is dying. That’s a big issue for the press. We and other retail advertisers are big spenders with them. Our spends are declining. The media need to be very creative in finding a new role for themselves in our mix – or risk being eliminated from it completely,” says Clare.

That’s telling them. Clare softened the message a bit by presenting it at as an opportunity for the press to be creative and “think out of the box” and by pointing out that other media had their own challenges with the internet. But it still came over as very gloomy.

He was almost as tough on advertising agencies, saying the internet was driving customers to his stores “more by accident than design and with little or no impact from our advertising agency.” He said they should be applying themselves to making the advertising role of internet sites more effective: “Agencies have a clear creative opportunity, and a threat to traditional fees and commissions if they fail.”

It’s rare for an advertiser to speak so bluntly in public and his words will have made uncomfortable listening, but if the press and agencies still needed a wake-up call about the internet, this was it.

Torin Douglas is media correspondent on BBC News

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