Newspaper advsertising in modest decline

After four years of poor results for newspaper advertising, the tide has turned. Statistics show the decline has eased.

Seven Group executive chairman Kerry Stokes, right, with Seven West Media CEO Tim Worner. John Feder

After four years of disappointing results for newspaper advertising, the tide has turned.

The latest statistics show the decline has eased.

The lowest quarterly ­decline in the Australian news media market shows publishers have made strides in expanding their digital advertising revenue and in making print newspapers more sustainable for the long haul.

Demand for news media ads fell a more modest 3.7 per cent to $494.3 million in the second quarter of calendar year 2018, the lowest quarterly ­decline.

The data is produced by the News Media Index, which measures advertising sales bookings between publishers, advertisers and media buyers.

The revenue data is taken from industry trade group NewsMediaWorks. Members include The Australian’s publisher, News Corp Australia, Fairfax Media and the Kerry Stokes-controlled Seven West Media, which owns West Australian Newspapers.

Between them, they represent about 90 per cent of the news media sector.

Among the three main news media channels — newspapers, digital and magazines — newspapers posted its lowest rate of quarterly decline since the fourth quarter of 2014 — down 8.1 per cent.

A more robust metropolitan press ad market led to a moderate decline of 2.9 per cent, compared with a drop of 11.1 per cent in the first quarter of this year, driven by better commitments from media buyers, a big reversal from recent years.

Other bright spots include digital’s growing share of the total news media ad spend pie — rising to 27.3 per cent from the 23.7 per cent during the previous corresponding period.

The better performance in the digital news media market comes as publishers boost digital revenue streams even faster to make up for lost print revenue as they battle the dominance of Facebook and Google in the digital ad market

It shows there is good reason for optimism among newspaper executives and investors as ­publishers build on the online subscribers and readers they gained during the 2016 US presidential election.

Since then publishers have been marketing trusted reporting as a sales strategy partly in ­response to problems plaguing the big tech platforms including Facebook.

News Corp Australia chief operating officer Damian Eales said Facebook’s role in spreading false stories among its 2.2 billion users worldwide had prompted advertisers to rethink their marketing budgets and return to a tried and tested medium.

“Consistent studies both in Australia and internationally are showing that those channels which have been growing fastest, social and search, are the least trusted environment for news and the least trusted for advertising,” Mr Eales said.

“As happens with these things, the pendulum swings too far and we seem to be seeing somewhat of a correction now.

“We’re seeing growth among ‘challenger’ brands — brands that are not as well known or trusted as ‘champion’ brands but want to appear in a trusted environment, at the top of the purchase funnel where they can take share from the champions.

“While many of the champ­ion brands are focused on talking to their pre-existing customers as close as they can to the point of transaction, challengers are trying to get a hold of them earlier in the buying process and change their perceptions.”