Quality of print will win out says News Corp chief Robert Thomson

PRINT advertising is commanding bigger premiums as advertisers become sceptical about digital advertising, News Corp’s CEO says.

“The relative value of print to certain clients in a digitally discursive age, it has to be quality print, is increasing,” News Corp’s global CEO Robert Thomson says.

THE global chief executive of News Corp has underscored the value of print advertising, which he said has become even more valuable in a “digitally discursive age”.

Robert Thomson said print advertising was commanding bigger premiums amid growing signs advertisers were becoming sceptical about the effectiveness of digital advertising.

“When you look at how trends evolve, people freeze a frame at a time of exponential evolution and you just get things wrong,” Mr Thomson said.

“The relative value of print to certain clients in a digitally discursive age, it has to be quality print, is increasing.”

It comes after WPP, the world’s largest advertising group by revenue, has forecast the movement of advertising dollars away from newspapers will slow to its lowest rate of decline since 2011 in an indication that major advertisers are reappraising the power of print advertising.

Amid claims that print is dying, newspapers and magazines are still profitable, with the vast majority of the profits continuing to derive more from print than from digital advertising.

In fact, Mr Thomson revealed the Wall Street Journal is attracting heavy demand for print advertising from the technological sector.

“The preconception would be tech is a digital play,” he said. “Well, tech people know more about digital than anyone and are advertising in print.”

Mr Thomson attacked “listicle” journalism popularised by websites such as Buzzfeed, which engage in click-bait tactics to draw large audiences with list-based articles.

“There is so much rubbish that is passed off as journalism,” he said. “There’s a numerical limit to numerical headlines like ‘17 Ways to Keep Your Cat Happy’.

“We’re going through a phase of popularisation of so-called journalism … over a period, instead of this quantification of content, you will see a greater emphasis on quality.

“Because advertisers will ask themselves, ‘Do I really want to be seen next to that story? It’s pretty garish. You go on to Buzzfeed and you’re in a strange place.”

Mr Thomson’s criticism comes as it becomes clear that the digital publishing model adopted by these new entrants has clear limitations, with advertising rates remaining low and continuing to drop, locking digital publishers into a destructive race for eyeballs of diminishing returns.

Eighteen months after the creation of the ‘new’ News, following the split of Rupert Murdoch’s media empire, the company has pursued a multi-platform publishing strategy across mastheads such as The Australian, The Times of London, and The Wall Street Journal.

This month, The Times of London outperformed the UK broadsheet newspaper market, with a rise in both print and digital sales

Print sales rose 1 per cent to 393,000 copies, according to the latest ABC circulation figures for October, while the number of digital subscribers rose 8 per cent year-on-year to 152,000.

Back home, The Australian grew its weekday print readership by 1.0 per cent to 526,000 readers in the 12 months to July, according to the Enhanced Media Metrics Australia system.

Further, three years after becoming the first Australian newspaper to introduce a digital subscription model, The Australian has 66,000 subscriptions, adding 17 per cent in the third quarter, according to the latest ABC data.

Mr Thomson said News Corp’s continued investment in journalism gave the company a “comparative advantage”.

“We’re going to invest in digital nous and we’re going to trust audiences and advertisers will want intensity and affinity with quality and not guilt by association,” he said.

Mr Thomson said a difficult Australian print advertising market was continuing to improve.

In the past year, Mr Thomson has talked about “green shoots”, using the analogy that the Murray River is “flowing” again after being “silted up”.

Continuing the references to Australia topography, Mr Thomson said the market was “somewhere between Mallee scrub and lush tropical plants in Queensland”.

He said the “trajectory” of the Australian operations was heading in the right direction, with operating profit up year-on-year.

“The team there under Julian Clarke and Peter Tonagh really has done a wonderful job at reconnecting with advertisers and sorting out digital strategy, bringing a new energy to the business.”

Mr Thomson expressed delight at the impact of a recent move by pay-TV operator Foxtel, which is half-owned by News, to slash prices and revamp its channel offering.

Last month, the pay-TV operator cut the price of its entry-level cable and satellite offering from $49.50 to $25 a month in a bid to attract new customers.

“We just came to the conclusion that the entry price was too high,” he said. “It’s early days but Richard [Freudenstein — Foxtel CEO] a few days ago said he was extremely happy with the initial take-up.

“I think it’s fair to say Richard’s a wonderfully intelligent but mild-mannered person and if Richard is extremely happy I’m extremely happy.”

As part of an aggressive move into the real estate classified advertising market, News recently finalised a $US950m takeover of Move, the third most-trafficked website network for property listings in the US, operator of realtor.com.

Mr Thomson laid bare the company’s plans, which will integrate Move with other News Corp assets such as The Wall Street Journal to increase the quality of the online traffic, integrating content and raising brand awareness.

“The underlying value in Move just seemed to us to be so much greater than the competitors, or now, the competitor,” he said. “It’s fair to say the realtors are very apprehensive about (US real estate portals) Zillow and Trulia together.”

“What people know of Move is the Move of two years ago when quite honestly it was hamstrung to a certain extent … we are now in a position which Move hasn’t been in historically to compete head-on with Zillow-Trulia.”

Mr Thomson also expects Move to generate more income from advertising as its draws on News Corp’s relationships with advertiers.

“In the past because it hadn’t had relationships with core Madison Avenue agencies or advertisers it really couldn’t monetise [traffic],” he said. “It was literally selling it [traffic] as remnant. Whereas we will sell it as core at completely different yields.”