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There has been quite a bit of (largely inaccurate) press speculation over the last few weeks on the subject of a proposed joint advertising sales venture for UK news brands. For those who missed it, this is still at the level of a feasibility study, examining the potential customer and commercial benefits of news brands sharing a commercial future.
So, why is this move being considered?
News brands are in a terrible financial position: declining revenues, shrinking circulations, and huge legacy overheads, such as printing presses, delivery fleets and large workforces. They are also in a somewhat unequal struggle for revenue with fleeter of foot digital competitors.
If they can move from 8 independent, individually funded sales operations, each with its own marketing and research departments, to just one joined-up offering the savings will be huge.
All the major news brands are on board, which is extraordinary in itself, as they are the deadliest of rivals and in some cases ideologically at loggerheads. The Guardian collaborating with the Telegraph? Desperate times…
It probably won’t have a major impact on declining ad sales by itself, but it is only one of several transformational developments, including:
AMP, new joint industry research which replaces NRS, delivering (de-duplicated) cross-platform measurement fit for the digital world.
PATS (Publisher Automated Transaction System).
Independent effectiveness research, just released by Newsworks which shows that news brands can provide strong short term ROI.
Is this a potential threat to advertisers?
Whenever media consolidates there is always a risk that rates will harden and a danger of price-fixing. If the CMA were to consider waiving this proposal through (and that’s a big “if”), ISBA would, as always, insist upon guarantees to the contrary. It is a central tenet of our service to advertisers to protect against any unwarranted price increases that could arise from media consolidation, for example with the proposal and defence of the Contract Rights Renewal (CRR) as it applies to ITV following concerns arising from the proposed merger between Carlton Communications and Granada in 2003.
In reality, news brands’ share of spend is so diminished that, even collectively, they couldn’t strong arm an agency or advertiser if they tried (which is highly unlikely) – it would simply lead to more disinvestment and their hastened demise.
Are there any benefits for advertisers?
Potentially, yes. Having a single sales point and a one well-resourced research department, means news brands will be better able to execute and optimise creative media buys effectively and consistently across all titles and touchpoints.
Perhaps most important of all, this move could help these irreplaceable British media brands to survive, and that is surely a good thing, not only for advertisers, but for our society and culture.
Mark Finney - Director of media and advertising.
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