C H I S H O L M Jim Jim ' Prints role in the multi-media context C H I S H O L M Lessons from the past and future Worldwide circulation continues to grow Source: World Press Trends C H I S H O L M Lessons from the past and future Print circulations reflect the maturity of the market Source: World Press Trends C H I S H O L M The product life cycle The old reader myth (UK) Over last 50 years young readership has fallen by over 60%. Readership among the over 65s has fallen by 19%. People read most when they are youngest and read less as they get older. The rate of cohort decline is accelerating From 6% through the seventiess, to 28% in the naughties. Readership penetration of UK national daily newspapers by age over time. % Var % C H I S H O L M The death of the life cycle Is this man past his peak? BirthAge Cycle peak % of life Newspapers Telephone Radio Television Microsoft Yahoo Google MySpace20075 Facebook20048 A Facebook user was valued at $190. C H I S H O L M Information - news Transformation Ents, escape Concern emotions emerge Pastime empty moment Stimulant - Enthusiasm Identification - sympathise Social factor conversation Usability practical tips The death of the life cycle The Dutch perspective Information - news Transformation Ents, escape Concern emotions emerge Pastime empty moment Stimulant - Enthusiasm Identification - sympathise Social factor conversation Usability practical tips C H I S H O L M Reality check Are newspapers damaged brands? Coke: 14% of turnover on advertising 12% of turnover on sales Unilever 12% of turnover on advertising 12% of turnover on distribution Newspapers (USA) 1% of turnover on advertising 10% on marketing (Subscription management) and distribution Newspapers (Europe) 1.3% of turnover on newspaper marketing 20% on distribution Subscription papers 22% Single copy papers 5% Sources: Chisholm, Inland Press Association (USA), WAN benchmarking study (Europe) Company reports C H I S H O L M Global media consumption trends Media consumption is declining Source: CHISHOLM analysis. World Press Trends C H I S H O L M Global media consumption trends Radio is hardest hit Source: CHISHOLM analysis. World Press Trends C H I S H O L M Global media consumption trends More people read newspapers than use the internet Sources: CHISHOLM, World Press Trends, ITU, Deloitte. Global population 7 Billion Average issues readers Weekly Readers 3G 2G Ever view C H I S H O L M Lessons from the past and future Newspapers share of advertising has declined from 28% to 21% since Source: Zenith Optimedia C H I S H O L M Worldwide advertising trends Newspaper advertising is decoupling from GDP C H I S H O L M Worldwide advertising trends Currently newspaper advertising is decoupling at a rate of minus 10% versus GDP The USA accounts for a third of the worlds advertising expenditure. C H I S H O L M Newspaper advertising effectiveness (Australia) The role of advertising C H I S H O L M Newspaper advertising effectiveness (Australia) The result of advertising C H I S H O L M The cost of pricing (Global) A 10% increase in prices causes a 5% decline sale C H I S H O L M The cost of pricing (Global) A 10% decline in sale causes a 6% decline in ad share C H I S H O L M The cost of pricing (USA) Accountants can count, but they cant math! Analysis of the impact of cover price increases, in the next newspaper revenue position Price Net impact Circulation100,00095,000-5,000 Gross circulation revenue100,000104,5004,500 Advertising revenue355,672344,824-10,848 Total revenue455,672449,324-6,348 Net circulation revenue30,00031,3501,350 Net advertising revenue302,321293,100-9,221Total net revenue after sales costs332,321324,450-7,871 Materials54,68153, Net revenue after all variable costs277,640270,531-7,109 Assumptions 10% rise in cover price results in a 5% decline in sale Advertising revenue = 78% of company revenues 10% decline in sale causes 6.1 decline in newspaper advertising share Newsprint and production costs 12% of revenue Circ costs = 70% of revenue Advertising costs = 15% of revenue -2.5% C H I S H O L M Digital realities Newspapers are failing to exploit the internet boom Newspapers share of digital advertising has been declining since 2006, having seen significant growth up until that point. Source: Zenith Optimedia, Newspaper Association of America C H I S H O L M Newspapers maximise impact Incremental benefit of newspapers over TV C H I S H O L M Digital realities (Global) Print is going to fund our industry in the near future Digital accounts for 10% of revenue in the USA. It accounts for 29% of revenues at Schibsted Sweden. Source. PriceWaterhouseCoopers { Mobile is 1% of digital C H I S H O L M The digital transition Increasing influence of mobile Forecasts suggest that by 2017 mobile will deliver between around 24% of all digital advertising. The forecasts are wrong. Fixed internet Mobile/wireless Today time Service range Source: CHISHOLM analysis of Forrester. C H I S H O L M The digital transition Mobile is the second evolution DevelopmentDescriptionImplication for traditional media companies WirelessWill be free and ubiquitous, providing any-time, any-place multi-media distribution and interaction. Users will receive and distribute content, and/or advertising. Opportunities in contextual content. LocationalMedia targeted to people and ultra local venues: malls, stadia, neighborhoods. Offering hyper local and targeted content and advertising. Multi-media search Search will extend to pictures, sounds and video. Scan a photograph and receive information about who or where it is. ProfilingAdvances in profiling analysis tools enhance the ability to target and contextualise. Further targeting content or advertising, raising value. TransactivityDigital transactions will grow rapidly, both in volume and scope. Newspapers have the ability to take transactions to smaller retailers and the means to transact and distribute E-readingEnvironmental pressures; Pricing; Younger readers. Offer a means of reducing the newspaper cost base. C H I S H O L M The digital transition eReaders are the accelerator eReader users (M) % Change % of population % of internet users Source: eMarketer.com (Data for USA), Various internet cuttings. Amazon reports that one in three books available digitally are bought digitally. Le Monde reports that reading times of eReader applications are as high as those of printed newspapers American publishers have found that subscription conversion and retention levels for eReaders are higher than for print products. A German study found that older people read faster on the iPad than in print. 1% of newspaper digital revenues are from mobile. C H I S H O L M The marketing reality (Western markets) Advertising accounts for only a third of marketing expenditure Transactive Marketing Interactive Marketing Direct Marketing Mass market C H I S H O L M The publishers horizon Newspaper digital engagement is dependent on digital reach, and newspaper reach of digital C H I S H O L M The publishers horizon (Western markets) Our challenge is audience intensity Over a month, print continues to deliver over 50 times the audience impact of newspaper digital websites. Comparing print and digital PrintDigital Circulation100- Readers per copy per day Visits per month Pages per visit Total pages per month 1, Source: Chisholm analysis of ComScore data. (Data for USA, UK and Germany) C H I S H O L M The publishers horizon (Global) Our challenge is audience intensity Readers per copy Monthly uniques per reader Visits per unique Pages per visit Pages per circulation Philippines India Taiwan Japan Brazil Indonesia Venezuela Malaysia Poland Russia Hong Kong Switzerland Austria Germany Singapore Italy UK France Finland South Korea Sweden Australia Denmark Norway Ireland USA Belgium Spain New Zealand Netherlands Canada Chile Argentina C H I S H O L M Small steps. Big rewards. Meet the multiplier. UK Newspapers net US Newspapers net DE Newspapers net UK Mail Online UK Guardian UK Telegraph UK The Sun Online UK Mirror Online UK Independent UK Metro.co.uk US New York Times US USA Today US Washington Post US Wall Street Journal DE Bild.de DE Welt DE Sueddeutsche.de DE Faz.net DE RP-online.de DE Zeit.de Title totals Unique visitors per circulation Visits per visitor Pages per visit Page impressions per copy C H I S H O L M Small steps. Big rewards. Meet the multiplier. Small increments in each step of the multiplier has a major effect on the outcome: Print purchase and reading frequency Number of visitors relative to circulation Number of visitors per visit Number of pages per visit Levels of advertising engagement Title totals Unique visitors per circulation Visits per visitor Pages per visit Page impressions per copy 2% improvement % improvement C H I S H O L M Small steps. Big rewards Some factoids Facebook now has more traffic than Google; More people globally now access the internet by mobile than PC; Women are becoming the dominant users of the Internet; People spend half the time reading news online than they do in print, but visit 3.3 times as many brands; Newspapers arent dying. Weve just been slow to wake up: 1920s Music industry 1950s Cinema 2000s Railroads C H I S H O L M Small steps. Big rewards Our primary tactical challenge is engagement We are not losing readers we are losing reading frequency and intensity Decline print through lack of branding and customer attraction Poor understanding of newspaper econometrics is accelerating revenue declines Low digital engagement: Little linkage between print and digital Need for improved serendipity and navigation Evidence that key triggers along the multiplier steps drives results A 1% improvement in each step increases page impressions by 75% A 2% improvements increases page impressions by 179% C H I S H O L M Small steps. Big rewards Tactical engagement steps StepAnalysisStandard of performance Purchase and reading frequency Do we give readers a reason to read tomorrow? A look ahead on every DPS Content pre-planning Campaigns and programmes Visitors per readerDo we encourage print/digital interaction? All writersed Cross-content fertilisation Visits per visitorHow do we bring users back more often? Look-aheads Greater use of mobile devices Pages per visitHow do encourage users to hang around? Improved navigation Revisit story searching apps Advertising response How do increase user response? Research into advertising effectiveness Wider range of advertising processes C H I S H O L M Small steps. Big rewards Our primary strategic issue is product development New newspaper products are still emerging: sterreich ii European Daily Need to identify alternative advertising products (through launch or acquisition) Growth is a department and a philosophy Patterns of marketing expenditure point to alternative product development streams Hyper local Global to local C H I S H O L M Small steps. Big rewards Lessons from the past Stop firing creative people. More brains. Fewer accountants. The answers are in the analysis. Multiplier steps Customer analytics Advertising response and effectiveness Create a plan for every multiplier step What is the goal? How will it work? Why will it work? Measurement, measurement, measurement Current behaviour Reasons for behaviour Triggers for performance C H I S H O L M Tactics and implementation