Press looks to retail spending on advertising to lift revenue
National newspaper publishers are hoping Christmas comes early this year. Publishers, already heavily dependent on the final-quarter advertising rush in the festive season, desperately need to claw back some of the �80m in advertising spend that drained from the UK market in the year to the end of July.
Market conditions and consumer sentiment show signs of deteriorating, so newspaper publishers are looking to retailers to revive their fortunes as 2011 draws to a close. However, the retail sector, the biggest advertising money spinner for national newspapers, accounts for some �40m of their 2011 ad spend decline up to this point.
"Newspapers will be desperate for an uplift in retail spend for Christmas, some sort of bounceback compared with the year so far," says Rob Lynam, head of press at media buying agency MEC. "Last year [Christmas] spending by retailers started quite late, some as late as the end of October. Newspapers will definitely be hoping it starts early this year."
Last year the retail sector spent �158m on national newspaper ads between October and December ? 35% of the total amount spent in that period ? and almost four times that of the next biggest sector, finance.
However, after a tough summer the omens are not good. The retail sector has taken a hammering with casualties including Habitat, Focus DIY, Jane Norman and the discount department store group TJ Hughes, while well known high street brands such as Mothercare, HMV and Thorntons have closed large numbers of stores.
"The retail market has had it tough but nationals need grocers in particular," says Lynam. "They have propped up the market for the last five years but they have decimated their budgets so far this year."
Four of the top five spending grocers ? Tesco, Asda, Lidl and Aldi ? have made double digit cuts to their national newspaper ad spend in the year to the end of July. Only Morrisons increased spend, up by about a third.
However, the newspaper advertising market frequently operates on a last minute basis which makes forecasting the pre-Christmas spend almost impossible.
A number of media buying agency press directors, who buy ad space in newspapers on behalf of clients, are confident that Christmas will be full of cheer for the sector.
"There are certain clients who are cutting budgets, but there is no massive concern in the market yet," says Zoe Bale, print planning director at media buying agency Carat. "Press is always the first to go from a media schedule but it will ramp up again at Christmas. Retailers go crazy, it is the biggest quarter of the year. I'm not worried."
Nevertheless, the last minute nature of the market leaves national newspaper commercial directors with a nervous few weeks to negotiate.
Source: http://www.guardian.co.uk/media/2011/aug/28/newspaper-advertising-christmas-retail-spending
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