Trinity Mirror has admitted that its regional titles are facing a “difficult” print advertising market as the group’s adjusted profits fell 2.5pc in the first half of the year.
Operating profits at the national and regional publisher were down from £50.3m in the first half of 2014 to £47.9m in the corresponding period this year, with overall revenues down from £324.2m to £288.5m.
Although digital revenues rose by 26pc to stand at £16.6pc, the company admitted that the “digital tipping point” at which the increase in digital revenues offsets the decline in print revenues had been “pushed out.”
In its half-yearly financial statement, the company said that the recently-closed web platforms UsVsTh3m and Ampp3 had provided “valuable lessons” for the business but had been “unable to generate advertising revenue.”
Commenting on the results, chief executive Simon Fox, pictured, said: “The print advertising environment has been more challenging than anticipated in the first half.
“As a result, whilst continuing to invest in people and technology to drive the ongoing growth in digital audience and revenue, we have taken further action to address our print cost base.
“I remain confident that our strategy will deliver sustainable growth in revenue and profit over the medium term despite the difficult print advertising market conditions.
“The actions we are taking in support of both our print and digital products provide the Board with confidence that profits for 2015 will be in line with expectations.”
Simon added that the company was still focussed on reaching the point at which digital growth would offset the decline of print.
“That tipping point is what we are focused on. With print advertising declining faster than we had expected, that tipping point is pushed out a bit,” he said.
In today’s interim report, the group said the market for our regional titles remains difficult with circulation declines of 12.5pc for paid for dailies, 14.1pc for paid for weeklies and 16.8pc for paid for Sundays. Whist we have individual titles performing well relative to the market, our overall trends remain challenging.
“Our regional titles continue to experience difficult advertising markets, particularly national advertising in our metropolitan titles,” it said.
Regional initiatives highlighted in the report include the launch of the Manchester Weekly News, Britain’s biggest free weekly newspaper, with a distribution of 265,000 across Greater Manchester.
Launched in April, it replaced six titles previously distributed across Manchester.
The report also referenced the launch of The Visiter, a new free newspaper replacing the Formby Times and the Crosby Herald, and the recent relaunch of the Liverpool Echo following the #TellAli consultation with readers.
“The new design is a significant change in format and layout compared to traditional newspapers and reflects the changing media consumption habits of our readers with less focus on crime, more reporting on things to do in the city and improved coverage of both football clubs in the region,” said the report.
The results also reveal that the group made £7m of cost savings in the first half of the year, due to increase to £20m across the year as a whole.
Savings made so far have included the consolidation of pre press operations into Liverpool for the group’s regional titles.
Trinity Mirror’s 19.7pc share of fellow regional publisher Local World yielded a £3.1m profit for the period, suggesting LW made a profit of around £15.5m in the first half of the year.
In its annual results for 2014 published on 30 June, Local World announced a pre-tax profit of £15.8m in 2014, up from £12.7m in 2013.
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This goes a long way to proving the point that while you can sell as much digital advertising as you want, the bread and butter for the business comes from print, and T-M’s strategy of pushing digital is flawed.
“With print advertising declining faster than we had expected…” Seriously – you didn’t see that coming when your print numbers are in freefall?
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I’m surprised print profits are even as high as they are reported to be given circulation declines.
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Digital offsets “pushed out”? That’s a serious admission of what the anticipated future holds.
The hype and enthusiasm with which the company’s senior figures greeted Ampp3 and UsVsTh3m showed some outrageous and flawed thinking on their part.
Yet it’s the directors who hold on to their positions and collect their bonuses while the rest of us constantly face redundancy.
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How much investment is being made in the advertising sales area – are the ad sales people and ad sales management good enough for today’s needs?
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“The results also reveal that the group made £7m of cost savings in the first half of the year, due to increase to £20m across the year as a whole.” So that’s another £13m “savings” to come this year then. I wonder where they will be made – by reducing the senior suit headcount, probably, and the chief exec refusing his bonus. Oh dear, oh dear…
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In its half-yearly financial statement, the company said that the recently-closed web platforms UsVsTh3m and Ampp3 had provided “valuable lessons” for the business but had been “unable to generate advertising revenue.”
And Local World are doing exactly the same kind of thing with Quirker – why don’t the groups learn the lessons of each others failures instead of chasing the latest buzzwords?
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at the TM weekly I worked at we had two advertising reps who were pretty legendary in terms of the money they brought in, one of them is now laid off. Also, their workloads were changed from going after good quality local businesses which had been bringing money in for decades, to national ones. The paper’s website was even closed down and turned into a single page of news on a bigger regional’s website so they could give more grandiose web hit figures when they went touting for business.
The market is declining, there’s no doubt about that, but the way it’s been handled by TM is a disaster in every single sphere. You couldn’t destroy a business better if you tried.
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Isn’t it about time the businesses looked at what’s realistic? I mean, only making £47m profit, how do they cope…..
Trevor James – I strongly doubt that any investment is being made in advertising sales. In my experience you have a culture of declining circulations, poor digital products and ever increasing targets. Most Ad Directors have been around the block and come from a very different time, when, making large bonuses was a lot easier and could be achieved buy customers calling in. Those days have long gone
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Sorry Adrian, but that’s a crazy argument. The bread-and-butter income, along with print sales, is in freefall so how can trying to replace that decline with a growing revenue stream be ‘flawed thinking’?
I agree that the regional approach to digital is somewhat flawed, but not the concept.
Invest in print as much as you like, but you cannot force your audience into buying a paper they don’t want. You can, however, learn how they want to receive their news and invest in that.
The problem is that it costs to develop content suitable for multiple digital devices, it costs to market and promote your digital strategy, it costs to upgrade and keep up to date with new technologies and it costs to train staff with new skills etc.
Maintaining high profit margins while making cuts cannot continue for much longer.
A few years of lean dividends for the shareholders and heavy investment in a genuinely local digital strategy would probably be far more beneficial in the long run, but there is no way that will happen.
Greed and uncertainty are a dangerous mix!
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Yet again, proof that it is time for the big boys to get out ASAP and stop damaging regional media any further…
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TM are facing a ‘difficult’ print advertising because, like most other people, they all hared off in pursuit of the (so far elusive) digital dollar and let their print products, which are still making profits, gradually wither on the vine. Nobody upstairs seems to get that print and digital are two completely different animals.
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The way you all rush on here to spot bad news and revel in it makes me wonder if you are journalists at all
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“Our regional titles continue to experience difficult advertising markets, particularly national advertising in our metropolitan titles.”
I’ll bet they do with an annual circulation decline of over 12 per cent. The people who book advertising space ain’t stupid. Who would put their hard won advertising budget into a metropolitan daily serving millions that can’t even sustain a circulation above 60,000?.
I suppose the real danger is that print circulation ebbs away before web advertising can fill the gap. Given the lack of concrete figures on how far print and web revenues are apart, it is difficult to judge the strength of that threat, but I suspect it is very real indeed.
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Print revenues keep tumbling. Digital has never made up the shortfall. The management would gave been well aware of this scenario long ago. Continual cost-cutting has shored up profits but the scope for more of the same is now at end. No matter what they do with the titles, the shutters will be going up soon. There is no road back. TM have put up a valiant fight and tried to reinvent the wheel. But like every other newspaper publisher, the end of the newspaper game is in sight.
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The reality is that digital can be successful – but only through leaner operations. It’ll be dictated by economics, as ever.
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And sutler puts their finger on one of the key issues of the online debate – “given the lack of concrete figures…” As I’ve bewailed here many times why are there never any concrete figures released? Of all the posters here, Oliver understands the digital dimension best I think (and thanks for your clear explanation of it recently, sir) but even he has to admit actual numbers are never, ever conceded by any of the Big Boys. In this case is it as simple as 16.6pc of £288.5m is digital revenue? But that wouldn’t necessarily equate to 16.6pc of the profit figure so we still flounder around in a sea of uncertainty. Whatever, digital income won’t pay reporters, subs and so in the rapidly disappearing “traditional” model of journalism.
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Are you a company brown nose Gooner? I bet some of the people making comments know a lot more about journalism that you imagine. That’s why they hate to see it go down the pan. I have seen the same names praise good ideas, but frankly these have been few in the past years.
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I hope not hackette and I am worried like you. Unlike commenters on here I don’t wait for the next piece of bad news with relish. But maybe that’s because my rent still depends on journalism
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Print journalism is on the way out, and will be dead by 2050 if not sooner. However, the process could have been slowed down considerably by keeping up editorial standards and producing exciting ‘must buy’ newspapers.
Forty years ago, big regional dailies were serious, newsy, value-for-money journals with gravitas, very often with a controversial edge. Papers like the Birmingham Evening Mail, Manchester Evening News and Northern Echo did some tremendous investigations. Oddly enough, the old broadsheet format added to their air of authority.
Now, most of the regionals I buy on my travels round the country are lightweight, insubstantial and, in the main, lacking that essential ‘must buy’ element. Many are tabloids with promos dominating the front page. The traditional ‘shop window’ is cluttered with the kind of stuff no-one wants to buy. It appears to me that many have accepted the inevitable and thrown in the towel.
I still believe there is a market for properly edited papers that demand attention. But I doubt the will and wherewithal are there anymore.
What we’re left with is the rump of a great industry. Shame.
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Why exactly is there a failure to monetise digital? If sites are getting the numbers, why aren’t advertisers signing up?
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Excuse me? “…coverage of both football clubs in the region”? There’s your problem right there. There’s more than two. Why bother covering two of the most covered clubs in the world? Why not cover clubs there’s local interest in but which few, if any, report on? Perhaps, “if you build it, they will come”?
Or you could just rearrange the deck chairs on the Titanic, aka the dreaded redesign, because that always works doesn’t it?
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Brassington: 2050? 35 years away? There’s unbridled enthusiasm for you. If sales are dropping at the rate of 10-15 per cent, the business model will collapse within as many years.
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Thank you, Dick. You’re right! There are never any hard figures about the actual profits from digital.
Brassington, I’m sorry, but while a good front page could make the difference of maybe a few hundred sales in the past, it has never really made the slightest difference to the bigger picture.
The ‘must buy’ factor for local papers has, historically, been driven more by the limitations of the competition. It was always more convenient than waiting for morning news on the radio or TV news in the evening. Those goalposts have been dramatically altered by digital technologies.
Maintaining editorial standards would have required expense, subs in particular, and this would have, in fact, killed off many more newspapers much earlier.
And, in terms of what actually pays the bills, it doesn’t matter whether you sell 100,000 or 10,000 copies or get 50,000 daily visitors or 500. The ad rates are determined by what people are willing to pay on whatever platform.
Local print advertising has been devalued by digital niches specialising in property, cars, jobs etc and advertisers are getting wise to the ‘scattergun’ approach. Print will never be able to compete with targeted digital advertising on Facebook or Google or at such low costs.
A local business can create a campaign for as little as £1 per day on Facebook, targeting people who are the most likely to be interested in its products or services, and possibly get a much greater number of sales or leads than a one-off advert in the local rag.
Although Google Adwords might be a little more expensive for some SMEs, it can also be used to provide clear data on what works and what doesn’t for any business.
This, and the plethora of local digital start-ups around topics such as news and events, is why digital advertising will never command such a high value.
More and more local advertisers are becoming acutely aware that they’ve been ripped off for years by the regional print industry and what it actually provides them in terms of ROI.
The same industry still tries to do it now by providing vague digital stats such as ‘impressions’ or ‘page views’. That’s great for large national advertisers who are simply using it to maintain their brand, but for local advertisers it’s about getting people through the doors, taking phone calls, website visits and sales.
Unless ad reps can provide that sort of evidence and work with local advertisers to ensure the value to their business, more and more will start doing it for themselves, undermining future revenues in both print and digital.
As that sort of relationship is time-consuming and therefore expensive, regional publishers will continue to cut corners in print and, instead, will focus on producing endless mind-numbing pages of digital content on which to hang expensive national adverts.
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Oliver’s right again and for all the moral outrage (based on threatened livelihoods) of editorial staff in the local press, the game is pretty nearly up, as it has been for years for a job I did as a skint student years ago – petrol pump attendant. Anyone remember them? More importantly, look where they are now. Gone with the wheelwrights and ostlers – and soon local reporters, subs and production people – into the history books. Sorry to start off such a glorious day on a dismal note.
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Journalism is more than a career, Gooner, it is a passion and often a pleasure. This why so many hacks with a lifetime of service to the industry are so quick to react to bad news. The still care what happens to the regional press.
If we did not care so much, we would refrain from following the decline and fall of our industry and go back to our crown green bowls.
There nothing that would make me happier than to see some positive news about the British regional press instead of the usual lies,damned lies and statistics peddled by the British media groups.
Believe you me, if any of these conglomerates found oil under their corporate headquarters they would drop newspapers like the proverbial hot potato – even if your rent depends on it.
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Brassington whilst agreeing with the points and observations you make your timings are very generous and out of sync with current trends, 2050??
If the rate of decline in content standards,readership sales loss and commercial ad revenues continues at its present rate then I firmly believe we are looking at five years absolute max, and that’s being generous.
You also say the difference as opposed to 40 years ago, that’s way off , you need only look back 5-10 years at most to see the gulf between then and now,
We have seen a rapid decline in the above areas in a very short period of time and with there being no sign of it changing or improving. The decline in these areas are wholly irreversible,and have,in the main been self inflicted by the short term ism, quick buck approach by the boards flawed policies of jumping on any potential new revenue bandwagon that’s passing on an Ttenpt to replace dwindling print revenues with any new money they can get their hands on
Couple this with continuous cost cutting at the expense of the end products eg the news papers themselves and the pattern of decline is easy to predict and see.
The domino effect of one impacting on the other is a force in motion that sadly once started cannot be halted.
nothing is going to happen to suddenly make people buy their local paper again,or for the top tablers to have a rethink about sacrificing standards and quality over reader or PR supplied easy and cheap to get copy or by reducing staffing numbers to the bare minimum expecting fewer to do more and to the same high standards that there used to be across departments.
On the back of that little lot comes businesses having no desire or need to use these papers to advertise in unless it’s at the all too frequent cheap cheap sale sale rates or in the belief that more people are seeing their adverts than they actually are,why do you think sales figures are ‘packaged up’ fudged, avoided and swept under the carpet and are no longer shouted about by the editors and commercial people ?
Gone are the days of front page pieces with editors crowing about copy sales, increased circulation and year on year sales increases. They know as we do that if the copy sale figures were published it would highlight to potential advertisers that fewer people are buying the products and they are not reaching enough people / potential customers in the communities they are trading in to get the response expected for their outlay, yet ad rate cards do not reflect the lesser reach they were getting say 3- 5 years ago.
It’s also why so many competitor publications have been launched and are thriving staffed in the main by ex regional press people who know the markets and also know the weaknesses of the local papers and use this to their advantage.
It’s interesting to note too how few people who leave regional press then attempt to get back in, unlike years ago when those believing the grass was greener found out it wasn’t and wanted back in.
All signs that the regional press has fallen so far in so short a period of time that reversing the decline is nigh on impossible, so let’s not be too surprised at this and let’s not look for or expect any sudden reversals of fortunes or we will all be waiting a very long time and be very disappointed.
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In its half-yearly financial statement, the company said that the recently-closed web platforms UsVsTh3m and Ampp3 had provided “valuable lessons” for the business but had been “unable to generate advertising revenue.”
And Local World are doing exactly the same kind of thing with Quirker – why don’t the groups learn the lessons of each others failures instead of chasing the latest buzzwords?
Because the really talented people who actually understood the issues left most publishing groups some time ago!
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