'Bad News' Is Not So Bad as Agencies Continue to Spend Big
Byline: David Powell
ON THE SURFACE, the news that Ireland's 18 national newspapers shed more than [currency]50 million in advertising revenues last year could hardly be described as a shock.
Compared to other sectors, a decline in revenue of just 14% compared to 2007 is exactly as one industry source put it: "not that bad, considering".
In fact, trapped inside the ostensibly negative advertising figures released by National Newspapers of Ireland (NNI) for last year is a good news story just waiting to get out.
The figures show that overall ad revenue dropped from [currency]367 million in 2007 to [currency]314 million last year. Direct (i.e. non-agency) advertising was hardest hit, with the slump in the traditional 'cornerstones' of property, financial and recruitment ads contributing to a decline of 24% or [currency]38 million.
While direct advertising - property mainly - took the proverbial hammering, the good news is that ad agencies are spending almost as strongly as ever. Indeed much to NNI's satisfaction, agency spending remained positively buoyant in 2008, with through-agency revenues of [currency]192 million representing a drop of just 7%.
That newspapers are getting such a large slice of the agency cake reflects a greater appreciation of the strengths of the medium, particularly in the current climate.
Agencies and their clients are tuning into the fact that newspapers have changed - more content and more colour means more ways of connecting.
"Agencies now account for more than 60% of our total advertising revenue, and the fact they spent more than [currency]190 million on behalf of their clients in 2008 is very encouraging for all our titles," says NNI Chairman, Maeve Donovan.
"A strong agency spend suggests that more advertisers are turning their attention to newspapers to fulfil a brandbuilding rather than selling role," she says. "More companies are recognising that press has the technological capacity and, more importantly, the emotional ability to establish personal contact with consumers. …