‘Local’ will remain the only print game in town

The worldwide Covid-19 pandemic has damaged commerce and business everywhere in the world and it will take time to ‘renormalise’ once the scourge has passed.

Especially commentators see the world of print media being reshaped, says the CEO of Spark Media, Gill Randall, adding that the true question here is, how?

“We believe that certain things won’t change. Brands and branding will continue to be important to both consumers, and the creative marketing and media strategists who create and sustain brands. Consumer behaviour won’t change substantially. It will possibly evolve, but because our behaviour is driven by our hard-wired brains, our reaction to marketing and advertising nudges will go on much as before,” she said.

What does this mean firstly in general terms, and then specifically for various media in South Africa? What changes could impact media selection going forward?

The move to digital

There has clearly been a big swing to television and digital for both news and entertainment consumptions, Randall says.

“Though we have no figures yet, anecdotal data suggests that purchases of print media such as magazines, dailies and weekenders has taken a knock.  It had to happen. Lockdowns don’t facilitate store visits and purchases. In a number of cases there was nothing to buy anyway. Magazine printing presses were shut down by the government, and the harm done by that, the already weak state of the economy and the low likelihood of any quick economic recovery, resulted in the permanent closure of various titles. This could be positive for the survivors both in terms of increased circulations and advertising revenue, but it remains to be seen.”

The reach test

Digital and social media have become a huge ad medium, but marketers are increasingly questioning the metrics of online advertising measurements, says Randall.  “There is the question of fraudulent numbers, fake news, click baits etc. Careful attention needs to be paid to ensuring brand-safe environments, viewable executions and dwell time analytics. The hype around increases in digital and social consumption needs to be viewed in this context.”

She further states that things don’t look very positive for dailies and weekends either. “Circulations and ad revenues were already under huge pressure. Readers have turned to digital and broadcast.  Will they comeback when the lockdown ends? Some will, but the reality is that in SA a lot of these papers have come to the end of the line. Not in any way a cause for celebration – now more than ever we need our press – but a reality.”

Thirty years ago, when the population was under 40 million, and the aggregate daily and weekend circulation was in the millions, they were marketing musts. Now with a population up almost 40%, and circulations down by 70%, they fail the reach test significantly. Worse – their major print competitors, the communities and locals, once the pygmies, are now comparative giants, according to Randall.

A case in point

“When Caxton got going in the early 80’s, a 20 000 distribution was huge. Ten local circulations additively, couldn’t equal one metropolitan daily newspaper, for example. Today, the Sandton Chronicle is almost as big in circulation locally, as The Star, for example, is in its total national sales, population of 10 million plus, gives no worthwhile reach. The same applies in the other major metros. By comparison the locals and communities of all groups now add up to millions of copies.”

This, she says, is where the real newspaper action is.

“If you want to climb – in marketing reach terms – Mount Everest, the remaining SA dailies and weekenders won’t even take you up the foothills! Will the locals? On their raw circulation numbers they certainly do a reach job. Will people continue to read them? We certainly hope so. Because people still want local news Now perhaps more than ever. The communities and locals are really still the only total market coverage deliverers of local news.”   It is for this reason, Randall says, that there is renewed optimism about the relevance of the local and community medium both to consumers and advertisers.

A look at the dynamics overseas

How does local media fare overseas, especially in the USA, and does this hold any lessons for South Africa?

According to Randall, it is no secret that, ‘local’ and community papers are faring poorly in the USA.

“There are predictions that up to 300 titles will close this year.   The reasons are for this are fairly straight forward.  Covid-19 coupled to the impact the pandemic is having on the economy are the immediate cause. As is the switch to digital. But there are also structural issues that have eroded the viability of US papers for years. As we will now try to briefly illustrate, many of these structural problems don’t apply to South Africa. In fact, quite the reverse.”

In South Africa, locals and Knock and Drop carry/distribute this material. In America a huge amount of the distribution is creamed off by the Postal Service. (PS). This has some heavy knock-on effects. It sharply limits revenue to the US locals – US Postal rates are low; the Postal Services ability to micro target is high, so the PS strips away from US locals essential revenues. And it also lowers their desirability. If all the specials and discount coupons and catalogues are in the mail – a lot of them selected to go to specific recipients – why use the more expensive and less targeted locals?

Randall explains: “The reason we keep putting quotation marks around the word ‘local’ with regard to the USA is that the term has a different meaning there. With the exception of USA Today and The Wall Street Journal which are sold nationally, all American papers are local, be they biggies and dailies like the LA Times or the Washington Post, but also zillions of little community weeklies and monthlies. (The New York Times is a hybrid, with most sales in NY City and environs, but copies also distributed to other key Metros.)

So, there is layer upon layer of competing papers. Added to that, many of the big Metro dailies have zoned editions, which are only delivered to subscribers in clearly delineated geographic areas in order to attract local advertising. Much like Caxton does with its locals. (Most US papers are on subscription, and are home delivered. Remember the frequent references to the Kid with a Paper route?)”

This allows for the addition of another layer of complexity, she adds.

“Many of the big zoned dailies deliver a stripped-down paper to the non-subscribers in the area to give advertisers TMC. And it gets worse – that is more competitive and complicated. There is a myriad of other smaller local papers in each suburban or metro area competing head on with the big guys. Some are dailies, some weeklies some monthlies. They compete by having hyper local news, and also keener ad rates. They can do this because of much lower overheads.”

But, it gets messier, still.

“The non-newspaper competition is ferocious and multi-layered as well. There are magazines. There are TV stations (many), both local and national. Ditto, but

even more so radio. And Cinema. And Outdoor. We won’t even try to describe the digital and social media competition. Let’s just say it’s equally layered and competitive,” according to Randall.

“To conclude, we list the last predator stalking the USA local print media.  And it’s not even a medium, it’s The USA Postal Service! (And this is where the Locals in South Africa and their attractiveness and effectiveness take on a whole new dimension.) As in South Africa, what we call inserts, what the Americans call catalogues are a huge and much appreciated by consumers, medium. They generate sales time after time – they’re the direct response medium that keeps on giving.”

It’s because of the cost desirability and total market coverage advantages that the Postal Service offers in the US, that makes South African locals so much more attractive than their competitors, is Randall’s view.

“Consumers like their locals. We know because they tell us they do. But they love the inserts they receive, and they don’t tell us that. They demonstrate it. We also found amazing depth of readership of, and attention to, inserts in the Lumen study in South Africa in November last year.”

She continues: “It’s clear though hard for us to admit, that our advertisement and insert content is probably as much a factor in our success as our editorial content. That is why locals in South Africa are not going to go the way of ‘locals’ in the USA. We haven’t got the layered competition in this space that they have in the USA. We have good editorial. Consumers in vast numbers read us. We’ve shown this in survey after survey since modern Caxton was founded. The ROOTS analysis shows consistently high levels of readership.”

If people think that headlines from the USA stating that 300 locals may close, has relevance to South Africa, think again, says Randall: “Some South African print media are on the chopping board. Not the locals”.

Are things never going to be the same again?

Randall concludes: “Possibly, we’ll see. But will locals be affected? Sure. We can’t defy the Law of Gravity. Advertising spending will drop due to Covid-19. But we anticipate it will do so differentially. Locals will be affected, but we’re betting, not so much! In fact, they may well end up being the only print game in town.”

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