It hasn't gone unnoticed that regional press has been heavily battered due to its exposure to the fall in ad revenue from the three hardest hit business sectors - Property, Recruitment and Motoring. These sectors represent a huge proportion of the overall ad revenue in regional press and the consequential knock on to the associated free newspapers is inevitable.

 

Johnston Press has been hit hard by the economic downturn with the overall revenue droppiing 12.4% in 2008 compared to 2007. This has accelerated in 2009 with ad revenue down over 35% so far.  Areas such as recruitment and property dropping over 40% and 54% respectively in the last quarter of 2008 as the situation deteriorated at an accelerated rate. Over 1000 jobs have been shed and its likely to shed its Irish titles to reduce debt. Given that Ireland is likely to be the next country to do an 'Iceland' where it will need to be bailed out in the coming years then thats probably a good call. The economy's boom over recent years has been too heavily based on property and the consequence of this in a downturn are likely to be severe.

 

Already Northcliffe is expected to lose about 1,000 staff as they cut costs in an ongoing process to reduce headcount by around 20%. - double what was previously forecast. Ad revenue for Q1 2009 is down 37% so the impact on Northcliffe's profitability will be harsh. Advertising revenue at Daily Mail parent group is down 24% on a national basis which shows the weakness in the regional division by comparison is very stark indeed.

 

Trinity Mirror's figures are pretty awful with  the closure of 32 weekly titles since 2008, the sale of 4 titles and 1,300 staff cut.  The Black Country Mail Extra, the Wolverhampton Adnews, the Daventry Post, and the Ashby Herald are all to close shortly. Ad revenue at Trinity also plummeted 30% in the first two months of 2009. The share price fall from grace mirrors that of the banking sector with the share price dropping from 314p to 25p over 12 months.  

 

Newsquest has apparently asked staff to reduce their hours and/or take unpaid leave as it looks to save costs as quickly as possible. This is on top of the pay freeze and job cuts announced in December. Q4 2008 showed nearly a 60% drop in revenue from property advertising for the group with overall classified revenue down over 35%. Newsquest are owned by US company Gannett where the Gannett CEO, Craig Dubow, said the ongoing deterioration in the advertising market had affected results substantially.  "Our results for the quarter reflect the unprecedented turmoil in the economies of both the US and the UK and in the financial markets ... Despite economic conditions, we pressed forward to transform Gannett and position it for the future and more favourable business conditions," Dubow said. Other groups have been similarly affected with The Observer Standard Newspaper group actually slipping into administration.

 

So what is the likely knock on for free newspaper? Its not hard to see that there is and will be an increasing drop off in free newspaper coverage across the UK as titles continue to close. Of course we accept some of this reduction will manifest itself in form of vastly reduced overlap between free newspapers but overall it makes the channel less viable as channel of mass coverage. Particularly when trying to target certain demographics then its going to become far less cost effective to reach certain groups. Some will argue the reduction in this channel which has been cluttered and clumsy is not a bad outcome but where some of these free newspapers still provide a meaningful local source of news then it is a sad demise.

 

Ten years ago free newspaper coverage of  UK households was around 76% nationally but this is decreasing at an accelerated rate and the levels of 50% coverage are not far around the corner. When it comes to choosing your door to door distribution channel then it may be prudent to take into account this forecast before investing too heavily in the channel. On a  brighter note the clutter will reduce and ROI could increase.

 

Looking at reports from the Royal Mail then you will be led to believe that everything went out as per normal in February 2009 for mailsort and door drops but at doordrops.co.uk we're not convinced. Looking at various client result datasets then the figures tell a different story. Across the marketing spectrum from warm mailings to cold mailings and door drops then something was definitely amiss. Response rates are down from anywhere between 10% and 25%.

 

No doubt the media owners among the distribution fraternity will suggest we were all out tobogganing and building snow men in the snow. Of course the weather does affect consumer behaviour but when the product is a must have and not a luxury then there is more to it than that. We think that the volumes across both addressed mailings and unaddressed mailings was delayed or failed for marketing material but without physical evidence of this then its difficult to prove.

 

You may want to analyse your results a bit closer, particularly around the early days of the month of February and see if your response rate matches the predicted response curve. If its way off then maybe you should be asking some questions of your distributor too.

 

 

 

 

All the team at doordrops.co.uk wish our readers a Happy and Prosperous New Year!

 

On this, the first day of 2009 'prosperous' is not a word that many of us in the industry would associate with advertising, direct marketing or indeed door drops as we enter the new year ahead of us. Typically advertising and PR spend are reigned in during an economic downturn and doordrops will be no different. We are expecting a reduction of circa 20% in door drops and the recent Royal Mail price increase announcement will do nothing to help limit this decrease in volume.

 

That said, then just as in all economies where a recession gets rid of those businesses that operate poor strategies or offer unwanted products then the door drop industry will also follow a similar path. Those door drop agencies and distributors that have been getting away with sub-standard targeting, strategies and poor levels of services in the boom times are likely to suffer and experience larger drops in volume. The same will go for distributors where if the product they offer delivers poor performance then advertisers will vote with their feet.

 

Clients will be focusing even harder on ROI and clear, measureable results which they will expect their door drop agency/distributor to deliver. Online advertising was the largest impact on doordrop volume decreases in 2008 but there are signs that the online advertsing growth has now slowed significantly so the real threat in 2009 will be the economy itself and our own ability to deliver results.  Those who innovate in door to door and deliver what they promise will be the ones who prosper. Those dinasours that rely on outdated techniques and practices will be the first ones to fall.

 

We at doordrops.co.uk think 2009 will be a watershed where doordrops will improve in performance as clients reign back spend and focus on performance rather than volume and the door drop medium will again rank highly in the media hierarchy for brands and consumers. So the challenge starts here -  who's going to step up?

  

 

 

 

 

 

The Direct Marketing Association (DMA) is launching its first Door Drop Awards, to celebrate the best doordrop campaigns of 2008.

The DMA Door Drop Awards will showcase the most effective use of Door

 

TNT are running their annual doordrop conference again this year at BAFTA on the 16th October 2008. It promises to be an enlightening event with clients, agencies and distirbutors sharing their

Evidence from Media Monitoring show that doordrop volumes are slowing. Volumes in the first eight months of the years are down 14% versus the same period last year. This is not unexpected with a