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ThePowerofNewspaperEditorial&Advertising
CountryPressAssociation th 106 AnnualConference atParliamentHouseNSW October26,2006
Presentedby

MicheleLevine,ChiefExecutive GaryMorgan,ExecutiveChairman RoyMorganResearchPtyLtd Melbourne,Australia

Wearetodayattheconvergenceorcrossroadsoftworevolutions: thetechnologicalrevolution,epitomisedbyGoogleborderless,withoutboundariesor barriers theculturalrevolution barriersandboundarieseverywherecommunitiesthatarealmost fortresslikeintheirabilitytolockoutthosewhodontbelong.Thereareexamples everywheretribesinfootball,cliquesatschool,clubs,operabuffs,HarleyDavidson fans,artlovers,students,professors,mothersinmothersclub,alumni,etc. Mediaandcommunicationsareintrinsicallyintertwinedwiththesetworevolutions,poweringthem andatthesametime,beingdrawninandteasedout. Attheheartofthecrossroadsistheconsumeraconsumerincreasinglyincontroloratleast increasinglytakingcontrol. Todayweseetelevisioncomingtousthroughcomputerscreens(NewYorkTimesAugust1,2005).

Log g ing On to Tune InTV

Mor e Pe op le Are Watching The irProg r amsonthe We b

Discoveryour edge
TheNewYorkTimes MondayAugust1,2005
RoyMorganResearch

AUSTRALIA RoyMorganResearchPty.Ltd. A.B.N.91007092944

USA RoyMorganInternationalLtd. Fed.IDNo.522147612

UK RoyMorganInternationalLtd. CompanyNo.3978314

NEWZEALAND RoyMorganResearchPty.Ltd. A.B.N.91 007092944

INDONESIA PTRoyMorgan Research NPWP. 02.194.412.9058.000

AustralianandNewZealandMemberoftheGallupInternationalAssociation

We see advertising through mobile phones (Wall Street Journal online, August 22, 2005) and Advertisersbeingturnedintocontentproducers(AdAge.comonlineAugust23,2005).

TURNING ADVERTISERS INTO CONTENT PRODUCERS

NEWYORKTwonichecablenetworksare findingmarketingbucksinoneofadvertisings

Discoveryouredge

Discoveryouredge

hottesttrends:turningtheadvertiserinto contentproducer. Source:

Aug23,2005

ThisbillboardinaLondontrainstationsendsrelated materialtoBluetoothcellphones.
TheWallStreetJournalonline Aug22,2005
R oyMo rganR esearch

RoyMorganResearch

Somanycommunicationchannels.

Direct Mail Cellular eMail Pager

Website

PDA

Outbound Telemarketing SalesForce Fax

Cust om

er

Contacts

Retail PointofSale FacetoFace

Touchpoints Behaviours

Discoveryour edge

Radio

Delivery Fulfillment

Cu stom ers

Interactions
Phone Ordering Television

ATM Magazines

Event/ Spons orships Outdoor

Placemen t/ Produc t Sampling Newsprint

RoyMorganResearch

Notsolongago,ifyouwantedtointroduceanewproductorbrandintothemarketplace,youcould almostguaranteetoreach90%ofAustraliaspopulationbydoingaSundayNightRoadblock thatis,advertiseatthesametimeonChannel7,9and10duringtheSundaynightmovie. Then came the Internet, PayTV, DVDs, PlayStations, Palm Pilots, Ipods, etc. The last 10 years haveseendramaticchangeinmediapredominantlyfocusedonInternettakeup.

Internethasresultedinanetreductioninawholerangeofactivities.
Mediaconsumptionchanges 19972005
100% 90% 80% 70% 60% 50%

CommercialTV

Magazines In ternet

Newspapers
CommercialRadio

Discoveryour edge

40% 30% 20% 10% 0%

ar 9 8 ar 0 1 ar 0 2 ar 9 9 ar 0 0 ar 0 3 ar 0 4 ar 0 5 Se Se Se Se Se Se Se Se Se M M M M M M M M M ar 0 6 7 0 3 4 p 98 p 99 p 02 p 01 p 05 p 9 p 0 p 0 p 0

Cinema PayTV

WatchedanyCommercialTVonanormalw eekday BeentoCinemainlast4Weeks ReadanyMagazine(lastissue) WatchedPayTVinthelast7days

ListenedtoanyCommercialRadioonanormalw eekday ReadanyNew spaperinlast7days(excl.CommunityNew spapers) AccessedtheInternetatleastmonthly(f romA pr99)

RoyMorganResearch

Increased comfort with the technology is obvious with substantially more Australians now agreeing: Computersandtechnologygivememorecontrolovermylife. IfeelcomfortablegivingmycreditcarddetailsovertheInternet.

Interne tAttitud es Ag re e2000vs2005

IgooutofmywaytolearneverythingIcanaboutnewtechnology Computersandtechnologygivememorecontrolovermylife IwouldliketousetheInternetbutIamintimidatedbythecomplexityofitall IfeelcomfortablegivingmycreditcarddetailsovertheInternet I'dconsiderdoingsomeofmygroceryshoppingontheInternetinthenext12months

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Discoveryour edge

30

30

30 25

27 21

20 18 16 13

20 15 10
6

5 0 2000 2005
RoyMorganResearch

Thechannelstotheconsumerarenowgreaterthaneverbeforeandincreasingfasterthanever.

%doinglesssinceusinginternet
Goingoutwithfriends

Net=%more%less

Shoppinginstores PlayingSport ReadingNewspapers

Discoveryour edge

Listeningtotheradio Readingmagazines Localphonecalls Longdistance phonecalls Watchingtelevision International phonecalls

16.0%

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

2.0%

RoyMorganResearch

Source:RoyMorganSingleSource,March2006

Wearepleasedthatyouhaveinvitedusheretodaytotalkaboutnewspapers.Ithasforcedustogo back and revisit the lessons learned many years ago. Weve come full circle, and there is some wonderfulnewsfornewspapers. 1940s1950s In the 1940s and 1950s, Roy Morgan, under the direction of Sir Keith Murdoch,conductedmany surveys for The Herald and Weekly Times, Associated Newspapers, News, Advertiser, etc. The studiesfocussedonunderstandingreadingpreferencesandbehaviour.
1 Thefollowingexamplesshowjustsomeofthelearningsfromthosetimes .

On the front page of The Sun, Melbourne, Wednesday May 1, 1946: The headline PlottokillMacArthurwasreadby100% of readers male (red) and female (blue). The Surprise Senate Move was read by 100%ofmalesbutonly56%offemales. The picture at the bottom left hand corner was looked at by 93%ofmalereadersand 94%offemalereaders. At first glance, it looks as though the further down the page, the lower the reading levels. This is not a general phenomenonaswellseelater.

Source:ArchivalmaterialfromTheRoyMorganResearchCentrePtyLtd. 4

The Sun, Saturday November 17, 1945, demonstratestheinterestin localnews. A small article, tucked away in the right hand column, Tram stop talks postponed was read by 65% of male readers(20%offemalereaders). Again,itsclearthepicturesarenotedby largeproportionsofreaders.

Page 6 of The Sun, Wednesday April 3, 1946,showscartoonshavestrongappeal among Artisan (blue collar) readers. (High readership of cartoons is still true today.) The cartoon, Mr. Melbourne Day by Day was read by 96% of male readers and88%offemalereaders. Even the tiny Sleepwalker cartoon at the bottom ofthepagewasreadby92% of male readers and 60% of female readers. If we now look at the Editorial on this page, female readers were consistently more likely to read the Editorial than weremalereaders.

If we look at the Editorial on Page 6 of The Sun, Tuesday January 15, 1946, we see male readers higher than female readers for most parts of the Editorial. It would seem people willlooktotheEditorial,butwillonlyreadthe topicswhichinterestthem,andnotsurprisingly, differentthingsinterestdifferentpeople. This page also shows high levels for Artisan (bluecollar)readersofFIFTYFIFTY(letters), 67% of male readers and 72% of female readers. This letters readingisparticularlyinteresting. Wetendtothinkofinteractivityasarecent,or even new phenomenon. This data from 1946 suggeststhatfeedback,theopportunitytohave your say, or hear what others like you have to say,isperennial.

IfwenowlookattwoJKitchen&SonssoapadsweseeoneforVelvetSoaponPage9,readby 6%ofmalereadersand6%femalereaders,andoneforLuxonPage19whichwasreadby17%of maleand39%offemalereadersthehighestonthepage(TheSun,TuesdayJanuary15,1946).

Fromaneditorialperspective,atfacevalue,thisexampleislessthaninteresting.However,thereare severalimportantmythsexplodedhereofrelevanceforbotheditorialandsales: (a) Thelaterpage(page19cfpage9)didnotreceivelessreading (b) Asoapadcanattractinterestwiththerightcreativepicture (c) Thetopofthepageisbetterforattractingattention. Wenowcometoanearlynewspaperinserted(magazine)supplementTheSunWomensMagazine WednesdayApril3,1946.Atleastthefrontpageofthissupplementwasreadby84%offemale readersand46%ofmalereaders.

It is important to note that a newspaper inserted (magazine) supplement, like any article or component of a newspaper, will not be read by everyone and that those who choose to read it may have a different profilefromthetotalreaderbase. This is relevant for some of todays newspaperinserted magazines such as The Weekend Australian Magazine which has morereadersthanTheWeekendAustralian (To March, 2003: 927,000 readers cf 910,000readers)andmorefemalereaders. Other newspaperinserted magazines also have fewer readers than the newspaper whichcarriesthem.

The data also shows evidence that different subgroups in the community have different degrees of interestinvarioustopics.Forinstance,MONEYMARKETS,MININGonPage17ofTheSun, TuesdayFebruary5,1946,wasofmuchgreaterinteresttotheBetteroffpeoplethanArtisans (bluecollar),Page23ofTheSun,SaturdayJune22,1946seeallthezeros!

Butnotethecartoonatthereadership! But note the cartoon at the bottom of the page achieved 75% of male and 71% of femaleartisanreaders. The same page, MONEY MARKETS, MINING on Saturday June 1, 1946, did achieve interest from Artisans, with the headline General Motors Holdens Preparing For Production of Australian Car read by 24%ofArtisanmalesand 5% of Artisan females. This was obviously something that held some relevance for the group even though as a general rule, company information was not ofinterest.

Sport,itappears,wasnotasimportantin1946asitistoday.Thisisaninterestingphenomenon,a manmadephenomenon evenamediamadephenomenon.

Finally,liketoday,thereisnownodoubtthat Beautiful Women interests both male and femalereaders62%ofwomen,61%ofmen, see Page 7 of The Sun, Tuesday February 5, 1946. It is worth noting the high readership by women (57%) of the STRAIGHT or Swirl advertisement while 71% of men read DoubleTaxDeadlockwithBritain.

When Sir Keith Murdoch died, little interest wasshowninthiskindofresearchthefocus shifted to sales, ie circulation and readership audience measures to demonstrate reach to advertisers. 1960s1970s Inthe1960s,thefocuswaspredominantlyonmeasurementofmediaaudiencestohelpinsellingad space. Anotherimportantissueinthe60sand70s,wasthatofregularreadingvscasualreading.This wasimportantfromboth acontent/editorialperspectiveandanadvertisingsalesperspective. Fromtheeditorialperspectiveloyalorregularreadersareveryimportant.In1974,RoyMorgan Research provided the attached special analyses for Sir Philip Jones (Chairman, Herald Weekly Times) which showed that The Sun had more loyal readersthanTheAge,TheSydneyMorning Herald,ortheSydneySun/Mirror.(Attachment4) From an ad sales perspective a more casual reader base will result in the publication reaching a largeraudienceoverseveralissues. 1980s1990s Thefocusinthe1980swasreadershipprofilesandmatchingtheprofileofreadersagainstthetarget market: - Whoisthereader? - Whatdotheybuy? - Whatelsedotheyread,watch,listento(earlymultimedia)? - Whatmotivatesthem?Whataretheirvalues?

MultimediaandMediaMix The 1990s saw a real focus on newspapers within the multimedia context. The new paradigm of communicationproductivityemerged,alongwiththenotionoftargetingcustomerswith engineering likeprecision. In1998,wepresentedapaperattheInchClub,Proof!Samebudget,get3050%greatervalue!). In this paper, we demonstrated that the replacement of some TV in the media budget with print wouldsignificantly increasereach andreducethetotalcost(seebelow).

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Inthe1990sitbecameobviousthatincreasingnewspapersshareoftheadvertisingdollarreliedon multimediaadvertising. Therealissuessincethe1990saremajorchangesinmediaenvironment. Lotsofthingshavechanged.Wehaveseen:colourinnewspapers,newspaperinsertedmagazines, dramaticallyimprovedfreeandcommunitynewspapers(includingstrongregionalbranding),internet usagesoared,payTVetc. Theoneconstantisthatattheendofthemultitudeofofferingsistheconsumeraconsumermaking choices. Roy Morgan Research data shows clearly that newspapers, and newspaperinserted magazines, are a channel by which the consumer can be reached quickly (newspapers and their magazinescommunicatesignificantlyfasterthanmagazines). If the newspaper is thought of as the end point the choice the consumer makes it is easier to understandhowtodrivereadership(andreaderspercopy). Webelievetherearethreemaindriverareas: (a) ExternalfactorsEveryoneknowstherearegoodnewsdaysandbadnewsdays.For instance,duringtheWarinIraqreadershipofTimeMagazineincreasedfrom353,000 readersinMarch2003to561,000readersinApril2003. Otherexternalfactorssuchas competitionalsohaveanimpactonreadership,egiftherewasnotelevisionorinternet,there wouldprobablybemorenewspaperreadingandmoretimespentreadingnewspapers. Buttheresmoretoitthantheluckoftheday(agoodnewsday).

Theothertwodriversofreadershipare:
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(b) ContentEverythingaboutthepublicationservestocreateinterestandcredibility,andthe particularreadingexperiencewhichinturncreatesreadership,rereading,passonreading, purchasing,deeper,longerandmoreexclusivereading(ienoneedtoreadanyothers)and (c) PromotionAdvertising,marketing,andpromotionalactivities. Thatbringsustothepresentandthefuture. Thegoodnewsisthatnewspapersaretransformingnotdisappearing. Thefollowingexampleshows thatwhileaverageissuereadershipoftheSydneyMorningHeraldisflatoverthelastthreeyears,if we include readership online the total readership has increased by 23%. For more examples see Newspapersaretransformingratherthandisappearing,andalsoRoyMorganResearchandWebsite VisitationMeasurement.

Newspapersaretransforming ratherthandisappearing
SydneyMorningHerald 2003 '000 2006 '000 879 % Difference 0%

Discoveryour edge

MondayFridayav.Issue readership

879

Newspaperonly smh.com.auonly Bothnewspaper&online TOTALREADERS

683 299 196 1178

637 457 242 1336

7% +53% +23% +13%

RoyMorganResearch

Source:RoyMorganSingleSource,March2003&2006

Theoveralltrendforcountrynewspapersissimilartoothernewspapersindeed,othernoninternet media. ThecluetothefuturecomesfromtheonlineworldthegrowthofsuchphenomenonasMySpace and the whole idea of communities of interest andsharedinterest.Thisistheculturalrevolution mentionedatthebeginning. WhileallmediacompeteforBigNewseventsinternationalnews,nationalnewsevenStatenews, theindividualalsowantstobepartoftheirlocalcommunitythatsrelevanttothem bothfor: thatcommunitysnews,and
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 anunderstandingofhowthebignewseventswillrelatetotheircommunity. Todayonlytheregionalnewspaperdeliversthat. Thechallengeistoensurethatthisstrongneedcontinuestobemetbyregionalnewspapers(backto SirKeithMurdochsfocusonunderstandingwhatreaderswant).Butalso,today,remainingrelevant willprobablymeanthattheactualmedium(hardcopy)willhavetobesupportedandenhancedby communityfeedbackandinvolvementviaonline,communitywebsites,blogsetc.Embracethemand usethemratherthanfightthemandfearthem(theearlyresearchtolduspeopleloveseeingtheir viewsinprint).

st 2000The21 Century

TheearlyresearchdonebyRoyMorganforSirKeithMurdochdebunkedmanyofthemythsthat peoplestillbelievetoday. 1. Articles/adsonthefrontpagesarealwaysreadbymorepeopleFalse 2. Articles/adsonthetopofthepagearealwaysreadbymorepeopleFalse 3. AdsindeeplyinterestingpageshavegreaterimpactthanthoseinlowinterestpagesFalse Letusmakesurethatthedisappearanceofnewspapersisjustanothermythwecandebunk.

Forfurtherdetailscontact: MicheleLevine,ChiefExecutive,RoyMorganResearch Office+61(0)392245215Facsimile+61(0)396291250Mobile+61(0)411129093 Email: Michele.Levine@roymorgan.com

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