Newspaper circulation: Death by a thousand cuts

Once a week all over the land, the head of circulation at a newspaper will receive an email. The often dreaded sales figures email. On this your career rests. You are either saved for another week and the children can eat, or you’ve just added another nail to your circulation career coffin. Because, be in no doubt, if the figures are poor, It’s all your fault.

The email will have come from your stats team, or perhaps from the wholesaler who handles your logistics for you. It will have been shared at precisely the same time you received it with many stakeholders throughout the business, such as editors, the MD, sales directors and the like, as well as your own team. There is nowhere to hide.

You can hear the silence around the building as everyone opens the email and digests the contents, line by line and minus figure by minus figure. Then, depending on the size of your building there may be about 10 minutes respite before you hear the MD’s or (even worse) the editors feet heading towards your door, followed, not by a cheery ‘good morning how are you’, but by ‘what the ####’.  During those 10 minutes you basically have three options to consider: A; How best to ask for a pay rise at this difficult time B; Getting your 10 stock failure reasons in order – I never actually blamed the weather, but lots of others did - and C: figuring out how to get your coat and hand the car keys back with a modicum of dignity intact.

As a circulation pro you would often have had a good inkling of what was coming. Daily estimates were available, so the weekly email wasn’t usually a complete surprise. You could prime people if you thought it was going to be a rubbish week or walk about with a spring in your step like the god of circulation if you knew it was going to be good. The danger of course was if you got either of those the wrong way round. When the figures were awful, but you had been walking around with a smile on your face for a couple of days you were clearly an idiot. And when the figures were good it was entirely down to the front page story about the local parish councils annual meeting minutes and couldn’t possibly have had anything to do with the hard work your team had put in. Either way, you lose. Twice.

It was hell. There were many weeks when you wanted to curl up into a little ball and hide in the admin cupboard. And the agony didn’t end with the email. There would then follow a telephone conference with your peers from around the UK where everyone who had performed better than you – which was most of the people most of the time, would royally take the piss. There were some papers that generally did very well, Manchester and Liverpool spring to mind and others where, however rubbish my figures were I knew I would always beat – thank you Birmingham and Coventry. They were, and probably still are, absolute basket cases that Trinity Mirror had been unsuccessfully trying to get rid of for as long as I can remember.

But there were also many occasions where your paper had performed really well. When your town had been hit by a flood or some other monumental story had landed that couldn’t help but sell you masses of additional papers, you celebrated. The fact that most of the extra papers had been bought to soak up the flood water was irrelevant. It’s a very sad fact that bad news sells newspapers, or at least used to. (Hopefully the flood hadn’t been too bad and mostly affected a part of town nobody really cared about. Both of the old dears who had been seen floating away had been caught for the front page by your snapper before being successfully rescued by the fire brigade and most importantly, no cats were harmed). But more often than not, when that email landed, you could almost taste the glumness.

Never in my entire career did we have a period where we sold more papers than last year. Odd weeks were up but overall we were managing the long and painful decline of the industry.

When I joined The Western Mail and Echo in 1993 newspaper sales performance was still quite strong. Year on year sales figures would typically be within 0.5% of last years. But never 0.5% up, always down. This was considered entirely acceptable as any loss in sale was mitigated by annual cover price increases. And in any case, what’s 0.5% between friends? As the 90’s rolled on 0.5% became 1, then 2 (still no panic though).Trouble started when the number became 3 and it was clear the downward spiral was permanent and increasing in velocity with every passing day. (At that time I was a ‘free newspaper man’ - we were delivering 500,000 free newspapers each week - and I have to admit that seeing the decades old complacency of the old guard being given a good shake was quite amusing).

By the time I had jumped to the dark side of ‘paid for’ circulation and become  manager of newspaper sales at (what is now) Media Wales in 2009  I inherited the worst performing titles in Trinity Mirror and it really wasn’t funny at all.. Everything is audited twice a year and the figures are then published by ABC (The Audit Bureau of Circulation) for everyone to see. This is obviously important as the entire financial stability of a newspaper company rests on two planks: Advertising revenue and circulation revenue. Without strong circulation, advertisers will walk away because they don’t get response, which reduces ad revenue. If there are fewer worthwhile adverts, readers walk too. If ad and circulation revenue fall then there’ll be less money for decent journalist and so the quality of the paper as a whole will suffer, again leading to fewer readers. It’s a particularly vicious circle. Having circulation figures which were annually 15% less than last year was clearly unsustainable.

The pressure to maintain sales was enormous. We had fairly hefty marketing budgets available to us and basically chucked the kitchen sink at each title with all manner of promotions and schemes to prop up the figures. But nothing ‘stuck’ and the churn in customers remained relentless. As far as I’m aware only one newspaper group has ever ‘cracked’ and made the numbers up. In the late 90’s, the folks up in Birmingham, determined to stay ahead of their competitors  were alleged to have been falsifying their circulation figures for a number of years by  thousands of copies a day. (see extract from Marketing Week from 1999 below). Considering the auditing regime we all worked under that must have been a phenomenal effort by all concerned. And of course, having decided to do it once, they were then locked into a spiral of lamentable shadiness which lasted years. The rest of us just learned to take sales figures on the chin with whatever humour we could muster.

A colleague once calculated that we would sell the last copy of the Western Mail around the year 2025 – when we would be printing two copies per day (just in case) and selling 1. Then, without warning, that final person would die, or worse, buy an IPad and not wander down to the newsagents with the dog ever again. It’ll probably happen on a Tuesday – a typically rubbish day for sales. We all hoped that we would be able to retire gracefully in 2024.

A friend of mine still in the business was visibly shaken when his paper, one of the biggest in the UK, went below 100.000 copies a day for the first time. It’s now on 38,000 copies a day and still one of the UK’s largest circulating regionals. My own daily, during my time, went from 30,000 copies per night to 21,000 – although we did manage to slow the decline from minus 15% per year to a more palatable minus 7%. That put it nearer the top of the charts unbelievably but was unsustainable and it now sells 13,000 copies a day. Within two years it will be under 10,000 – in a capital city with a circulation area population in excess of 800,000. Sobering isn’t it.

It would be easy to blame the internet for all of this, so we will. Peak newspaper readership was around 1948. Few people had TV’s, commercial radio didn’t exist. From then on it was downhill all the way. The first major nail in the coffin was Autotrader, which almost over-night took away motors advertising from the back 10 pages of the paper – one of the staples of classified income. That cost us a fortune, but we didn’t see it coming or react. Next was property advertising – another 10-20 pages of ads gone. Jobs were next. As soon as they went on-line there were some very thin papers indeed. Jobs, cars, houses, all gone and at that point reality dawned and we knew we were permanently screwed.

But we still didn’t do anything. In the early days of the internet we launched some competitors to Autotrader, (the first publication I can think of to abandon print and go entirely on-line), Rightmove and Monster, but they were all, how can I put this politely, rubbish. And of course they didn’t generate any money. Advertisers shied away and customers didn’t have to pay to access them, so although everyone finally woke up to the fact that the internet was the future, no-one had a clue how to monetise it. And many would argue that most ex-newspaper companies still don’t. Trinity Mirror (now called Reach) has just posted a huge loss for the first half of this year which probably tells you all you need to know.

Probably the final final nail in the circulation coffin was the decision by Trinity Mirror around 2013 to adopt a ‘digital first’ policy. Newspapers publish once a day. There used to be multiple editions, ‘late city finals’, but mostly now they are published once, in the morning. So, by the time you read it much of the content can be up to 24 hours old. The internet is live and ‘digital first’ said that from now on everything goes on the web first as soon as it breaks. Which is of course a perfectly sound and sensible idea. Except that it means no one has to wait until tomorrow to read it in the paper (at a cost of £1 each) because they can read it right now for free, which is great because that’s what we all want – immediacy – with the added bonus of not spending any money.

The effect of this policy was brought into sharp relief very early on following a horrific murder in mid Wales. Because it was a story that was continually unfolding journalists who would ordinarily have been preparing copy for tomorrow’s newspapers were now posting on-line straight away. Clicks went through the roof and newspaper circulation fell. By the time the newspaper came out, everyone already knew every detail. I remember vividly chatting to the editor of the day – who was responsible for ‘digital first’ but was also passionate about his newspaper – as the hugely disappointing sales figures came in. They weren’t even remotely what we were expecting and at that point I think we both knew it was the end.

Similarly when Cardiff City were in the Championship and challenging for promotion the South Wales Echo had once of its best circulation years for ages. When they reached the Premiership and suddenly their news/goals/games became available everywhere and immediately, circulation of the Echo dropped like a stone. No-one needed the paper anymore.

But actually, all of that is OK. There was never a piece of paper, or an email that promised newspapers would last for ever. Like everything else their time came, peaked and went. Most circulation people now must feel like that bloke trundling along in his horse and cart when suddenly a car zooms past…desperately hoping to get to retirement before someone pulls their plug. I know that’s how I felt. I can’t remember the last time I bought a newspaper, but feel as well informed as ever, probably better than ever in fact. When I see my dad reading his Telegraph I always think what a funny thing that is, a few huge sheets of paper with last week’s news in it which has cost him £1.50. He’s at one end of the spectrum and at the other are my children, none of whom have ever bought a newspaper. (Even when they knew my career depended on it for goodness sake!).

And besides, there is still more money in print than the web - the bean counters at least will tell you that 10,000 copies a day at £1 each is exactly the same as ‘the good old days’ of 40,000 a day at 25p each – so until someone works out to make money out of their web content it will be the old fashioned newspapers that continue to provide much of the revenue. We know they are doomed, but the industry is still hugely reliant on them.

And in the meantime, for all of the circulation people out there, now that the boot is on the internet first foot, perhaps those weekly sales figure emails won’t be quite as terrifying as they used to be.

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 Can ABC stem loss of industry’s trust?

Advertisers’ faith in the ABCs has been rocked by Trinity Mirror’s revelation of circulation fraud. Can the ABC bureau recover? asks Amanda Wilkinson

By Marketing Week 18 Nov 1999 12:00 am

The Audit Bureau of Circulations is facing a crisis of confidence following Trinity Mirror revelations that circulation figures for three of the group’s publications have been overstated for up to six years.

During that time, the regional newspapers concerned – the Birmingham Evening Mail, The Birmingham Post and the Sunday Mercury – have all been subjected to several random inspections by teams of ABC auditors. The last visit took place three months ago. ABC auditors failed to detect the alleged exaggeration revealed by Trinity Mirror in a statement to the Stock Exchange on November 4.

The board of Trinity Mirror estimates that over the nine half-yearly ABC reporting periods since June 1995, the actual circulation figures were about 17 per cent less than the stated ABC figure. In the case of The Birmingham Post, the figure is nearly ten per cent.

ABC director of consumer press Julie Ferguson says: “They were inspected in the past three months. There were a number of things picked up that weren’t being conducted satisfactorily, but they weren’t things that would have exposed this apparent problem.”

The period in question dates back to when the titles were owned by Midland Independent Newspapers, which was acquired by Mirror Group in 1997. Mirror Group merged this July with regional newspaper publisher Trinity to form Trinity Mirror.

Trinity Mirror claimed in its Stock Exchange statement that the irregularities which were uncovered – following an internal review with its new auditors Deloitte Touche – were “part of a systematic process in Birmingham to overstate ABC circulation figures”.

Apart from when changes in ownership occur, circulation figures are audited on a six-monthly basis by either ABC auditors at the request of the publisher or by the publishers’ auditors which are trained by and are considered to owe a duty of care to the ABC. The ABC is now in the middle of its own investigation into the circumstances surrounding the apparent irregularities.

On its own admission, the ABC is only entitled to have access to records that relate to the last return – covering the period January to June 1999 – which was audited by Mirror Group’s then auditors PricewaterhouseCoopers.

Ferguson says: “We don’t have the right to inspect anything further back than the last set of returns and that is what we will be doing to give the industry a figure it can realistically work from.”

Pending the outcome of its investigation, the ABC – in agreement with Trinity Mirror – has suspended all the Certificates of Circulation relating to the titles concerned.

A new deputy managing director and a circulation director have been appointed by Mark Haysom, managing director of Trinity Mirror subsidiary Birmingham Post and Mail. They will replace circulation director Ian Hinton, who has left the company following the discovery of the irregularities.

In a statement, Chris Oakley, chief executive of Regional Independent Media, who was chief executive of Midland Independent Newspapers at the time of its sale to the Mirror, says: “I have asked for, but still not yet seen, any of the evidence on which Trinity Mirror has based its allegation. Therefore I cannot comment.

“I can say that under no circumstances would I have had any part in action outside the ABC rules to inflate sales figures. Nor would I have condoned such action by anyone else within the Midland Independent Newspaper Group.”

Former circulation director of MIN Neil Jagger, who left the company three months after the Mirror takeover in 1997, is now circulation director of the Evening Standard. He has been unavailable for comment.

The ABC investigation has been welcomed by other regional newspaper publishers.

Tony Witts, managing director of the Wolverhampton Express and Star, says: “What has happened is very damaging to the credibility and reputation of the regional press.

“We hope, however, that it will lead to stricter rules governing the reporting of circulation figures.”

Manchester Evening News managing director Ian Ashcroft adds: “Clearly this was difficult to find. We need to improve what we do.”

Ray Kelly, chairman of the media policy group for the Institute of Practitioners in Advertising, agrees. “It’s fairly obvious some changes are needed.”

The ABC has been described by one press buyer as the “healthcheck of a title” and it is one of the key factors which drive the decision to book advertising. For that reason, the IPA’s media policy group has called for “appropriate compensation” for advertisers.

Kelly comments: “Compensation should be in line with circulation shortfall going back over the period in question.”

So far, Haysom has written to about 6,000 advertisers (MW November 11) offering a freeze on ad rates until January 2002 on The Birmingham Post, Birmingham Evening Mail and Sunday Mercury. He is also offering a ten per cent discount on all ads booked throughout next year in those titles.

Trinity Mirror has made provision for a liability of up to £20m, but it expects the true cost to be nearer £5m. In any event, the group will no doubt consult its lawyers upon possible avenues of recovery.

A Trinity Mirror spokesman says: “We are working with advertisers looking at their particular situation.”

He claims that readership figures have remained relatively stable, and adds: “Advertisers haven’t been disadvantaged because readership demonstrates the shape of the business – independent of circulation figures.”

MediaVest client services director Nigel Conway says: “In the future, we have to ensure the ABC is acting in its role as a guardian because agencies are trading on that data.”

Mediacom TMB press director Steve Goodman comments: “People use both sets of figures – ABC and readership. Readership figures are used more to plan a combination of titles rather than buy an individual title.”

It will be some weeks before the ABC is able to provide buyers with new sets of circulation figures. But it will be even longer before its rules are changed to prevent the same thing happening again. Even then, there is no guarantee the new rules will not be abused.

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