A CPT model “has the potential to polarise the press market”
In response to Derek Jones’ article ‘Paywalls take back-seat as trading debate gets serious’, David Spon-Smith, consultant at Accenture, wonders what a CPT model would mean for some publishers (as well as the NRS)…
“News International’s red tops deliver huge readership figures and subsequently the cheapest CPT in the UK press market. NI’s argument is why should this be the case? If advertisers are prepared to pay top dollar for ITV and C4, then why shouldn’t they do the same for The Sun or NOTW? The logic is sound.
However, this has the potential to polarise the press market. I think it is a safe bet that if NI do push for a CPT model, Associated will not be far behind. The MOS, Daily Mail and Metro all deliver strong coverage, and would no doubt do suitably well from a CPT model, should it arise. But what about the rest of the pack? Those whose circulations have suffered the most, but have protected their pricing will not be keen to trade on a CPT basis. They will be exposed by this metric.
The other issue is where does this extra investment come from? NI will move to a CPT basis if they feel they can make more money from it. But the overall press ‘pot of money’ will not grow. If anything it will continue to decline as it has to compete with a growing and fragmenting media marketplace. Simply put, they will look to demand more share as advertisers and agencies will kick back against blatant price hikes. If Associated join suit, where will this leave the other major press media owners as their potential market shrinks?
There will be teething issues around formulating a viable trading model, but TV companies have been doing this for years, and they have been able to maximise the value of their content by optimising against various demographs, in a sophisticated way. Newspapers are currently well off the pace in comparison, but NI have the resources to meet this challenge. The rewards of extra revenue and a stream-lined trading CPT across their print and online output will be the proverbial ‘carrot’.
Lastly, from an auditors point of view, I don’t think this will be an issue. TV has traded in this fashion for many years so we are well versed in the intricacies of the metrics involved. Most agencies and ourselves already provide CPT data by media for many clients so there will already be an expectation of CPT pricing levels against the main audience demographics. The main issue, I would argue, is actually NRS. The TV model works due to the sophistication of the BARB data it relies upon. Currently, NRS is off the pace and would need investment to bring it up to the standards required.”