News Corp marketing boss: ‘sales promotions are slowing print circulation declines’

Eales speaking at INMA 2015 World Congress in New York

Eales speaking at INMA 2015 World Congress in New York

News Corp Australia’s marketing and sales boss has said the company “threw the baby out with the bath water” when it abandoned sales promotions under previous CEO Kim Williams, claiming reintroducing them has helped slow sales declines.

Speaking at the International News Media Association (INMA) World Congress in New York today Damian Eales said he hoped by next year promotions, where consumers pay a small amount to receive a gift – such as a Disney or Mr Men storybook – would once again be a profit centre for the business.

Eales was also candid about the importance of print to the future of the publisher, telling a room full of global newspaper executives: “At News Corp we believe that the printed paper will always be a vital component of our cross platform news media offer.

“Although print circulation may decline, alongside a proliferation of news media alternatives in the digital form, that doesn’t mean you have to accept that the decline will be what it will be.

“Our response to this has been: grow digital faster and slow the decline in print.”

Mr MenKey to this strategy of managing the decline of print were these promotional campaigns, Eales told the room, citing last year’s David Attenborough DVD promotion, which he told the room helped the publisher sell 600,000 incremental copies of its newspaper in 14 days, adding 100,000 extra readers in incremental audience.

“We actually sold in 14 days 3.4m DVDs, admittedly at $2.50 each, and that represents six per cent of the total (DVD) market for the full year, in our country,” he said.

“We came out net profit positive, but it was more than that, it made a profit of close to $1m after the promotional costs and grew circulation.”

The senior News Corp executive, who has been “temporarily” heading News’ sales team since March, said over 18 months they had run five of these promotions selling 15m products, with the most recent of these an ANZAC coin promotion raising more than $500,000 for charity Legacy.

After joining News Corp in September 2013 Eales said he felt the need to reinstate the promotions which were “folklore” within News, despite them being seen by some as uneconomical.

“These promotions were folklore in our business because of their past popularity with customers,

but they also represented a form of promotion that had been cancelled because they were also deemed unprofitable,” Eales told the room at INMA.

“They were seen as a luxury we could no longer afford. I felt we had thrown the baby out with the bathwater with these traditional promotions.

“I knew with our buying power, our promotion power and the fact that we had 3,500 distribution outlets throughout the country we could reengineer purchase with purchase promotions and make them both popular and profitable.”

Questioned by the audience about the sustainability of using such promotions to boost circulation Eales conceded: “The reality is that we got a magnificent spike in those two weeks and that some of the promotions would mean positive circulation growth for that period – which is obviously completely against the trend in our market.

“The circulation declines afterwards but we held it for probably one week, incremental, beyond it, but we think the cumulative effect of all these promotions is significantly slowing circulation (decline) over time.

“Certainly if you benchmark us against and our competitors, in the Australian market, the effect is very clear.”

Eales also revealed that since reinstitating the strategy it was at break even for the publisher, but vowed to once again make it a profitable part of News’s Australian operations.

“This part of our business was a double digit million dollar cost centre in years gone by,” said Eales.

“This year it is a break even part of our business – next year will be a profit centre in our business.”

Nic Christensen in New York 

Mumbrella will have a full wrap up of the next set of ABC circulation figures when they are released this Friday.

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