Newspapers' woes spotlight Project Juno's flaws
Flaws in the viability of Project Juno have come to light with sources telling The Drum that two of the project's major publishers - News UK and Northern & Shell - have shown concerns as it pushes forward for completion in Autumn 2017.
UK newspapers in the first alliance of its kind
Of the six newspaper groups involved - News UK, Trinity Mirror, Guardian News & Media, DMG Media, Telegraph Media Group, Northern & Shell - some have got more robust data than others so whether they would be willing to give away their crown jewels is a source of contention in the way inventory would be pooled.
One source close to the discussions suggested that News UK might be feeling doubtful about centralising inventory for this reason, since it carries “a premium against the market” with brands like The Times and The Sunday Times, a fact it is understood to have realised as the project progresses.
“They are doing well in the market and they have made a lot of different acquisitions in different fields they are going to toss in,” the source said. “By going into something like this all their premium is lost.”
The publisher declined to comment to The Drum about its rumoured reluctance to join the alliance. On the outside, however, News UK is still part of Project Juno and has shown no public signs of pulling out.
Further doubt has been cast over Northern & Shell’s involvement in the alliance. Two separate sources close to Project Juno confirmed that the publisher is “sitting on the outside” of the discussions, and “may not want to part with the cash and inventory”. Northern & Shell could not be reached to provide comment on this issue by the time this article was published.
The apparent reluctance from both News UK and Northern & Shell is the latest in a string of obstacles in the way of the alliance’s launch.
In August, the six major newspaper groups launched a feasibility study to gauge whether the pooling of ad sales would help to counter declines in print ad revenue across the market, headed by advertising executive Steve Booth, one of the co-founders of BLM, and produced in collaboration with Enders Analysis.
At the time, sources close to the matter told The Drum the study would run for a short period. Now, nearly four months on, the future of Project Juno is in doubt as the newspapers struggle to find common ground.
Executives heading the discussions have given themselves a “tight deadline” to iron out the legal side of a prospective merger in the next four weeks to ensure it complies with anti-trust rules. Among the figures include Matt Shreeve, formerly trading director at News UK, who is doing the “unbiased crunch of numbers” and shaping out a model for the newspapers to trade on, Andy Atkinson, sales director at Trinity Mirror, and Dave King, executive director at Telegraph Media Group, alongside representatives from the remaining publishers.
All members of the group will discuss the issues of selling audiences at scale from a group well of inventory. To decide how the inventory across the newsbrands will be traded, the audience data from every brand will be pulled together and analysed to establish the value of the inventory for each audience segment. Each audience will have a set valuation and a price, regardless of where that audience comes from.
It is thought the group will opt to trade on a cost-per-thousand basis, but this will mean losing the benefit of having an established brand, and the breaking down of power ratios. It would also mean media owners who didn’t have a premium before entering the agreement, would have one now.
One media executive expressed concerns about the project falling through should the biggest publisher in the group - News UK - leave, making the pitch to media agencies harder. The source went on to speculate that News UK and Daily Mail publisher DMG Media might be likely to strike a joint venture separately should one of them pull out.
A second source believed that such an alliance between News UK and DMG Media would never come to fruition because the two companies “manage themselves so differently it would be the hardest combination”.
The source added: "They have to put prejudices aside. One won't drop out because they can't afford to drop out, they would be sat on their own. They have buggered it up for the last 10 years and so they have to get their act together, consolidate data, sales platforms, research and get better stronger marketing. They need robust surveys that validate the value of national newspapers, not necessarily on their own.
“£500m has come out of print ad sales, while £5.5bn has gone into the market. We know Google and Facebook are skyrocketing everywhere, but everyone else in the market has grown but them [newspapers]. They have got a fundamental issue they need to resolve.”
In December the big five agency groups - Group M, Havas, Publicis, Dentsu and Omnicom - as well a select number of independent agencies, will be updated on the progress, future strategy and asked if they support the project. If they vote against the project, it won't happen, one source suggested, but assured that it would be a “big surprise” if this happened.
A separate media agency executive was not so confident: “Just because you put everything under one roof it doesn't mean clients are going to spend more money.”
The date for launch has been set as Autumn 2017, with the project opening up for trading in January 2018, to coincide with the launch of PAMCo’s Audience Measurement for Publishers (AMP) survey, the new audience measurement service to supersede NRS.
Regional papers will not be part of the package, but may be introduced later down the line, the source suggested. Other publishers in the UK including Johnston Press, City AM and ESI Media are not involved in the alliance “since they don’t have the upfront money to put forward”, the source added.
Trinity Mirror refused to comment on the state of Project Juno. The Guardian, Telegraph and Daily Mail did not respond to comment requests in time of publishing.