It might seem incongruous for the publisher of the hard-pressed Daily Mirror to lay claim to having the largest audience in the United Kingdom, both in print and online, but the numbers are clear.
Never mind Rupert Murdoch’s News UK stable or DMG, the publisher of the Daily Mail family, it is the newly-expanded and rebranded Reach plc which now commands the most readers – 45.4 million a month – across its portfolio of 212 brands (nine national newspapers,140 regional ones, three magazines and 60 websites), including The Mirror, People, Express and Star national titles.
“Quite obviously what we have now is the greatest reach… that’s a fact, both in print and in digital,” says Simon Fox, Reach’s chief executive. “Scale really matters, so if you want scale we can provide scale.”
Reach needs to get on the front foot after the bruising experience of announcing its half-yearly results last month, when it declared a dizzying £113.5m loss after writing down the value of its regional publishing operations by £150m.
The ensuing negative headlines were not what Fox needed only weeks after he pulled off the first merger in the UK newspaper sector in nearly 40 years when the government gave clearance to the £127m deal to combine the Trinity Mirror and Express (Northern & Shell) titles into Reach.
But he is in ebullient mood, despite the huge loss. “It is in no way a reflection of the underlying (picture)…we are a very profitable and cash generative business and we had a strong first half and operating profit level,” he says. “Obviously it was marred by this write-off but it is accounting.”
Growing Reach through its 'Live' brand
Reach is in growth mode, he says. It has plans for aggressive expansion which would see it planting its flag in British cities where it has never previously had a regional presence.
This surge began fairly discreetly two years ago with the launch of digital-only service Belfast Live (in a city where Trinity Mirror had no print presence). The publisher then set up Dublin Live and Glasgow Live and has this year entered Leeds. Next week it is arriving in Edinburgh. These latter cities are traditional strongholds of Johnston Press, publishers of the Yorkshire Post and The Scotsman (and the i paper, for which I also write a media column).
“We think that’s pretty exciting,” says Fox. “All of those cities are cities where we don’t have print titles and you can expect to see us opening in other cities in the coming months.”
The plan is to give Reach blanket coverage of the country both at a national and a (more culturally intimate) local level. It defies traditions in the regional media which have allowed publishers in some cities to enjoy longstanding monopolies. “Partly it’s for completeness, to fill out the cities where we are not present,” says Fox. “But it’s also simply that we see a real opportunity to build a large profitable business in cities where we haven’t had print.”
After years of firefighting as a legacy publisher vulnerable to technology changes, Reach is now seeking to adopt the position of disruptor. “By proving that we can build a profitable, sustainable business in Leeds, where we have never had a title, that obviously gives us confidence that we can do the same thing in cities where we don’t have print currently.”
The “Live” model then becomes “the model for how our whole regional business will be in some years”, a national digital brand, alongside the Mirror, the Express and the Star.
This strategy of taking the “Live” digital brand nationwide could also eventually lead to the loss of historic British media titles, from the Birmingham Mail (which sells 16,626 - down 13 per cent year-on-year in a city of 1m people) to the Bristol Post (circulation: 18,967). Both exist now only in paper format.
“We have now rebranded all of our websites, except two, to the ‘City + Live’,” Fox says. “We haven’t changed the Liverpool Echo and Manchester Evening News but in every other city we have moved away from the newspaper brand to the Live brand; so Bristol is no longer Bristol Post .co .uk, it is Bristol Live. In Birmingham, it’s not the Birmingham Mail, it’s Birmingham Live.”
This strategy is a signal that the digital and print entities are products with “different content, different readers and different advertisers”. It is also a response to reader feedback on contemporary relevance. “The Birmingham Live brand - we did significant market research - has connotations of modernity and youth and so forth that the newspaper brand doesn’t necessarily have so we decided we would separate the digital and print brand names and that’s been successfully done.”
In Liverpool, Manchester, South Wales, Bristol and Hull, the Reach sites are consistently used by between 50-60 per cent of the local population each month the publisher says. In Plymouth, Birmingham, Newcastle and Nottinghamshire it reaches 40-50 per cent of those communities.
Fox claims that no other publisher can offer advertisers the same breadth of national and regional advertising. “The regional footprint is evidently unique, nobody else has that. We can not only up weight (give targeted focus) in cities where advertisers want to up weight but (offer) emotional connection between the brand and the city.”
A new team, and proposition, for advertisers
On a national level, Reach can now deliver audiences across a political spectrum that stretches from the left-leaning Mirror to the right-wing and Brexit-backing Express. The deal has been received with cynicism in some quarters – The Guardian’s Roy Greenslade described it as a “shotgun marriage” between two ideologically-opposed fading news brands.
Fox says that the cost savings of the merger are one of “two strong reasons” for the deal. “We can be far more efficient together by sharing content and by pooling advertising teams and having the very best of both,” he says. “That is absolutely one of the reasons for doing it – we have called out £20m of synergies and that’s not insignificant.”
The other attraction is the bringing together of two publishing stables with “very little readership overlap”, he says. Ofcom and the competitions authorities were happy to accept that there was no advantage to Reach in changing the political outlooks of any of the titles. “The Daily Mirror has a long and proud history of supporting the Labour party and the Daily Express has a similar history of supporting the Conservative party and they are on different sides of the Brexit debate as well. The fastest way we can lose readers would be by turning either paper towards the other, that would be a nonsense,” says the CEO.
He says that there are no plans to close any of Reach’s three national red-top titles, while they are in the black. “For as long as all of our titles are profitable they will continue to operate.”
In November, as part of the new “synergies”, a new and combined commercial team will take this 45 million audience to advertising clients. “You put the Daily Express and the Mirror and our regional titles into the mix, you put in digital and you have got an unrivalled audience breadth,” says Fox. ‘We will be putting this audience proposition together in a way that I think brands and advertisers will find really appealing.”
It’s Fox’s sixth anniversary at the publishing giant this month. The former founder of Office World arrived from HMV, where his brief was to reposition the ailing retail chain to serve the modern music and entertainment consumer. In his turbulent time in the press, he has tried to adapt the business to serve an audience that increasingly wants to read its content on their phones.
But it’s a rare upturn in print advertising revenues in the national press that has lately given him cause for optimism. Print display advertising in national papers rose by 1% in the first quarter of the year, the first sign of an incline on the graph since 2010, according to research for the Advertising Association and Warc.
The growth is “really encouraging and positive”, Fox says, positing that some advertisers are reconsidering their previous abandonment of print. “I do believe the pendulum has swung back somewhat in the first six months of this year,” he says, while admitting that the upswing was “partly seasonal, in that the World Cup was clearly helpful”.
Unilever marketing chief and new Advertising Association president Keith Weed has led the way in calling for improvements to the online advertising environment, identifying a lack of public trust in social media and the need to tackle online influencer fraud. Fox says it is “really pleasing” that “some of the bigger supermarkets and bigger advertisers” have returned to print.
He is promising that Reach’s new commercial team, when it starts operating in November, will combine creative solutions with access to an unprecedented breadth of audience. “What I hope is that they think: ‘Wow, this is really exciting, this is what we were hoping for,’” he says. “We want to be the most creative, most easy place to do business with, and with an audience that could suit literally any brand.”
Ian Burrell's column, The News Business, is published on The Drum each Thursday. Follow Ian on Twitter @iburrell