Will coronavirus be the death of the media?
Audience figures are through the roof while revenue from advertising is at rock bottom. This is the great paradox facing the media, already weakened by its precarious business model, during this devastating epidemic. With advertisers jumping ship, employees facing partial unemployment, news kiosks closing, a highly reduced postal service and the media distribution company Presstalis in dire straits, the press media sector is bracing itself for a difficult balancing act.
Indicators flashing greenThe figures are dizzying. According to the estimations of the ACPM - France's press and media circulation office – on March 15-16, 2020, news media outlets registered more than 335 million visits to their websites, triple the amount of traffic normally expected in such a time period. This trend is continuing, due to the confinement measures in place. "Our digital audiences are skyrocketing at present," François-Xavier Lefranc, editor-in-chief at Ouest France, told Story Jungle. "We should reach 250 million visits next month." Despite the reduced activity of the French postal service making newspaper home deliveries more complicated, press media companies have been able to count on some news kiosks, which have been identified as essential by the government, remaining open. "It's a strong measure," François-Xavier continues. "Sales at these newsstands are higher than normal."
The situation is similar for other large media sectors, for which, according to Marie Van de Voorde, editor at Les Echos, audience figures and subscriptions are soaring. "Just like our fellow media outlets, we are currently seeing a big surge in digital activity," she told Story Jungle. "Subscriber recruitment tripled during March. Subscriptions have now taken over from physical sales. Globally, subscriber and prospective subscriber commitment to our content is very high. Currently, one out of every two subscribers log on to les echos.fr every day, attracted to certain formats in particular." Formats such as Les Echos news podcast La Story, which saw a 60% increase in listeners last month. It's the same story with Salut l'info, Franceinfo's weekly podcast aimed at 7- to 11-year olds. This program, created in partnership with Astrapi, and which has now become a daily podcast, has seen an incredible 237% increase in listeners according to Lucas Menget, head of editing at france.info. As far as Telerama is concerned, this weekly magazine's app recently broke a record: five million visits in March alone. For Le Monde newspaper, digital subscriptions have been increasing threefold every week (compared to the weekly average for 2020).
From scorn on the media to trust in the mediaOn a more international scale, according to the tech website Piano, cited by Digiday, subscription numbers for American and European newspapers were higher last week compared to the same period the previous year, rising by 63% and 267% respectively. Astonishingly, editors who decided to place their articles covering the health crisis on the "free" side of the paywall also saw an increase in subscribers. Indeed, still according to Digiday, The Atlantic and Bloomberg - which both made access to their articles on coronavirus free – saw their "best week of subscription increases".
"What has struck me since the start of the confinement period is the fact that, in the space of only three weeks, we have seen a shift from a scornful attitude towards the media to a trusting attitude towards it," says François-Xavier Lefranc of Ouest France. "This must surely inspire our confidence in the future because it shows that we are still relevant and that the media has an essential role to play within a democracy." "The shift has been spectacular," he continues. "Very often readers express their total support for us. People are confined to their homes and they are worried. They need news and they realise that the media is important."
Many subscribers but few advertisersWhile audiences and subscribers are renewing their trust in the media, this shouldn't hide the other side of the coin. A major slowdown in advertising and a slump in broadcasting are having a big impact on media groups' turnover, with many preparing themselves for difficult days ahead. Faced with a climate of anxiety, advertisers are fleeing for the hills.
«We are also in a new world which will put all industries to the test»
It's a fact: advertising, the financial lifeblood of media outlets, is in free fall. Faced with a 70% drop in advertising revenue, the newspaper Midi Libre has had to temporarily lay off 200 employees and dismiss all of its workers on short-term contracts. At Ouest France, the impact of the crisis has been equally brutal. "Advertising accounts for just over 25% of our revenue" François-Xavier Lefranc tells us. "Almost overnight, 60% of that revenue vanished. We have had to put in place short-time work measures which have affected all areas of edition." At Le Monde, a short-time work initiative affecting 10% of employees outside of the editing team has been implemented, and this despite the "significantly high" number of subscribers to the newspaper's digital platform since the beginning of the health crisis. Top-level management at Le Monde has spoken of "a brutal slowdown in economic activity" with "financial repercussions for the group that will no doubt be harsh." In an internal communication seen by the media outlet La Correspondance de la presse, top-level executives bemoan the fact that "advertisers have, for the most part, halted their investment activities."
Elsewhere in the world, Jonah Peretti, cofounder and general director of BuzzFeed, announced in a message to his employees that most of them would suffer salary cuts of between 5% and 25%. Peretti also declared that he would be giving up his own salary for the duration of the crisis. "We're in a better position than many others," he stated, "but we are also in a new world that will put all industries to the test."
«Our business models can't be based almost exclusively on advertising»
Podcast studios have not been spared from the collapse in advertising revenue. "Almost all of the sponsorship campaigns for our shows have been stopped," explained Katia Sanoert to Le Figaro newspaper. Sanoert, who is director general of Louie Media, continued by saying "We are working with advertisers on a case by case basis, to explain to them that audio options remain valuable tools for keeping in contact with their clients and preparing for the future." Julien Neuville, cofounder of Nouvelles Ecoutes, tells Le Figaro a similar story. "We are affected financially and it will take time for us to reach our pre-crisis level of turnover. This is proof that podcast studios need to diversify. Our business models can't be based almost exclusively on advertising."
Advertisers are playing it safeWhat is going through the heads of advertisers? With audience figures higher than ever, advertisers are keeping at bay, preferring to play it safe. Their strategy? To test the water and measure the scale of the crisis retrospectively. "There is a desire on the part of advertisers to not communicate during a current period of uncertainty and general anxiety," according to Romain Job, Chief Strategy Officer for Smart – a company specialising in advertising technology for editors in an interview with Mind Media. "This change in advertising methods also explains why several ad campaigns have been shelved, and fears of an economic crisis are pushing advertisers towards cost-reduction policies."
«Being associated with potentially shocking news stories does not, in itself, necessarily have a negative impact on the effectiveness of the ad»With "brand safety" in mind, many brands do not want to associate themselves with the epidemic. Advertisers have therefore added the term "coronavirus" to their list of banned key words. Adverts can therefore not appear next to an article containing this term. As a result, Digiday forecasts that "whole news website homepages could inadvertently find themselves "blocked". "Ad blacklisting" key words concerning the Covid-19 crisis also led to 2 million adverts being blocked by The New York Times, CNN, USA Today and The Washington Post.
Speaking to RTBF (Francophone Belgium Radio and Television), Bernard Cools, head of studies at SPACE, Belgium's leading media agency, sees this as an "overreaction on the part of some advertisers". "Within a context in which everyone is expecting to receive news anyway, an advertising message, if it is empathetic, is probably not a bad thing. Being associated with potentially shocking news stories does not, in itself, necessarily have a negative impact on the effectiveness of the ad."
Is all communication "down"?This paralysis, however, does not affect everyone. For Marie Van de Voorde, editor at Les Echos, "Activity is not completely dead in terms of acquiring advertising campaigns. Yes, some advertisers have cancelled or postponed their campaigns, but some stakeholders, in the tech and the large-scale retail sector, for example, have jumped at the opportunity to reach a quality audience and to have their ads appear next to content that is trustworthy and that offers people deeper analysis of the current crisis."
That said, according to Les Echos, over two-thirds of communication agencies are preparing themselves for short-time work measures. "It's the biggest crisis that the sector has seen since the Second World War," according to Laurent Habib, president of the Association of Communication Consultancy Agencies (the AACC) and founder of the agency Babel. This is proof that the voice of advertisers has been all but silenced.
However, as indicated in a survey led by Kantar of 25,000 consumers in 30 countries that was carried out at the beginning of March, consumers are not unfavourable towards the idea of brands advertising during this Covid-19 crisis period. 75% of those surveyed believe that brands should inform the public about their efforts to overcome the current situation. "Advertisers who take advantage of crisis periods, notably due to large audiences but also due to the lack of competitors, generally tend to do very well," according to Bernard Cools, head of studies at SPACE. "This is the case not only during the crisis, where a slight but real rise in profits can be observed, but above all after the storm has passed."
For François-Xavier Lefranc, editor-in-chief at Ouest France, the coronavirus crisis has confirmed and intensified a trend that has been visible over the past 10 years. "If we put the current crisis to one side, we see that advertising revenue has been on a continuous downward spiral, with the digital heavyweights – Facebook, Google and Amazon – reaping the benefits. The key to future success lies in converting those who visit sites into digital subscribers. It's long, hard work and it will be the battleground for the months and years to come."