Last week the fifth “dummy edition” of ThisDay, South Africa’s long-awaited upmarket daily newspaper, landed on the desks of media-industry insiders. While many agree that the editorial range, story treatment and design elements have been flawlessly integrated to create a world-class broadsheet, there are serious misgivings about the business model.
According to executives at three top-level media agencies — together responsible for allocating about a quarter of the country’s annual advertising spend — ThisDay‘s positioning as a national daily for an educated and aspirant readership could be its undoing. The view is that the strategy precludes the Nigerian-owned title from attracting the critical mass of readers demanded by retail advertisers.
Speculating on ThisDay‘s circulation potential, The MediaShop’s Gauteng director John Barham says: “I don’t think 30 000 to 50 000 will be enough for the major retailers like Pick ‘n Pay and Shoprite-Checkers.”
Significantly, AC Nielsen’s AdEx figures for the first six months of 2003 show that retail is once again South Africa’s biggest adspend category, at R1,4-billion. Pick ‘n Pay and Shoprite rank third and fourth on the list of individual spenders across all categories for the January to June period (at R100-million and R97-million respectively), with global retail giant Unilever in first place (R160-million).
Barham points out that besides low circulation numbers, ThisDay‘s national reach is an added factor that could prevent the title from harvesting the big spend. “Most retailers work on a regional basis, and don’t set one national price for their goods,” he says.
Adamant that retailers won’t move away from South Africa’s regional dailies, where they have their largest penetration, and stressing that no business has a limitless marketing budget, Barham questions where the extra money for ThisDay is going to come from.
“ThisDay might appeal to some retailers at the top end, such as Woolworths or Wetherlys, but these brands don’t spend enough on media to justify [the newspaper’s] business model.”
Barham qualifies his assessment with a revealing comment: “Stylistically and editorially, ThisDay is not compatible with retail advertising. I think retail would detract from the quality of the newspaper.”
Starcom MD Gordon Patterson and Mindshare CEO Mike Nussey — both companies rank with The MediaShop in South Africa’s top five media placement agencies in adspend control terms — likewise compliment ThisDay’s editorial.
“Competition should always be welcomed in our industry. It results in better buys for our clients,” says Patterson. “ThisDay will almost certainly shake up the existing players who I feel have ‘lost the plot’ in terms of editorial position and content.”
But, like Barham, Patterson and Nussey are worried about ThisDay‘s ability to attract a critical mass of readers. Both say the pre-launch positioning of ThisDay, “somewhere between Business Day and The Star”, is very vague, and as yet hasn’t done much to raise advertisers’ comfort levels.
The delays surrounding the launch have not helped much either. ThisDay has had key staff on its payroll since last year and was first expected to hit the streets in January. “It’s been like waiting for Godot,” says Nussey.
The launch-date setbacks are mainly caused by cash-flow and funding problems linked to ThisDay‘s acquisition of CNA’s loss-making rural stores. In June the newspaper’s CEO, Graeme King, visited Nigeria to raise an extra R125-million.
Nussey is positive that the cellular network operators and the banks will jump in. “ThisDay may get some motoring sector spend, but they won’t get FMCG [general retail advertising],” he adds. As for the advertisers that aren’t on the hunt for immediate sales, Nussey says: “For a long while marketers haven’t used newspapers to brand-build. Television is much better for that.”
ThisDay staff are, of course, out to buck this last trend. According to editor Justice Malala, in the past two weeks advertising space has indeed been booked by “brand-builders”.
From his editorial perch, Malala is equally dismissive of some of the remaining criticisms. “After year one we are aiming for a circulation of 100 000,” he says. “Our research shows there are enough people who want a different mix in a newspaper. We think they’ll come to us not just because they’re disillusioned, but because there’s something good.
“There has been talk that we’re aimed between The Star and Business Day,” Malala continues. “I wouldn’t say that. Our business coverage can and will be better than Business Day‘s. Our general interest coverage will be serious and articulate.”
On the issue of cover price, critical to any newspaper’s circulation figures and business model, Malala is non-committal. He is prepared to be quoted, however, on the suggestion that it’ll be set “between the Daily Sun and the Mail & Guardian“.
And launch date? While Malala says it’s definitely not September 8 — he wonders where Business Day editor Peter Bruce got that figure — the accepted wisdom is “very soon”.
Media Weekly is produced for the Mail & Guardian by The Media magazine and is edited by The Media’s editor Kevin Bloom.