Newsquest chief executive Henry Faure Walker has predicted a “brighter future” for local news despite declining classified advertising revenue.
In an interview with the Media Masters podcast, Faure Walker, who became chief executive in 2014, said local newspapers are “often misunderstood”.
He said: “Yes they are challenged, yes the business model has been massively disrupted by digital, but there’s also a much brighter future out there that I think only people who are perhaps in my privileged position are able to see.”
Newsquest is the second largest publisher of local news in the UK with more than 200 titles and almost 30m unique users a month online, according to the company’s figures.
Faure Walker acknowledged the “well publicised” woes faced by the local newspaper industry and other print titles.
“A large part of that has been driven by the dramatic declines in classified advertising – which Rupert Murdoch used to call the rivers of gold – that to a large degree supported the financial model of local newspapers,” he said.
But he added that “display advertising, certainly at a local level, is still pretty strong” and that online advertising now makes up 30 per cent of Newsquest’s advertising revenue.
Faure Walker claimed that local news media is still an attractive proposition for advertisers even compared to the social media giants that currently dominate the market.
Total advertising spend in the UK grew by 4.6 per cent to a record £22.2bn last year, but the journalism industry is getting a diminishing slice of the pie. Google is taking by far the biggest amount, followed by Facebook.
But Faure Walker said: “In York we reach almost 75 per cent of the adults every month via our website alone – that’s before you even add in the additional audience we reach through print.
“So if you’re a local retailer in York, wanting to reach people and promote offers and services, then the York Press is a pretty obvious place for you to advertise.”
He added: “What people don’t know is that Facebook’s reach is significantly less than local newsbrands in the UK.
“Facebook’s much vaunted audience is about 50 per cent penetration so they say that they reach about 50 per cent of the adults in the UK.
“If you compare that to my example of the York Press you can see that we significantly out-club even the likes of Facebook when it comes to reaching local audiences.”
Looking to the future Faure Walker said: “We see an important part of our future as becoming a trusted adviser to local businesses as to how they should do their digital marketing.
“It’s become a pretty complex landscape out there for local businesses, so one of the key elements to Newsquest’s strategy is introducing digital marketing services to those local businesses.”
He added: “We’ve come a long way from being a traditional local newspaper to what will increasingly be a digital marketing company.”
He was also critical of Facebook and the “uneven advertising ecosystem”.
“Facebook is building its own audience off the back of news journalism,” he said.
“They’re arguably free riding the huge investment that we put into local journalism and we’re getting pennies trickle down in return.”
Discussing some of the more difficult changes he has had to bring to the company, which have included editorial restructurings and redundancies, Faure Walker said: “Clearly there’s a huge amount of personal and human pain involved.
“The unions get involved and often they have a good point to make but sometimes they can be militant and they’re not always seeing the bigger picture which is how do we have a sustainable model?”
He continued: “My job for the local communities is to make sure we sustain the local news brands and sometimes painful decisions have had to be made in order to do that.”