To Fight Two New Free Newspapers London’s Evening Standard Raised Its Price 25%. How Many Print Marketing Gurus Out There Believe That Strategy Was Right? Hint: The Combined Free Newspaper Circulation Is Already 8% Up Over Business Plans

Not to mince words, those two free newspapers are adding circulation above business plans while the Standard’s circulation is nose-diving. Its monthly percentage loss chart is going from bad to worse and there is no sign of stabilization.

In the just-released November ABC audit, the Standard’s circulation was down to 272,448 a 3.36% loss from the month before. In October the circulation was 281,015, down 2.54% on September. Back in June, before all the free paper competition, it was 309,908, but it seems the longer those free newspapers have had to get their editorial and circulation acts together, the worse the Standard’s fate.

Those November figures are a full 21.37% below the 346,489 circulation of November, 2005, but even those audited numbers don’t tell the full horrific story. Strip out the bulk sales and the 225,000 full price copy sales of October fell to about 219,000 in November. Hard to believe that some six years ago the Standard’s circulation was 450,000.

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To try and stem circulation losses the Standard resorted earlier this year to publishing its own free Standard Lite, an 80,000 distribution 48-page giveaway given out between 1130 – 1430 that was supposed to inspire readers to buy the full 80-page Standard later in the day on the way home. But while the free newspaper was gobbled up it did little to help sales of the paid-for.

The Standard’s big problem is that its core London 100,000 circulation is up for grabs. It’s other 200,000 is relatively safe in the suburbs. In central London today it’s difficult to walk past a subway or rail station or busy street corner without someone thrusting a free newspaper in your hands, but those households in the suburbs that don’t bring the free newspaper home or otherwise don’t have access may well be paying the Standard’s extra 10p a copy.

But in the city center the free newspapers’ philosophy of “Is it good enough?” seems to be winning over the Standard’s “Quality, you get what you pay for”.

The two new free newspapers are thriving, and between them they are circulating some 810,000 copies, according to the November ABC, with obviously most of those readers new to a PM newspaper. It’s a contest between very deep pockets – thelondonpaper published by News International and London Lite published by Associated Newspapers – the same Associated Newspapers that prints the Evening Standard.

Thelondonpaper recently won the license, with a £1 million ($1.95 million) bid, to exclusively give away its newspapers in bins at London’s railway stations, and that propelled its audited numbers to 425,508, a 12.71% increase over October. London Lite stands at 395,048, a 6.03% increase over October with both newspapers waiting to see who wins the exclusive license to use bins at the Underground (subway) stations. London Lite really needs to win that contract to use those same bins now used by its sister free Metro newspaper in the morning. The announcement is expected by year-end.

Thelondonpaper now distributes from 536 sites around London and the paper’s ad pages have grown to 20%. London Lite is given out at 505 sites and it has 16% ad content. And the main railway stations contract has already proven that by using bins in exclusive areas trodden by commuters that circulation goes up, so once the subway contract is given out look for further distribution increases.

Paying for those distribution contracts, hiring some 1,000 vendors, plus the cost of producing newspapers with ad content still at those levels is costing an absolute fortune. But News International and Associated each have deep pockets and among the best newspaper brains around, and neither one has blinked yet.

The Standard has not said, incidentally, what has been happening to its advertising revenue – are those ad pages in the free newspapers new money flowing in or a transfer of spend, or some combination?

Eyes are also focusing on the pricing strategy at News International’s The Sunday Times, the UK’s leading quality Sunday circulation newspaper. It saw that its increase from £1.60 to £1.80 went so well last February that it hit its loyal readership with another 20 pence increase in September, reaching a new price high for British newspapers -- £2 an issue. It has now learned there are price limits to its readership loyalty.

Before the September price increase its circulation stood at 1.35 million, but in the November audit it was down to 1,288,584 which although a very slight increase over October is still down 7.63% over November, a year ago. Before this all occurred The Sunday Times’ circulation had not been below 1.3 million for seven years.

And even promotional DVD giveaways ranging from Jimi Hendrix to Johnny Cash to the Ryder Cup, still failed to stop the decline – the marketing question here, of course, is what would have happened if there were not those promotions?

Most of the UK nationals have raised their prices this year, if not for the Monday-Friday issues then for the increasingly thicker Saturday and Sunday newspapers. The November audit shows that over the past year the dailies are down 3.7% and the Sunday newspapers are down 6.2%, but in reality the true figures are worse.

Whereas in the US there is a trend to get rid of the bulk copies because of their doubtful use to advertisers, in the UK the trend is to increase them – anything to keep numbers up. The audit showed that 1 in 10 supposedly paid-for newspapers distributed were either given away or cut-price.

With the Standard down to 219,000 fully paid copies, and its London Lite free stable mate up to some 395,000, and both seriously hemorrhaging, the obvious question out there is how long does Associated Newspapers plan to let all of this continue? It is not about to hand over the PM market to arch-rival News Corp, but even with its very deep pockets and its strong cost cutting program throughout the company the ever-increasing red ink for its London PM market is plainly there for shareholders to see.

Something will need to be done with the Standard’s marketing strategy, and soon.

Fighting Two New Free Newspapers London’s Evening Standard Raised Its Price 25%. How Many Print Marketing Gurus Out There Believe That Strategy Was Right? Hint: The Combined Free Newspaper Circulation Is Already 8% Up Over Business Plans