Launch of Post good news for advertisers

Janet Callaghan is vice-president, corporate media director with Toronto-based MBS/The Media Company. Let's consider, for a moment, what would have happened if the National Post had never launched. - The Globe and Mail would still be mulling over the daring...

Janet Callaghan is vice-president, corporate media director with Toronto-based MBS/The Media Company.

Let’s consider, for a moment, what would have happened if the National Post had never launched.

- The Globe and Mail would still be mulling over the daring move from black and white to colour.

- The Financial Post would have recorded its best year ever in 1999.

- The Toronto Star would never have discovered just how responsive advertisers are to good service.

- NADbank would have presented its 1999 survey results, without fanfare, to the same few desultory souls who always attend research presentations.

- There would be fewer Brits in management positions at Canadian newspapers.

- The Toronto Sun would still have been bedeviled by The Sunshine Girl scandal, but would be blissfully untouched by the competitive maelstrom.

Of course, we can’t reprint the past. Conrad the acquisitor became Conrad the creator, and on one October day in 1998, Canada’s newest daily paper made its debut. With its angular columnists, its pages engorged with information and its dedication to depicting life as art, the Post has given this country’s staid newspaper industry a stiff uppercut to its glass jaw.

Don’t weep too much for those other papers, though. Despite the increased competition, newspapers enjoyed a banner advertising year in 1999, and will probably experience more of the same in 2000 – thanks, in large part, to all the players in the rollicking technology, e-commerce and telecommunications market who rely on newspaper advertising to out-shout their competitors.

From an advertiser’s point of view, unquestionably, the launch of the National Post has been good news. It has given them a romp through newspapers’ heretofore-restrictive trade practices, and delivered some of the best value in years. The Post’s presence has sparked changes throughout the industry: product improvements, better rates, bonus ads, added value, new loyalty programs and the opportunity for premium positioning at no cost. Media buyers have enjoyed the luxury of lying flat on their backs and having their bellies tickled by a vastly more attentive newspaper salesforce.

Some credit, of course, must be given to this perspicacious buyer, who championed the new national daily with clients – taking a chance on a newspaper that lacked an industry-sanctioned audit and employed a non-syndicated readership survey – and invested $80 million in the Post during its first year. We were all duly rewarded, and now look forward to round two.

While the general outlook for the newspaper advertising market is bullish, all the papers most affected by the Post’s arrival are taking a pounding on profits – and obviously, the National Post is still in the red. This situation doesn’t make shareholders or owners very happy, and will affect significantly what we see happen in year two of the newspaper wars. Expect the intense struggle to continue, but with less frantic front-line battle and more focus on the strategic deployment of resources.

This will mean:

- More picking on that fat cat, The Toronto Star – a paper that, with its staggeringly high readership, is perceived as having more to lose than to gain.

The Globe and Mail has already raided the Star’s territory, posturing as a Toronto paper by running some excellent features on local social issues. Since the National Post and the Globe have divided the national spending spoils, they need to shore up their readership and revenue base by appealing to the local automotive and retail advertisers that are currently with the Star and the Sun.

- Continued expansion by the dailies into more diversified activities, with a view to building greater value for readers and advertisers through online activities and the creation of additional products. For The Globe and Mail, vertical integration is a reality: This brand is well entrenched in electronic commerce, magazines and television, which puts it in a different competitive category from the Post in the eyes of advertisers aiming multi-media campaigns at a business target.

What’s more, the brilliant decision by the Globe and Torstar to launch Workopolis.com as a joint venture gives these two a stranglehold on the lucrative careers and job-wanted market, and leaves the National Post in the dust looking for a partner of its own in this sector.

Years of groundwork have gone into all of these activities, which are poised to pay off in the near future. The Post, however, is less fortunate in this regard, and must now labour expensively at the entry phase of vertical integration of its magazine and online endeavours.

The reincarnation of Saturday Night as the Post’s weekend magazine represents equal parts divine providence and risky venture. The move to weekly status nicely acknowledges the publication’s heritage, while allowing the Post to pick off advertisers from Toronto Life and the weekly newsmagazines – not to mention helping to stem the red ink that has been leaking from both Saturday Night and the Post’s own weekend edition.

It does, of course, also raise at least one compelling question – to paraphrase a colleague, ‘If the magazine couldn’t attract enough advertisers as a monthly, how did they get the idea that going weekly would solve the problem?’ Still, if the job is handled correctly, the Post could make some significant progress toward the integration of its various products. (We also hear that the Globe is flirting with the idea of launching another magazine, or even a Sunday edition of their paper. Where the advertising is expected to come from remains a mystery.)

- More buyer scrutiny of the NADbank readership study. Broad in scope but narrow in definition, NADbank is generally published just once a year – and that’s a concern for media buyers and clients, who have acute questions about their investment in newspaper. This survey, which represents a $2-billion-plus national and local advertising medium, needs to answer more questions and provide more robust knowledge about newspaper readership.

Another result of the newspaper war has been to underline our rather limited understanding of readership stimulus and response. The National Post has intimated that advertising in its pages stands a greater chance of being seen, read and acted upon, given the paper’s decision to maintain an advertising-to-editorial ratio that is lower than standard (20-25% at the start of the Post’s second year, versus The Toronto Star at 50% and The Globe and Mail at roughly 45%).

Have ads in the Star and the Globe suffocated under the clutter? Judging from the response rate to our clients’ advertising, no. Are readers storming the ramparts of National Post advertisers in unprecedented numbers? Unfortunately not. One might conclude from this that readers consider advertising to be an integral part of the news in newspapers – but without more and better research, it’s impossible to make a definitive statement.

What lies ahead, in the long-term, is an even more fiercely competitive newspaper market, especially in Toronto. There will be more pressure on profit, increased buyer demand for more information and, all in all, a very advertiser-friendly environment.

Also in this report:

- Stop the presses: Dailies are changing: No longer acting as simple order-takers p.NP4

- Picture perfect: It’s obvious that visually driven creative works well in newspaper. So why don’t more advertisers use it? p.NP5

- Telcos reward readers with a laugh: MTT and Bell Mobility employ unusual formats to nab attention p.NP6

- Savingumoney.com builds awareness offline: Coupon portal uses newspapers as linchpin of media strategy p.NP7

- Cadillac takes the long view: Used frequency of newspaper creatively by telling a different story every week p.NP10

- Edmonton Journal: Time for a change: Daily goes for a facelift p.NP10

- Whistler taps fast turnaround times: Newspaper lets ski resort react quickly to changing circumstances p.NP13

- Talvest co-brands funds with FP Index: Helped Montreal financial services provider to crack Ontario market p.NP14

Meat and plant-based sales are both strong at Maple Leaf

Both priority areas performed well in the company's full-year results, helped by a boost in marketing for new products.
Maples Leaf All Natural 4

Maple Leaf Foods reported higher Q4 and full-year 2020 sales, driven by its sustainable meats and plant-based proteins. 

The CPG co. reported quarterly sales of $1.13 billion, up from $1.02 billion for Q4 2019, as well as net earnings of $25.4 million, compared to $17.5 million for the same period the year prior (an increase of 45.2%).

For full fiscal 2020, the company reported a total increase of 9.2% in sales, driven by what it says is “strong growth in both the meat and plant protein groups.”

“We have repositioned our portfolio towards two high-growth categories now representing 20% of our annual sales generating a compounded growth rate in excess of 25% over the last three years,” says Michael McCain, the company’s president and CEO.

Meat protein group sales  comprised of prepared meats, ready-to-cook and ready-to-serve meals, snack kits, value-added fresh pork and poultry products that are sold to retail, foodservice and industrial channels, and agricultural operations  grew 11.3% for the quarter. 

Meanwhile, sales of plant protein products  refrigerated plant protein brands such as Lightlife and Field Roast, premium grain-based protein, and vegan cheese products sold to retail, foodservice and industrial channels  was up 5.5% over the same period. 

Sales growth for its meat portfolio was driven by “a favourable mix-shift towards sustainable meats and branded products,” but also growth in exports to Asian markets, and pricing actions implemented to mitigate inflation and other structural cost increases, according to the company. Strong demand in the retail channel was offset by lower volume in foodservice as a result of COVID-19.

For its plant-based offerings, sales for 2020 were $210.8 million compared to $176.4 million last year, representing a growth of 19.5%, or 18.1% after excluding the impacts of foreign exchange. The segment was driven by expanded distribution of new products, continued volume increases in its existing portfolio, and pricing actions implemented to mitigate inflation and other structural cost increases.

SG&A expenses totalled $144 million for the plant group alone in 2020, with investments focused on advertising, promotion and marketing to build awareness, as well as supporting brand renovation and new product innovation. SG&A for meat proteins were $346.6 million for the full year, and the company says it expects SG&A levels and marketing investment in 2021 to be largely in line with where they were in 2020.

The company, which in 2019 announced it had gone carbon neutral, says it’s amplifying this commitment while “focusing on eliminating waste in any resources it consumes, including food, energy, water, packaging, and time.”