Friday, May 08, 2015

Does David Cameron owe his 2015 General Election win to Rupert Murdoch and the Sun newspaper?

  • Ed Miliband told Russell Brand that Murdoch is much less powerful than he used to be
  • The Sun's daily circulation is down 34% since the 2010 election
  • National newspaper sales are down more than 3-million in the past five years
  • Newspaper readership is down even more
  • Two-thirds of voters do not read a national newspaper
  • Less than 10% of voters read the Sun
  • The Sun probably directly influences fewer than 1.2% of voters

The Sun did not win the election for David Cameron.  Well, at least, not directly.

In his interview with Russell Brand, Ed Miliband claimed that Rupert Murdoch's power has diminished and many social media commentators went on to say that the then Labour leader was set to become the first prime minister who owed nothing to the media mogul.

It was a point that Brand pushed him on, but Miliband was adamant, saying that Murdoch is 'much less powerful than he used to be.'

So, given that he stood up to Murdoch's papers, and they attacked him mercilessly, was Miliband right about Murdoch's power?

On the face of it, he's obviously right.  National newspaper circulations have plummeted by almost a third since the last general election in 2010,  The Sun, Britain's biggest selling newspaper has seen its sale fall by 34% from just over 3-million to a little under 2-million.  The Mail has lost 20% (down to 1.7-million), and the Mirror is down 24% to just 922,235.

You might think this has something to do with the hacking scandal and lack of trust people now have in newspapers, but the biggest fallers over the past five years have not been the tabloids, but the so-called quality papers.  The Guardian, for example, has lost almost 40% of its sale since the last election with the number purchased each day falling to just 185,000.  The Independent has suffered even more, losing 67% of its daily sale and now struggling to sell more than 61,000 each day.

In total, national newspapers sales are down more than 3-million a day since the 2010 election, falling from about 9.8-million per day to about 6.8-million.

Of course, sales is only part of the story.  Newspapers like to talk about readership because each paper sold tends to be read by more than one person.  Coming up with a readership figure is not an exact science, relying as it does on surveys. So, at the last election the readership figure looked as if it was about 2.5 times the circulation.   However, readership has been falling even faster than circulation - may be even twice as fast.

So what percentage of the voting public was reading which newspaper at the last election?  The following charts are based on the number of  readers for each paper who voted and the fact that there were about 30-million voters at each election.

 And what does that chart look like now?

When it comes to voting influence, we need to consider the number of newspaper readers who voted. In 2010, according to an Ipsos Mori poll, about 64% of newspaper readers voted.  That being the case, in 2010, about 53% of the voters were reading a newspaper.  In yesterday's vote, the number had fallen to 33%.  It is obvious that the direct influence of newspapers is falling rapidly and now two-thirds of people who vote are not even looking at a national paper.

But, of course, it is Rupert Murdoch who is seen as the devil incarnate by most critics of the press - and it was Murdoch who so concerned Brand. So what percentage of voters read his papers: the Sun and the Times?  And is that falling?

According to that Ipsos Mori poll, only about 57% of the Sun's readers voted at the last election, suggesting that the Sun was talking to about 4.3-million voters at the time of the 2010 election, about 14% of those who voted.  This week, that figure had dropped to  2.4-million voters, or about 8% of all voters.

But, the same poll suggests that the Sun has not been able to get more than 45% of its voting readers to vote Conservative in any of the past five elections.

Even when the Sun threw its weight behind Labour, about 30% of its readers still voted Tory, suggesting that it influenced about 15% of its voting readers.  At today's levels, that would be about 365,000 voters, which is about 1.2% of the turnout.

If those voters are evenly spread around the country, it is difficult to see how anybody could claim that the Sun had much of a direct influence on this week's result, let alone that it was the Sun wot won it.  However, it is unlikely that they are evenly spread.

We know for example, that few copies are sold in Liverpool and it may just be a coincidence, but the city was one of the areas which bucked the election trend with incumbent Labour candidates increasing their majorities.

Despite this, my own view is that Miliband is correct in his belief that Murdoch's power is much diminished and, as sales continue to fall at something like 10% a year, that direct power will go with it.  By the time of the next election, sales of the Sun would be down to not much over 1-million if the fall continued at the same rate as the past 12 months.  That would leave it influencing not much more than 90,000 voters by 2020.

Indeed, Labour's former spin-doctor-in-chief, Alistair Campbell is already pretty dismissive of newspaper influence, describing the tabloids' coverage of the election as 'beyond parody,' and saying:  'the media is certainly not trusted like it was.'  According to an article in the Guardian, Mr Campbell said:
“My complaint about newspapers has never been that they are biased, I was a very biased journalist on the Daily Mirror. My complaint has often been to the broadcasters to allow that bias to impact on them.” 
And, that, I believe, is the crux of the matter. The tabloids in themselves - and Rupert Murdoch, for that matter - don't have anything like the influence they once had, but those around them, even those who claim to despise them, give them power by constantly talking about them.  And it is not just the broadcasters and social media, politicians are just as bad.  It's probably true that there is no such thing as bad news for the newspapers when it comes to talking about their influence.

Oddly, Mr Campbell seems to recognise this phenomenon when he says that critical media coverage of Ed Milliband's interview with Russell Brand, simply drove people to watch the interview on YouTube.
“Something like that Russell Brand interview, the mainstream so-called media gave it massive hype, and the fact it was mostly negative hype didn’t matter because people who then decided to watch it made the choice to do that."
And yet he, along with many, many others, continues to prop up an ailing press by constantly discussing it and giving it a power it doesn't have in itself.  Perception is reality.

Some things to remember:
  • This is nothing more than a back-of-a-fag-packet calculation.  I don't have the time - and may be the brains - to complete a more detailed analysis.
  • I looked at 10 daily titles, but excluded the i, the Metro, anything in Scotland, and the Standard - this was because I didn't have enough data at my fingertips and, anyway, I don't consider them national.
  • I made an assumption on readership.  I multiplied the average daily sale of each newspaper by 2.5 to give me the 2010 readership, and by 2.3 to give me the 2015 figure.  This was because of this article.  I think, if anything, I have understated the fall in readership.
  • I calculated the number of voters from each newspaper by multiplying the number of readers by the percentage given in the Ipsos Mori poll.
  • I have assumed a turnout of 30-million.
  • I got the latest circulation figures from Press Gazette
  • I got the 2010 circulation figures from Wikipedia even though I constantly warn my students that this is not a reliable source!
  • I know News International, or NI, is now called News UK, but I wanted to avoid confusing those readers who don't follow the media business closely.
  • The FT's voting turn out is based on 2005 figures because the data sample for 2010 was too small.
Murdoch picture: By Eva Rinaldi from Sydney Australia (Rupert Murdoch) [CC BY-SA 2.0 (], via Wikimedia Commons

Wednesday, May 28, 2014

Appointed to the board of UK's new press regulator

I have been appointed to the board of the Independent Press Standards Organisation - the new press regulator that has been set up following the Leveson inquiry.

I am honoured, if a little daunted, to be appointed at such a crucially important time for the future of press regulation.

In a press release today, the chair of the independent panel set up to find the first board for IPSO, Sir Hayden Phillips, said: "I am confident the new Directors have the stature and experience to bring into being a tough and independent regulator that will stand the test of time."

The majority of the new 12-strong board are people independent of the newspaper industry, with the other five having knowledge of different sectors of the press.  

According to the press release: "The Board includes people from business, diplomacy, consumer rights, the pensions sector, academia, the voluntary sector and the publishing and newspaper industries. 

"Experience is drawn from across the United Kingdom."

Obviously, my main experience is within the regional press.

Sir Alan Moses, the chair of IPSO, said: “I am delighted to have the chance to work with such a talented group of independent-minded people, committed to provide rigorous and strong  regulation. 

"Now we must start our work of preparation. We plan to use the coming period to listen and engage with the public, experts and the industry before IPSO’s formal launch in September. 

"This will be a new era of self regulation of our newspapers, ready to provide the independent regulation to which the public is entitled.”

Sir Alan, an Appeal Court judge, was appointed to the post of chair of IPSO last month.  At the time, he said there was a difficult balance to be struck between protecting the public and defending a free and fearless press.

"The public and the press are entitled to a successful system of independent regulation. I recognise it is a big responsibility to achieve this. 

"I believe that such a system should be designed to protect the public against a repetition of the  breakdown in standards in some parts of the newspaper industry in recent times.  

"At the same time it should affirm and encourage the vital role of a free and fearless press. 

"I shall do my best to guide the development of  clear, simple but fair rules in an area where there are difficult questions and there are no easy answers.  

"But I am determined that there should be no hesitation in dealing with bad practice by newspapers and providing support and vindication for those who suffer as a result of any future  breakdown.  

"This new organisation will have to listen to and learn from  the Press and their critics in the period ahead.   

"To those who have voiced doubts as to the ability of IPSO to meet the demands of independent regulation, I say that I have spent over forty years pursuing the profession of barrister and judge whose hallmarks are independent action and independent judgment. I do not intend to do away with that independence now."

Those who know me, will know that I share Sir Alan's views on independence.  I have written about it before here on this blog and one of the main reasons I left my previous role as editor was because I believed my independence was being undermined.  Like Sir Alan, I have no intention of doing away with that independence now.

You can see IPSO's press release here, including short biographies of all 12 members of the board.

You can also see the response of HackedOff to the announcement here.

Friday, January 24, 2014

When live help on a website leaves you none the wiser

Live help on a website is a great idea: getting immediate answers is exactly what I want when I'm wondering about buying a new service or product.

But when it's done poorly, it is worse than useless.

Take this conversation I had with 'Andy' on the EE website today when considering switching my mobile from 'three' because I get such poor coverage where I live to EE's 'superfast' 4G service

I ask Andy if he can check EE's coverage at my postcode.  Here's what happened:

Andy: at 16:17:24
I'd be happy to help you on that
Andy: at 16:17:30
May i know your post code
keith: at 16:13:13
my postcode is DE...
Andy: at 16:18:39
you do have finer coverage of 4g but great 3 g
keith: at 16:14:34
Sorry, what does that mean?
Andy: at 16:19:39
you do have fine coverage for 4g only 3 bars and 3 g is great

Ok, that's not exactly clear, so I press on:

keith: at 16:15:37
What difference will 3 bars for 4g make?
Andy: at 16:20:35
It sis fine not great

Oh, now I understand.  Actually, I don't.

keith: at 16:16:53
I don't understand that. What is the difference between fine and great?
Andy: at 16:22:00
I will explain
Andy: at 16:22:21
you will get 4g but the network will not be storng
Andy: at 16:22:31
It may fall some time
Andy: at 16:22:48
And 3g it will be great

Right.  Go on:

keith: at 16:19:17
Will I always be able to browse on the internet?
Andy: at 16:23:55
yes you can\
keith: at 16:19:57
But it might be slow?
Andy: at 16:25:01
yes slow

Now I get technical.  I have no idea what it means, but I ask:

keith: at 16:20:58
can you tell me what speed I should expect for upload and download?
Andy: at 16:26:00
it will be 17 to 19 mpbs speed
keith: at 16:21:52
What would it be if it was great?
Andy: at 16:26:38
21 to 23 mpbs

Sounds impressive and there doesn't seem to be much difference between fine and great.  But Andy has got another idea:

Andy: at 16:30:31
you can go for 3 g plans
Andy: at 16:30:38
You have great fine
keith: at 16:27:02
what speed would 3g plans give
Andy: at 16:31:50
7.2 mpbs

I don't really know what I'm talking about, but that doesn't sound anywhere near as good! So I ask:

keith: at 16:28:02
And on my postcode I would definitely get 17 on 4g?
Andy: at 16:32:52
I cannot comment on  that

Eh?  Wait a minute - he just told me that I would get 17-19 on 4g.

keith: at 16:28:42
but that is what you said earlier?
Andy: at 16:33:32
yes but indoors it may be till 17 mpbs
keith: at 16:29:31
sorry, what does that mean? It may be till?
Andy: at 16:34:11
17 mpbs
keith: at 16:29:57
but what does may be till mean?
Andy: at 16:35:01
I will explain
Andy: at 16:35:10
As looking at your coverage
Andy: at 16:35:27
you may get till 17 mpbs speed
Andy: at 16:35:38
It may go higher and lower to

Now, I'm really confused.  And it's not just because 'Andy's' first language is obviously not English:

keith: at 16:31:24
I am sorry, I don't understand 'may be till' - it is not an English phrase
Andy: at 16:36:26
I will explain
Andy: at 16:36:36
As looking at your covarage
Andy: at 16:36:51
You may get speed till 17 mpbs speed

Oh, right.  Silly me.  Then nothing for 50 seconds until this:

Andy: at 16:37:04
May io know which plan you have selected

I press on:

keith: at 16:33:19
Earlier you said I would get 17-19 mbs
keith: at 16:33:30
Are you saying that is not true?
Andy: at 16:38:17
yes as looking at your covrage
Andy: at 16:38:33
Please click here
Andy: at 16:39:01
you can see
Andy: at 16:39:06
If you had fill bars
Andy: at 16:39:15
The speed will be 21 to 23 mpbs

And so it goes on for another 10 minutes until Andy asks me:

Andy: at 16:50:38
Did you selected any plan

The truth is that I am really unsure what he has told me.  He kept saying I would get 17-19mbs, which seems really fast, given that I can't even receive texts on 'Three's' network here.  But when I asked him if I would definitely get 17mbs he said: 'I can't comment on that!'

Wednesday, August 21, 2013

73 days and counting - the frustrations of the Freedom of Information Act

The law is quite clear: public bodies must respond within 20 working days to a request for information under the Freedom of Information Act.

Despite this, I've been waiting 73 working days for a response to a fairly straightforward request sent to the Crown Prosecution Service on May 10.

What makes me say my request was straightforward?  I asked for information that the CPS stated publicly it had been collating centrally.

I sent my request by email on Friday May 10.  

I heard nothing until July 5, 30 working days later, when I received the following note:

"I am writing to apologise that your request dated 10 May seems to have been overlooked in our mailbox.  Please can you confirm whether you are still interested in the information requested?  If you are I will aim to progress a response to your request as soon as possible."

Encouraged by the apology

I responded on the same day to say that I did indeed still want the information.  At that point, I took the view that the delay was due to a simple oversight.  Human error.  We all make them.  I was encouraged by the apology and the statement that if I still wanted the information the CPS would 'aim to progress a response to (my) request as soon as possible.'

Hmmm ...

Having heard nothing by July 31, I sent another email:

"You said you would aim to progress my request as 'soon as possible' - it is now 18 working days since this exchange - and more than 55 since my original request.  Please could you update me on your response?"
The response on August 5 was not encouraging:
"I am sorry that I have still been unable to provide you with a response to your request.  I have read your email today after returning from a short period of leave.  
I thought I should briefly confirm that my email of 5th July was to inform you that unfortunately our Department had not actioned your request at all up until this date, because it had been missed.  
As soon as you confirmed, on the same date, that you were still interested in the information requested we started processing it.  
Within the last 20 days please be assured that this has been receiving our attention.  
Having made further enquiries today I am still unable to give you a precise date of when we will be able to respond but as soon as I have an update I will let you know.  
Thank you for your continued patience."

Formal complaint to the Information Commissioner 

 To be honest, my patience was running out.  My request related to something in the news and the delays simply meant that the news was moving on - this is perhaps the most frustrating thing for journalists using the FoIA: information often takes so long to arrive that its impact is lessened.

At this point (August 6), I also sent a complaint to the Information Commissioner: the public official charged with overseeing the FoIA.  I received an automated response ... and nothing since.

So today, I wrote again to the CPS and got an immediate response:

"Sorry for the continued delay.  We have scheduled a further meeting to discuss the request later today.  I would hope that we should be in a position to respond in the first week of September, or possibly by the latter part of next week."
A further meeting?  Clearly the CPS doesn't think my request is as straightforward as I do.

The first week of September? More than 80 days since my original request.

Should I hold my breath?  Any advice on next steps gratefully accepted.

Friday, June 07, 2013

HoldtheFrontPage article on my blogpost

Regional newspaper website HoldtheFrontPage picked up on my post about the interim statements of Johnston Press and Trinity Mirror today and my conclusion that, in the end, readers are going to have to pay for local news.

I did, of course, put a couple of caveats on that assertion, the most important of which was that local news companies would have to produce something which people valued highly enough to pay for - and I did point out that this would inevitably lead to smaller businesses.

The article brought a flurry of readers to my blog and some comment on Twitter, some of which can be seen here on Storify.

Local World's David Montgomery: Local papers are in a fight for survival


Above is a short clip from the Culture, Media and Sport Select Committee hearing where Local World chairman David Montgomery spells out the issue facing local newspaper companies: it is a fight for survival.

What was clear from all of those who gave evidence to the committee was that they see more cuts coming.  Montgomery caused a furore over his suggestions that much of the 'human interface' will have disappeared within the next three or four years and that journalists currently work using a model from 'the middle ages, virtually', but the starting point for this comment was his statement that 'we can't keep taking costs out, but employing the same production techniques.'

Below is a clip in which he explains his vision for a future without human interface.  Sadly, when the chair of the committee, the Conservative John Whittingdale, presses him on exactly what he means, Montgomery gives a politician's answer and Whittingdale lets it go:


The general secretary of the National Union of Journalists, Michelle Stanistreet, described Montgomery's plan as 'a nightmare vision of journalism's future.'

Writing on the Guardian's Media Blog, Stanistreet said:
Amid the management-speak, Montgomery's vision is a chilling one. Does he really have so little inkling that it is high-quality journalism and top-quality writing that is the key to successful newspapers and websites? His thinking is sadly not unique; it is a pattern we are already seeing. Journalists are being reduced to pouring words – sorry content – into pre-determined grids, with the danger of turning newspapers into open sewers.
While many might not usually side with the NUJ, I doubt there are many journalists out there who would disagree with Stanistreet's comments.   She also repeats a gag I've heard from a few Local World journalists recently: 'We call him Rommel' Why? 'Because if we called him Monty it would mean he was on our side!'

It's all good knockabout fun, but, at the risk of upsetting the journalists out there, Montgomery is right.  Well, he's right to the extent that the newspaper companies cannot just keep taking costs out and continuing to do what they currently do .. which is to try to do what they've always done AND a whole lot more with fewer staff.

I've illustrated the catastrophic downturn in revenues faced by local newspaper companies over the past five years on this blog a number of times and pointed out that there was little they could do to prevent classified advertising - the hitherto funder of local journalism - from fleeing to the web where it works so much better.

The companies' response - to cut jobs and the quality of their product (fewer, smaller editions on cheaper paper and with less content) - has inevitably hastened many of their readers' decisions to flee likewise.

And, all the signs are that revenues are still falling (see the interim reports of two companies here) and that is going to lead to more cuts (a fact that was re-iterated by Montgomery in the clips above).  Given that, it is obvious that the newspapers cannot continue to operate the way they do today: people might not like the sound of Montgomery's plan, but nobody seems to have an alternative that makes any sense.

Saturday, May 18, 2013

No sign of digital rescue as newspaper revenues continue to collapse

Two interim statements from newspaper companies last week further demonstrate how their digital strategies won't save their businesses.

Here was how Trinity Mirror (PDF) trumpeted its highlights of the first 17 weeks of this year:

  • Improving revenue trends, in particular circulation revenues
  • Good growth in digital audience with unique users up 25% year on year to 31 million and page views up 36% year on year to 163 million
  • Continued strong cash generation with net debt falling by £25 million to £132 million
  • On track to deliver targeted structural cost savings of £10 million in 2013
  • We remain confident in the outlook for the Group's performance in 2013

Here's my version of the same figures:

  • Advertising revenues fell by 13% - accelerating over last year's fall of 10%
  • Digital revenues fell by 13% - despite all the focus on growing this area
  • Circulation revenues fell by 8% despite significant cover price increases
  • High debt levels continue to hamstring attempts to invest
  • Cost cutting remains the only way of keeping the business going.

Three days earlier, Johnston Press delivered a slightly more up-front (if equally depressing) set of highlights for the first 18 weeks of its financial year:

  • First increase in operating profit for almost 7 years - despite challenging economic environment
  • Total revenues down 11.4% on a like-for-like basis - revenue declines slowing month-on-month
  • Costs on track to reduce by over £20 million in 2013
  • 183 titles now successfully relaunched
  • New website rollout commenced for every title
  • Continued digital audience and revenue growth in the period
  • Focus on debt reduction maintained 

Put another way:

  • Total revenues fell by 11.4% - fractionally better than last year's 12.1%
  • Advertising revenues were down 15.1% - worse than last year's 12.7%
  • Display advertising was down 12.7% - worse than last year's 11.9%
  • Classified advertising was down 16.8% - worse than last year's 13.3%
  • Digital revenues grew by 8.1% - which is a lot better than Trinity, but is less than the 20% gained last year
  • Circulation revenues fell by 0.8% despite huge cover price increases
  • Massive cost cutting remains the only way to grow profit and repay debt

There's not enough detail in either report to be too specific, but it is clear that revenues are still falling at an alarming rate.  At Johnston Press, the full year extrapolation of the first 18 weeks would suggest revenue falls in excess of £37 million.

Newspapers losing £21 of print advertising for every £1 of digital

Earlier this year, JP CEO Ashley Highfield stated clearly that he saw online display advertising as the future of the business, indeed he said that by 2015, online would account for £52 million of revenues - just how difficult that task is can be seen from extrapolating this week's figures out for the rest of this year.

Ashley Highfield
Ashley Highfield:
photo by Ian Forrester
An increase in digital revenues of 8.1% across the whole year would bring in an extra £1.7 million, taking digital revenues for the full year to just £22 million.

As I've pointed out before, print revenues are draining away at a far faster rate: it looks as if £37 million will disappear this year - put another way, Johnston Press is gaining just £1 in digital sales for every £21 in print sales lost.

There can be little doubt that newspaper companies are shrinking in size.  Indeed, it is my belief that the only way local newspaper companies are going to survive is if they become small, low cost, digital and print businesses.

Readers will have to pay for journalism

That's not going to happen unless:

Firstly, readers value news enough to pay the cost of its production.  Journalism is expensive. Traditionally, news has been paid for by advertising, particularly classified advertising such as recruitment, property and motors.  That's not going to happen any more - classified advertising works better online than it does in print.

And, newspaper companies that think that they can build big online classified businesses are deluded.

The internet atomises information - someone looking for a job is not going to go to a news site to find it.  They will go to a specialist job site.  Therefore, businesses that want to make money out of jobs advertising do not need journalists to create an audience.  It follows that they can focus all their attention, and marketing, on producing a far better experience online for job seekers than any newspaper company ever will.

The same is true for every category of classified advertising.  Get used to it.

In fact, anything that you can wrap around news in the hope of subsidising journalism can probably be done better away from news.

So, the best way to pay for journalism is for the reader to pay for it.  In print, that means a much higher cover price.  That, in turn, will mean a much smaller readership as far fewer people will value news at the higher price.

Online, it means some form of paywall. But those who will not pay £1 (or £2 or whatever other price is needed) a day for a print package are not likely to pay £1 a day for a digital package either - news providers, particularly local news providers, are going to have to find a way to let people pay for what they want and nothing else.

That is going to mean a much smaller audience.  A much smaller business.  Which takes me on to my second point:

Secondly, local news companies will be owned by small local businesses.  There just won't be enough money in them to make it worthwhile for large national or international businesses, especially for those with big debts.

Warren Buffett
Warren Buffett: photo by Mark Hirschey
via  Wikimedia  Commons
The current owners look for 20-30% returns on turnover.  Renowned billionaire investor Warren Buffett, recently said he expects a 10% return on local newspapers he has bought, and that he expects that margin to reduce.

It works for him because he says he bought the papers cheaply, but, if he's right, and returns drop to below 10%, it is difficult to see any large business with debt and head office costs, wanting to be part of the local media scene.

If that happens, it seems to me that the most likely scenario is that more newspapers will close down, but will probably be replaced by much smaller, locally-owned businesses.

Wednesday, March 27, 2013

Newspapers' digital strategy amounts to clutching at straws

[Update: I wrote this post on Sunday and was going to publish it later in the week once I'd had a chance to add a few other points, but yesterday's announcement that another 30 editorial jobs were under threat at Johnston Press, has made me bring it forward]

Johnston Press clearly hasn't covered itself in glory over the past decade as it has cast about for a digital strategy, but has it now found the answer to the devastating disappearance of print advertising?

The company was far too slow off the blocks in the transition to digital and, in more recent years, growth has stuttered with revenue reaching £19.8 in 2008, before falling back to £18.4 million over the next three years.  Revenues finally got back above the 2008 figure last year when JP reported £20.6 million in its preliminary results.

However, what worries me most is that I cannot make the numbers add up.

Don't get me wrong.  I am not claiming to have any more foresight than anyone else and trying to read too much into annual accounts is a dangerous thing as they are complex, confusing and, of course, are there to try to persuade investors that the business is on the right track.

Nevertheless, this is the slide which Johnston Press was most excited about in the presentation it gave to investors last week.

CEO Ashley Highfield was pulling no punches.  This is what he said: "In our digital business, the most important number to focus on is that 39% - 39% growth in local online digital display.  This is the future of our business, advertising online and this, for me, is the most encouraging number in the entire deck."

And again, a few moments later in case you missed it the first time round, he said: "The most important number, the engine of our future growth, digital advertising, digital display, up 39%."

So there we have it - online display is the future of Johnston Press.

It might be the journalist in me, but I always worry when somebody gives me a percentage without giving me a base figure.  Digital display is up 39% - on the face of it, that's great news, but what does it mean in hard cash?

Well, luckily, last year, in the presentation of the 2011 accounts, Highfield gave a few more details around actual numbers.  In 2011, online display amounted to a nice round £5 million.  So, a 39% increase would add another 1.95 million, taking the total to just below £7 million.

It's clear from what Highfield said in the presentation that most of this increase has come from bundling digital advertising along with print advertising.  "When I joined [November 2011], just 10% of the time did we include a digital upsell when we sold a print advert. By the end of last year, 40% of the time we bundled print along with digital."

There's a sum in there somewhere which ought to give us an idea of the potential revenues that upselling might bring. 

In the worst case scenario, the extra upsells (ie 30%, as the upsells increased from 10% to 40%) equate to about £2 million, giving a maximum potential revenue from upsell of about £6.7 million.  

In the best case scenario, the extra upselling was all done in the last month of the year and only accounts for about 8.5% of what is available from the extra 30% - that means that the full 30% would be equal to something like £24 million and the total potential is nearer £80 million.

It seems likely that the upsell has been building through the year and the real potential is somewhere in the middle of these numbers.  And indeed, this is supported by the note in the preliminary results presentation below:

This says that the total increase in digital revenue will be £32 million over the next three years - which is the timespan given by Highfield for moving from 40% upsell to 100% - suggesting upsell of print ads might come in at, say, £20 million as Highfield also makes a big play about new national verticals around what's on (a 'sort of Time Out for the provinces') and a wannabe Groupon.

Whatever the exact figures, my concern is two-fold.  Firstly, even at the high end, digital display would not be the saviour of the business.  JP has lost more than £220 million of advertising revenue ... and the print numbers are still falling. £30 million might stabilise the situation momentarily, but it is not going to give the company the sort of money it needs to invest in the future.  And, according to Highfield, it will take three years to get to 100% upsell: in the past three years, print advertising revenues at JP have fallen more than £75 million.

Secondly, JP is too late to this particular bandwagon.  At least one wheel is probably already off.  Banner advertising is hated by consumers, is almost as unpopular with publishers and barely works for advertisers. Plenty of people who are far more qualified than me, believe the end is nigh for the unloved banner.  And as for Groupon ...

So, what's going to happen at JP?

I wish I knew.  Unless there is an extraordinary turnaround on print advertising (unlikely) or the massive hikes in newspaper cover prices (up to 50%) bring in pots of new money (equally unlikely), there are going to be more cuts.

Indeed, Highfield acknowledged as much.  He told investors: "We don't anticipate, or need, 2013 to be as strong a year in terms of cost or headcount reduction."

Cuts made last year will bring another £10 million of savings this year.  "We are probably going to be making something like another £15 million savings over and above that."

Will £15 million in cuts be enough?  Not if Highfield wants to keep his promise to investors that JP will move back into profit growth and print advertising remains on a downward trend.

Although about £7 million will be re-invested in the business (mostly on 'technology and infrastructure'), that £15 million of savings this year will be painful and will involve more job cuts - it's difficult to say how many, but with average FTE costs of about £25,000, it would take 600 to make up £15 million.

I hope I'm wrong, but I don't see how this can be the year that JP halts the profit slide without making far more than £15 million cuts if it is relying on its flawed digital strategy.

Let's hope Highfield has a different trick up his sleeve.