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August 24, 2018

Facebook algorithm changes dented digital audience growth says Archant as it reveals plans for development of Norwich HQ

By Freddy Mayhew

Archant has said changes to Facebook’s News Feed algorithm this year, which prioritised content from friends and family over media and businesses, dented its digital audience growth.

The regional newspaper and magazine publisher said growth was down 6 per cent in the second quarter of the year, following a 9 per cent climb in the first quarter.

Digital audience growth was up 3 per cent year-on-year for the period, the group said in a message to shareholders earlier this month, seen by Press Gazette.

Archant chairman Simon Bax said the drop followed a “change in a Facebook algorithm which reduced the priority it gives to news stories, meaning few click-throughs coming from that source”.

In January, Facebook founder and chief executive Mark Zuckerberg said the social media giant would focus on “meaningful social interactions” in its News Feed – where users share content.

He told users in a blog post: “As we roll this out, you’ll see less public content like posts from businesses, brands, and media.”

Bax said trading at Archant, which publishes regional daily the Eastern Daily Press along with a number of weekly newspapers across the country, had “held up largely in line with our budget”.

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“The success story is digital in all its forms which, excluding classifieds, has grown by almost a quarter,” said Bax.

“We have improved yields through new partnership deals, we have increased the levels of video and interaction on our sites, and have improved [web page] load speeds, to produce the highest digital revenue growth we have seen for some years.”

But when it came to print, he said circulation “will continue to be difficult”.

“Readership habits have changed, readers are older and fewer people buy newspapers and magazines. The loss in footfall in many high streets is affecting magazine sales in particular with lower casual purchases,” Bax said.

“We have had a strategy for many years now of encouraging subscription sales for magazines and this continues.

“We have put in place a number of creative ideas for selling magazines through the news trade, such as pairing with other publishers’ titles, by tactically adjusting cover prices or offering added incentives to purchase.”

Archant’s pension deficit was said to have fallen by about £6m since the start of the year to £23m.

Bax said staff concerns over pay had prompted a “small pay rise” and improvements in training opportunities and management communication.

He also revealed plans for the development of Archant’s Norwich headquarters, and home of the EDP, Prospect House, which Press Gazette reported last year that the group was looking to move out of because it was now “too big” for its needs and was “starting to show its age”.

An artists’ impression of Archant’s Prospect House development. Picture: Norwich City Council

Bax said Archant was looking to sell the site to a developer, with a proposal before Norwich City Council to demolish it and build a mix of apartments and office space – although planning permission has yet to be granted.

He said Archant was looking to sell the site in 2019. It currently houses more than 500 staff.

Looking ahead to the rest of the year, Bax said it “looks challenging, but with targets that are achievable”.

“We have some cost increases to come in the second half of the year, particularly with newsprint, our second largest cost, where we are facing a perfect storm of restricted supply and adverse currency exchange rates causing prices to rise,” he said.

“We are doing what we can to mitigate this, recognising it will directly affect profits, and we remain positive.

“We are still in the early stages of our strategy and optimistic on progress, but we do not consider it appropriate at this time to declare an interim dividend.”

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