Murdoch’s Teflon margins: Even with Dow Jones aboard, News Corp’s newspapers still look good

Posted by Peter Kirwan on 8 August 2008 at 17:25
Tags: Media, News Corp, News International, emap

If you work at Wapping, what should you think of News Corporation’s full-year results? Here’s the stuff investor relations would like you to shout about:

• Revenue up by 9%
• Operating profit up by 18%
• Q4 net income per share up 27%

Yadda-yadda. So is everything really rosy in the garden? Given News Corp’s typically miserly approach to disclosure, it’s hard to say.

In particular, News Corp’s second-quarter earnings release is studiedly guarded about progress at Dow Jones, which became part of the P&L in Q1.

It tells us, for example, that Dow Jones generated $48m in operating profit before amortization and depreciation during News Corp’s Q4 (Q2 in calendar terms).

But it doesn’t tell us how much Dow Jones generated in revenues. As a result, there’s no way to assess the unit’s margin performance.

There’s probably a very good reason for this.

Last year, before the acquisition of Dow Jones, News Corp’s newspapers generated margins of 20.9%.

Any hint that these profits are being diluted by Rupert Murdoch’s high-priced acquisition would have enraged investors and analysts.

Happily, this week’s year-end results from News Corp don’t offer any real evidence of dilution.

Even with Dow Jones & Company on board for two quarters, News Corp’s newspaper division still managed to generate operating margins of 19.2% during the 12 months to 30 June.

It might not look like much, but this is really quite a feat.

The important point to remember is that pre-Murdoch Dow Jones was a dog (there’s no other word for it) in terms of profitability.

In Q307, for example, the company generated operating profits of $40.9m on revenues of $493.3m. That’s a paltry operating margin of 8.2%.

Historically, it was never much better.

• Q207: 12.5%
• Q107: 7.5%
• Q406: 13.1%
• Q306: 3.3%

The question is this: how has News Corp managed to shoehorn such a large and underperforming asset into its newspaper division without hammering its own margins?

Dow Jones was a biggish acquisition in revenue terms. Its $1.8bn annual revenue base compares with News Corp’s pre-acquisition newspaper-related revenues (for 2007) of $4.5bn.

And yet. . . despite absorbing the big revenues and poor profitability of Dow Jones, News Corp’s margins have barely registered the impact. Here’s what’s been happening on a quarterly basis:

News Corp newspaper margins Q208: (with DJ) — 19.2%

News Corp newspaper margins Q108: (with DJ) — 17.9%

News Corp newspaper margins Q407 (without DJ) — 21.3%

News Corp newspaper margins Q307 (without DJ) — 18.7%

News Corp newspaper margins Q207 (without DJ) — 23.4%

News Corp newspaper margins Q107 (without DJ) — 20.3%

(NB: These margins are calculated before depreciation and amortization)

Yes, there’s a small dent visible in the margin during Q108, the quarter in which Dow Jones was included within News Corp’s numbers for the first time. But apart from that, the margin performance looks unbroken.

How have Murdoch & Co. managed this feat? The answer to the question — I suspect — falls into two parts:

1) They’ve been pressing every possible button in a bid to increase margins at Dow Jones & Company (not terribly surprising).

2) They’ve been stripping costs out of every other News Corp-owned newspaper worldwide.

Is Rupert Murdoch’s obsession with the Wall Street Journal going to weaken The Sun, the News of the World, The Times and the Sunday Times? Does the competition have an opportunity to benefit from this in the short and medium term?

My guess is that the answer to both of these questions is yes — notwithstanding recent largesse in terms of new print plants, redesigns and a “permanent” 5p cut in the price of The Sun.

Dow Jones won’t get fixed overnight. Until it does, the rest of the Murdoch empire will almost certainly need to share the burden of rebuilding it.

How big are the hidden costs of tabloid excess?

Posted by Peter Kirwan on 30 July 2008 at 15:10
Tags: News International

No doubt Colin Myler, editor of the News of the World, carries around in his head a moral profit and loss account that allows him to balance his Catholic faith against the occasional need to broadcast footage of S&M orgies on the web.

In the real world, it was left to Chris Horrie, writing in the Guardian on Monday, to take a crack at the numbers behind the News of the World’s brief liaison with Max Mosley. Horrie’s P&L is vague but it goes something like this:

Revenue/Positives:

• Rumoured 200,000 sales boost in print on publication
• Video footage establishes New of the World as “global brand”
• Also attracts younger online readers — positive in demographic terms
• Fear of Mosley-type cases will freeze some rivals out of the kiss-and-tell market

Costs/Negatives:

• £1,000,000
• The costs of ongoing promotion to retain new readers
• Potential costs of forthcoming Mosley libel action

Quantifying stuff like this on a spreadsheet is the kind of thing that delights young consultants from the Boston Consulting Group, which has been retained by James Murdoch to oversee the remaking of Wapping.

More than most of us, consultants appreciate that you can’t manage what you don’t measure.

However, before declaring an pre-tax profit on the Mosley affair for News International, the rosy-cheeked MBAs should pick up the phone to Louis Charalambous of Simons Muirhead and Burton.

As Patrick Smith’s recent piece in Press Gazette demonstrated, Charalambous is that rare thing: a solicitor who is visibly, righteously, angry — not on behalf of Max Mosley, but on behalf of his client, Robert Murat.

Murat has just picked up £600,000 plus apologies from — wait for it — The Sun, News of the World, The Daily Mirror, The Sunday Mirror, Daily Star, Daily Record, Daily Express, Sunday Express, Daily Mail, Evening Standard and Metro.

(I thought I’d mention the roll-call: as Max Clifford said: “Because all of them are guilty with Robert Murat you hardly read a thing.”)

Here’s part of what Charalambous had to say:

“There was a pack-dog mentality here and my clients and their families were the prey. The children of Robert and Michaela, little girls, one not much older than Madeleine, were hounded and had to go in and out of their homes with coats over their heads.

“I’d like to invite the editors of the worst of these titles to have tea and cake with them and explain why they let their journalists and photographers harass them. They are now recovering but the effects are long-lasting.”

(Tea and cake? Perhaps Mr Myler could stop by for slice of Battenberg, brandishing one of his spiritual spreadsheets. . .)

Charalambous is surely on to something when he says that cases like Murat/McCann result in trust ebbing away among 15m Red Top readers.

That’s one way of looking at it. Another involves reading a bit of Irvine Welsh — and understanding the transformed morality of an audience that’s at liberty to snort vast quantities of cheap coke, buy bondage gear on the High Street and consume a staggering variety of porn on the web.

Coincidentally, this same audience has become intimately familiar with the previously hidden mechanisms that propel the celebrity merry-go-round.

This is the kind of leisure regime that changes perceptions. To the extent that we the readers are less shockable, we’re also liable to become more cynical about tabloid motives.

From both directions — the decline of trust and the rise of cynicism — the tabloids incur exceptional costs at the extremes of operational procedure. Inevitably, this involves a write-off against the assets on News Corp’s balance sheet. Sooner or later, an exceptional cost on the profit and loss account will follow.

Next: how about a risk analysis?

The risk in question involves a plaintiff who is less foreign than Murat, less unsympathetic than Mosley. A plaintiff who unexpectedly takes the tabloids to the cleaners — and very obviously secures the sympathy of the public.

It’s just possible that a fracas of this kind could result in what Charalambous recommends — the scrapping of the conveniently hapless Press Complaints Commission and its replacement by “an Ofcom-type body set up to impose swingeing fines on papers which just don’t give a damn”.

Somehow, the boys and girls from the Boston Consulting Group need to get that risk into their spreadsheet.

They need to quantify it in terms of both advertising and circulation. Next, they need to balance it against Rupert Murdoch’s political influence and the skill of Wapping’s editors.

The net risk remains small. But it’s growing. Given the wrong (right?) circumstances, things could change very quickly for the Red Tops.

Common sense, a decade late: James Murdoch cuts 20% of sales jobs at News International

Posted by Peter Kirwan on 9 July 2008 at 16:40
Tags: News Group Newspapers, News International, Times Media

James Murdoch’s decision to merge the separate sales teams that used to service Times Media and News Group Newspapers might sound a bit radical.

In reality, it’s hard to describe the move as anything other than common sense, implemented a decade late in a sector well-known for its old school approach.

From September, News International’s sales teams will flog space through “agency-focused hubs, each housing between six and 10 people”.

The stated aim, of course, is for sales folk to build deeper relationships with the big agencies that generate most of NI’s ad revenues.

The unstated aim involves cutting perhaps 20% of the employment costs out of NI’s sales organization. News International is planning to make 100 out of 450 sales staff redundant.

From a bean counter’s point of view, the timing is excellent. The reorganization was worth doing anyway. But no doubt Murdoch Jr. has grabbed the chance to add a bundle of recession-related job cuts into the total.

The anonymous jeers from rivals quoted in Media Week cut very little ice. One suggests that asking the same team to sell space in both The Sun and The Times is “not a natural fit”.

Why not? Despite demographic differences, both papers trade in the same currency of eyeballs. By selling across a portfolio of titles, News International will hope to generate more incremental revenues than it will inevitably lose by demolishing title-focused sales teams.

The second complaint from an anonymous competitor goes like this:

“I am not convinced it is the best way to go forward. The changes will not grow their revenue base, but it will be a more efficient way to generate sales. This is about cutting out costs.”

. . . Which, last time I looked, seemed to be a perfectly sensible response to recession.

Welcome to The Great Unbundling, Mr Rusbridger

Posted by Peter Kirwan on 25 June 2008 at 17:11
Tags: Associated Newspapers, Guardian Media Group, Independent News & Media, Telegraph Media Group, Times Media

Scientists say that falling in love alters our brain chemistry, and therefore the way in which we perceive the world.

Presumably, it’s the same with losing.

Last week, the Mail Online overtook the Guardian and the Telegraph to become the UK’s most-trafficked national newspaper site.

Now, suddenly, the Guardian is suggesting that it’s becoming increasingly “anachronistic” to compare ABCe data for newspaper websites.

Yes indeed. That’s because the Mail’s great surge in online visitors hasn’t been generated by what Mike Butcher, the author of the piece, would call “news”.

No — it’s all down to Keira Knightley’s “razor sharp” collarbone and pictures of an emaciated and distressed Amy Winehouse wandering around the streets of London in the small hours dressed only in her underwear.

Butcher argues for a purist view. He accuses the Mail Online of playing fast and loose with link bait (which is patently true).

Sites like the Mail Online and The Sun — with its three lane pile-up of tits, bingo and fantasy football — aren’t really news sites at all, he argues. They have more in common with the US celebrity site TMZ.com.

As for The Guardian, well, it seems tempted to pick up its toys and walk away. Now that the Mail Online has bested it, Butcher tells us that:

guardian.co.uk. . . will be more interested in how it is faring against the Huffington Post, a liberal US blog network, than comparing itself to other domestic newspapers.

Of course, tinkering with competitive sets in the wake of commercial defeat has a long and venerable history within sales organizations. It goes on everywhere, and it’s symptomatic of denial.

Commercially, no-one will be fooled. That’s because the web’s animating force is all centripetal, not centrifugal. Competitive sets are getting bigger, not smaller.

In terms of advertising revenues, the Guardian must compete directly with the Mail Online as well as Google, MSN and Yahoo — and a host of others.

In the absence of pornography, violence and racism, the quality of news coverage that brings in the punters simply doesn’t matter to advertisers.

That said, Butcher’s piece does point to something important.

The Mail Online’s successful experiments with link bait are a prime example of what the author Nick Carr calls the “unbundling” of news content.

No longer do we have to pay a set fee to buy a newspaper that contains a mix of highbrow and lowbrow content.

Zooming in from Google in 0.25 seconds, we can get our fix of “+keira +knightly +baftas” and exit just as rapidly as we arrived, leaving any “serious” content undisturbed.

The real question for editors at the Guardian and the Telegraph is how to preserve resources for the news content that Rupert Murdoch calls “boring”. They need to do this in a digital world where 20%-30% annualized growth is a minimum requirement.

The pressure to unbundle, to encourage links with bait, is enormous. It can only grow. For better or worse, it will influence news agendas.

If mentally cordoning off a bit of cyberspace and labeling it “serious news sites only” helps editors to manage the pressures, fair enough.

But let’s not pretend that this will influence the ad market.

Because it won’t.

Who will save Kelvin?

Posted by Peter Kirwan on 20 June 2008 at 11:00
Tags: GCAP PLC, Independent News & Media, Media, News International, United Business Media, emap

The happy-go-lucky saga of Kelvin MacKenzie’s potential candidacy in the by-election at Haltemprice and Howden cannot be allowed to hide the bleak reality.

Kelvin MacKenzie is a man who has lost an empire, but has yet to find a role.

Friends are worried that he is turning into the media world’s equivalent of Gazza.

The drink-sodden Geordie’s latter years were a steady downward spiral of broken dreams in dreary places: Gansu Tianma, Wolves, Boston United, Kettering Town and Burnley.

All the time, he was being helped through the darker moments by old mates from Spurs like Terry Vanables and Gary Mabbutt.

It’s a similar story with MacKenzie, who never properly recovered from the shock of leaving The Sun.

He was edged out of Sky after a few months in 1994. (The job had been arranged by his mate Rupert.) Then it was on to broken dreams in dreary places: LIVE TV, Talk Radio, Highbury House, Media Square.

Every one a winner? Not quite — despite the quiet behind-the-scenes help from his old mates Rupert and Les. At every port of call, MacKenzie’s self-destructive talent for destroying shareholder value resurfaced to devastating effect.

In the Sun column he used to announce that he wouldn’t be standing against Davis, McKenzie admitted that cashflow is, er, a little bit tight.

Will anyone help this once-proud man to conquer his demons? For his own good, MacKenzie needs to be prevented from ever running a business again. . .

Succeeding together with passion and trust: James Murdoch sends in the secret policemen

Posted by Peter Kirwan on 13 June 2008 at 16:08
Tags: News Group Newspapers, News International, Times Media

There are times when the role of management consultants is akin to that of the Stasi.

The classic example involves the arrival of a new chief executive in an organization that has grown used to doing business successfully under a long-lived predecessor.

The consultants are told to fan out, get under the surface, find out what’s going on and report back. Woe betide any manager whose pitch to the new CEO is contradicted by the consultants’ findings.

The other day, a News International journalist told me that “everything at Wapping is in flux”.

On the commercial side, I fancy it’s worse. According to Media Week, News International has entered a “consultative process”. Whether that means consultants doing their jobs, or consultation prior to redundancies, remains unclear.

What’s clear enough is the belief that James Murdoch wants to knock down the walls that separate NI’s publications into title-specific silos.

Instead, the talk is of “three separate units across News Group Newspapers and Times Media comprising commercial, digital and operations”.

In other words: a big restructuring, in which jobs will be lost as high-level commercial folk apply for new roles.

Take Paul Hayes, managing director of Times Media, and Mike Anderson, managing director of News Group Newspapers. Media Week suggests that these two are likely to find themselves competing to run operations, digital or commercial matters across the whole of NI.

Mike Gordon, deputy managing director of Times Media, seems likely to be caught up in the same contest.

And don’t even get me started on marketing, where the likely outcome of BCG’s review is a new chief marketing officer’s role.

Presumably, both Roland Agambar, News Group Newspapers’ sales and marketing director and Katie Vanneck, sales and marketing director for Times Media, will end up competing for that particular plum.

At Boston Consulting Group’s web site, the firm lists its mission as “succeeding together with passion and trust”.

No doubt there’s plenty of both circulating around Wapping at the moment.

If US newspapers resemble the Irrawaddy delta, is Google’s Eric Schmidt planning an airlift?

Posted by Peter Kirwan on 13 June 2008 at 00:30
Tags: Gannett, Google, Guardian Media Group, News Corp, Yahoo

Eric Schmidt, the chief executive of Google, is not what you’d call a loose cannon.

This is a man who, in previous incarnations, became an arch-enemy of Microsoft’s expanding monopoly during the 1990s. Now, at the top of a company surrounded by anti-monopoly moaning, this poacher has become a extremely adroit gamekeeper.

So it’s been fascinating to watch Schmidt talking with apparent compassion about the plight of US newspapers twice this week — once in Washington DC and once in San Francisco.

In Washington DC, he said:

“We all care a lot about this. Newspaper demand has never been higher. The problem is revenues have never been lower. So people are reading the newspaper they’re just not reading it in a way where the newspapers can make money on it. This is a shared problem. We have to solve it. There’s no obviously good solution right now.”

In San Francisco, he said:

“It’s a huge moral imperative to help here.”

To the best of my knowledge, this is the first time that Schmidt has talked in public about Big Media’s plight in the same way that the boss of Oxfam might talk about the need to get aid into the Irrawaddy delta.

Perhaps Schmidt had read the news earlier this week about Gannett’s £3bn write-down — and found his heart melting with pity for the content companies that supply Google with so much valuable raw material.

Perhaps. But it seems equally likely to me that Schmidt’s plaintive outburst was prompted by reading advance copies of the European Commission’s 100-page report on Google’s acquisition of Doubleclick. (The full monty was published yesterday. You can download it in PDF format here.)

The Google-Doubleclick combination is highly controversial. By some accounts, Google already controls around 70% of the paid search ad market, which in turn comprises slightly less than half of all online advertising. By acquiring Doubleclick, which has a big market share in online display, the company could extend its dominance from search to the serving of what we might still call banners and buttons.

In the event, the Commission approved Google’s acquisition three months ago. But the retrospectively published report will have made grim reading for Schmidt.

Among other things, the report says this:

“Many advertisers depend on Google’s search ad services and. . . the revenues derived from Google’s search ad intermediation make it an almost irreplaceable source of income for many publishers.”

The report also suggests that Google’s rivals “do not seem to be a real alternative”. That’s because — in the Commission’s eyes — Google possesses a “sufficient degree of market power to be able to foreclose rivals in the ad serving market”.

Irreplaceable source of income? Power to foreclose rivals? No real alternative? This is monopoly talk.

Just in case you were in any doubt about that, a Brussels-based lawyer called David Wood has been giving Business Week the benefit of his views on the document.

Wood believes that the European Commission has put Google “on effective notice that its behavior will now be measured as that of a dominant undertaking”. He adds:

“This has always not been about whether the transaction would be cleared but what would happen afterwards. The next phase is looking at the behavior of these companies [Google and Doublclick]; let’s see if their behavior is allowed by competition law standards.”

In passing, it’s worth noting that Wood works for a lobbying outfit called The Initiative for a Competitive Online Marketplace, or ICOMP for short.

ICOMP is an anti-Google lobbying front funded by Microsoft and run on a day-to-day basis by Burson-Marsteller, the PR agency.

Don’t let that make you too skeptical about Wood’s comments.

Instead, ask what exactly was going through Eric Schmidt’s mind when he decided to make nice with the ailing US newspaper industry this week.

As Eric Schmidt knows well, ICOMP represents Microsoft’s effort to use against Google exactly the same lobbying tools that he and his allies used against Microsoft in the 1990s.

With the insight of a poacher turned gamekeeper, Google’s boss knows precisely where this particular road leads. In Microsoft’s case, it led to the company being tied down by anti-trust actions that started in 1998 and continue to this day.

Not coincidentally, Google’s monopoly has been the subject of comments by interested onlookers such as Rupert Murdoch, Sly Bailey and Paul Myners in recent weeks.

For the moment, however, ICOMP’s list of supporters mostly remains a rag-bag of obscure European names, including hotel groups in Spain and ad agencies in Austria.

This is not yet the kind of broad front that creates big waves in Brussels. In the name of shareholder value, Google would to keep it that way — for as long as possible.

Better than anything else, this explains the paroxsym of pro-newspaper sentiment that seized Mr Schmidt this week.

The Independent: Leader of the reactionary party, and loved by the City

Posted by Peter Kirwan on 5 June 2008 at 14:17
Tags: Daily Mail & General Trust, Independent News & Media, Johnston Press, News Corp, Telegraph Media Group, Trinity Mirror

At the World Association of Newspapers congress in Gothenberg, Independent News & Media reconfirms its web-wary credentials.

Here’s Simon Kelner, editor of the Independent, deploying a line that’s at least a decade old:

“I have the impression that the internet is like going into a bar where everybody is shouting, whereas when I read a newspaper it is much easier.”

Not to be outdone, Gavin O’Reilly also reached into the store cupboard of web scepticism to describe printed newspapers as the “ultimate browser” (oh dear). O’Reilly went on to add:

I find it rather remarkable how unsophisticated the commentary is on our industry today. They [media commentators] seem to support the conventional wisdom that newspapers are soon to become a relic of the past and that opportunities only exist in a digital sense.

For good measure, he compared bloggers who criticize ACAP to the perpetrators of drive-by shootings.

If you work at either of the Independents, frustration would be a legitimate response. And no matter where they work, Digital Bolsheviks who work tirelessly to bring about the dictatorship of the digerati will shake their heads sadly.

But hold on a second. Take a look at activist investor Denis O’Brien’s criticisms of IN&M. Is he worried about a lack of investment in digital publishing? Apparently not. Instead, O’Brien complains that the IN&M board isn’t sufficiently independent.

Is the City concerned about IN&M’s lack of enthusiasm for digital?

Nope. Nine analysts follow IN&M. Seven of them are currently advising investors to hold or buy, or expect the stock to “outperform” the market.

Only half of the 16 analysts that follow Trinity Mirror analysts think similarly. Fourteen follow Johnston Press, but only nine attach a hold, buy or outperform rating to the stock.

Although some of IN&M’s popularity is attributable to the presence of Denis O’Brien on the shareholder register, it’s also true that the City likes IN&M.

It likes the fact that IN&M isn’t very interested in the future of news organizations.

And it likes the company’s exposure to the developing world. Overseas adventures are a tried-and-tested method of generating new revenues. You can’t say that about digital investment.

In a recession, the public markets are no place for revolutionaries. Trinity Mirror has been hamstrung by its quoted status for years. Johnston Press is no longer using its quoted status to consolidate the industry. And IN&M has emerged as the leader of the reactionary party.

Among UK-based quoted news organisations, only DM&GT seems to enjoy some freedom to manoeuvre. News Corp enjoys something similar — largely because, like DM&GT, it has diversified intelligently and is still run by a shareholding figurehead who is more than a creature of the markets.

But for the next couple of years, and possibly beyond that, the best way of fomenting a digital revolution will be to do it privately.

In this respect, the Telegraph and the Guardian are both object lessons. Both are shielded in their own ways from short-term investor demands. Not surprisingly, both sit the top of the online traffic rankings for national newspaper sites.

Conicidence? I don’t think so.

Let’s have a fight about web metrics — Part 2

Posted by Peter Kirwan on 23 May 2008 at 19:06
Tags: Associated Newspapers, Guardian Media Group, News International

I was only joking this afternoon when I said it would be fun to have a fight over the nationals’ traffic figures.

But it seems they’re serious about it.

It turns out that the Guardian, News International and Associated Press are all suspicious about the rapid increase in traffic at Telegraph.co.uk, which this week culminated in the site becoming the UK’s most popular national newspaper site.

ABCe measured 18.6m uniques at Telegraph.co.uk during April.

But the site’s rivals had already raised concerns about ABCe’s March data with the Joint Industry Committee For Web Standards (Jicweb), the industry body that advises ABCe.

Brand Republic carries (reg. reqd.) a bland statement from Jicwebs that we can’t trace to the organization’s site — and which tells us very little about what’s at stake.

But there certainly seems to be a review of ABCe’s methodology in the works. Jicwebs is saying that this has been partly prompted by the rival publishers’ complaints.

Sheesh. We can file this one under: Life, art and imitation of the latter.

Forget about ABCe; let’s have an old-fashioned fight about traffic numbers

Posted by Peter Kirwan on 23 May 2008 at 11:38
Tags: Associated Newspapers, Daily Mail & General Trust, Guardian Media Group, News International, Telegraph Media Group

The Telegraph.co.uk has ended the Guardian’s long reign as the most widely-read national newspaper website. So writes my colleague Martin Stabe on the basis of ABCe data for April that run like this:

• Telegraph.co.uk: 18.6m unique users
• The Guardian: 18.54m unique users
• Mail Online: 18m unique users
• Times Online: 15.4 unique users
• Sun Online: 14m unique users
• Mirror.co.uk: 4.28m unique users

Now ABCe hasn’t been established as the gold standard of traffic measurement for very long. But already, the new regime has become boring.

Am I the only one who feels nostalgic for the days of near-impenetrable arguments about rival sets of traffic figures propounded by executives who themselves don’t fully understand the data? Surely someone could be persuaded to start an argument?

Admirably, ComScore seems interested in fomenting a barney. Just as ABCe’s hegemony seems to be solidifying, the panel-based traffic counting firm has decided to start publishing monthly figures for newspaper sites for the first time.

ComScore’s traffic analysis of the UK’s nationals for March looks promisingly discordant with ABCe — and (coincidentally) rather positive for News International:

• The Sun: 4.3m visitors
• The Guardian: 3.6m visitors
• Telegraph Group: 2.8m
• Times Online: 2.6m
• Daily Mail.co.uk: 2.4m
• Independent.co.uk: 1m
• Mirror.co.uk: 990,000

OK — more seriously now. . . ComScore’s numbers are scaled up from a “panel” of UK consumers.

The UK bit is important. The Mail Online, for example, ranks high in ABCe, but boasts a large overseas readership. Cut that out influence — as ComScore claims to have done — and the site’s aggregate traffic looks much less impressive.

ABCe’s data is pulled directly from publishers’ server logs. Quite apart from its UK focus, ComScore suggests that its figures are lower than others because:

1) Its panel-based (research) methodology is not skewed by cookie deletion.

2) It counts as one individual the same person hitting a site from different locations (eg: home and the office).

These may well be persuasive arguments. But it’s hard to tell.

As the spat over ComScore’s data for Google’s Q1 clickthroughs proved, ComScore’s problem is a lack of transparency about how its research methodology works in practice.

Coincidentally, the same argument applied to Nielsen NetRatings. The last time I looked at its site, it contained the vaguest of descriptions of its methodology, lost beneath layers of corporate verbiage.

And Hitwise? I like the idea of pulling traffic numbers from ISPs’ servers (which is what the company does). In my humble opinion, Hitwise also does a slightly better job of explaining its methods to the outside world. . .

Of course, all of this is irrelevant if all you need are figures to bamboozle gullible clients during the first 20 seconds of a sales presentation. . .