Ending distribution of Metroland flyers could accelerate shift to digital advertising, experts say

Canada’s declining flyer industry and the many companies that rely on it for advertising suffered another blow last week when one of Ontario’s largest media conglomerates stopped printing 70 community newspapers and announced the end of its circular activity.

Newspapers owned by Metroland Media Group were often filled with flyers from major retail chains such as Loblaw Companies Ltd., Walmart Inc. and Metro Inc., as well as local businesses showcasing their products and services.

Experts say Metroland’s departure will push many companies even more toward digital marketing and accelerate the decline of Canada’s print advertising sector.

“I think some will probably stop using paper altogether,” said Claire Tsai, a marketing professor at the University of Toronto’s Rotman School of Management.

“Some may still try, but overall, on a global level, you will see less paper usage.”

The number of shuttered newspapers has accelerated over the past decade as Canadians have increased their use of smartphones, encouraging companies to launch digital flyers and apps offering savings or loyalty rewards to users.

While Tsai said some real estate agents will likely stick with print advertising because of the large photos they can use, others will move away from that medium, especially if it becomes more expensive.

“When a company leaves the sector there is less competition and so that can have cost implications and it becomes much more expensive to use papers to reach customers,” she said.

Metroland newspapers were often the only print journalism publications in the markets they served and even regions with competitors have seen a less vibrant media landscape in recent years.

The federal government has counted some 474 Canadian media companies having closed their doors between 2008 and 2023.

During the same period, marketing investments shifted online.

The federal government said Google and Meta, which own Facebook, Instagram and WhatsApp, had a combined 80% share of the country’s $14 billion in online advertising revenue in 2022.

Meanwhile, the flyer market has shrunk to 13 billion copies distributed each year, down from 17 billion copies about 10 years ago, estimated Joanne McNeish, an a*sociate professor at Toronto Metropolitan University specializing in in marketing.

McNeish attributes the reduction to the growth of coupon and savings apps, retail store apps and websites, as well as increased ad spending directed toward digital platforms.

“Due to the dominance of search engines and social media, fewer and fewer consumers appreciate the editorial function of newspapers, so their readership and a*sociated advertising dollars have declined, as have the number of leaflets,” he said. she wrote in an email.

In some areas there has even been a war against flyers. The City of Montreal, for example, banned the distribution of bags of printed leaflets, except to people who choose to receive them, in May, following a similar decision made in Mirabel, a region north of Montreal.

But paper leaflets still have their advantages. They can often make more of an impression because of their visual and tactile nature, which activates more senses and makes it easier to retain information, McNeish said.

Tsai added that when people browse information online, they tend to focus on tangible things like price, but less on “soft information” like brands and visuals.

Online advertising also doesn’t reach several demographic groups, such as seniors or low-income Canadians who are less likely to have a phone or computer, Tsai said.

But the leaflets placed in the newspapers are still read.

A 2020 survey of more than 4,500 Canadians by newspaper publisher Postmedia Network Canada Corp. found that 85% of respondents read printed leaflets at least some of the time, and more than half of respondents said they always read printed leaflets.

The latest figures seen by McNeish show that newspapers still dominate the unaddressed admail market, with major newspapers holding 29 percent of the market and local papers that carry flyers, 22 percent.

McNeish expects Canada Post and other private distributors, which hold about 20 percent and 27 percent of the market respectively, to target the 6 percent share that Metroland newspapers held.

But some of that advertising will likely also be shown online.

“In general, larger national retail companies are better able to move into digital media and build apps,” she said.

When asked if they would continue to distribute flyers through other means after Metroland’s closure, Loblaw, Walmart and Canadian Tire Corporation Ltd. did not respond. Longo Brothers Fruit Markets Inc. declined to comment.

Metro spokeswoman Stephanie Bonk said the company expects flyer distribution to be halted for a week after Metroland’s decision. Metro is “working with current and new partners on a plan so customers can expect to receive their Metro and Food Basics flyers in the mail the following week,” she wrote in an email.

Loblaw has gradually withdrawn from the flyer business. In March 2020, as COVID-19 raged, the company removed in-store flyers, fearing they could help spread the virus.

It later permanently ended publishing paper flyers for several of its chains, including No Frills, Real Canadian Superstore and Maxi, as it worked to move promotions online and on its app.

Other retailers took similar steps in the years before Metroland’s cuts, which he attributed to “unsustainable financial losses stemming from changing consumer and advertiser preferences.”

“The decline in the print and leaflet distribution business has been significantly accelerated by the COVID-19 pandemic and the reduction in the use of leaflets by readers and advertisers as a marketing vehicle,” said the company in a press release.

Torstar holds an investment in La Presse Canadienne through a joint agreement with affiliates of The Globe and Mail and La Presse de Montréal.