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Over the past 18 months or so, it hasn't been hard to find people in the ad industry prepared to argue that The Guardian was fast becoming the biggest loser at the quality end of the newspaper market.

Its sales were under pressure across the whole of 2004 and it has lurched downward in the past four months. In the most recent Audit Bureau of Circulations figures, its headline figure fell more than 4 per cent to 372,562 and its full-rate sale was down to below 300,000 for the first time since 1978.

In comparison, its quality rivals have turned in solid performances, although The Independent's spectacular growth period following its compact launch now seems to have ended. Still, no-one was surprised when The Times followed suit.

It has been an expensive business but the two have been selling more newspapers - though it's true that neither The Times nor The Independent can feel proud of the way the transition was handled on the ad sales side.

Squabbles about new rate structures and mechanical definitions rumbled on for longer than was necessary.

Meanwhile, the market was not entirely surprised at the noises emanating from the Telegraph Group. It is far from illiterate when it comes to design issues, but a staunchly conservative line on the issue was not entirely unexpected from the custodian of a staunchly conservative brand.

In comparison, The Guardian seemed to be totally overtaken by events.

When it rejected a tabloid move in early 2004, critics speculated that internal self-esteem and morale had been badly damaged - especially given that, since the late 80s, The Guardian had prided itself on being the most savvy, design-conscious title in the newspaper market. It seemed to have lost control of the agenda.

In that context, The Guardian's later announcement that it was moving not to a tabloid format but to "Berliner" size seemed perverse, especially when it became apparent there were no available UK print plants able to handle the specified format.

How times change. This year, the ad industry has been buzzing about The Guardian's plans. The paper has been sharing its thoughts - and dummy ideas - with the advertising industry on a regular basis. The advertising industry likes what it has been hearing and seeing. The paper's print partners have been pushing ahead with the construction of new facilities and last week came the news that they will come on stream earlier than anticipated.

The Guardian's management seem certain to emerge triumphant, vindicated in their refusal to panic. First-mover advantage, it seems, is not always definitive.

1 The Berliner format, which at 315x470mm is midway between a tabloid and a broadsheet, is named after the first paper to adopt it. Perhaps ironically, the German market is more committed to broadsheets than any of its neighbours - only one German quality daily of note, Die Tageszeitung, now prints in Berliner.

2Other European countries have been far more enthusiastic in going Berliner over recent decades. Prominent examples include Le Monde in France, La Repubblica in Italy and La Vanguardia in Spain. It is certainly the format of choice for non-conformist journals.

3The theory is the Berliner size offers the best of both worlds: compact enough to be read on public transport, yet big enough to accommodate elegant designs. In a world heading rapidly tabloid, it's a way of joining the stampede yet staying aloof from it.

4The Guardian relaunch will now go ahead this autumn. The Observer title will also revamp in Berliner format, but this will not happen until 2006.

5The papers will transfer from their current Westferry print site to a new £50 million facility at Bow. It will be managed in partnership with the contract print specialist Newsfax. New machinery is also being installed at the Manchester-based Trafford Park Printers also used by the company.

6The new MAN Roland Colorman presses will make colour available on all pages of both papers across their entire print run. According to Stuart Taylor, the commercial director of Guardian Newspapers, this is of major interest to advertisers: "We're going from old presses to brand-new, out-of-the-box presses. In consultations, people have been excited by the potential of having colour throughout every section."

WHAT IT MEANS FOR ...

RIVAL NEWSPAPER GROUPS

- Times Newspapers and the Telegraph Group tend not to be overly concerned with anything The Guardian or The Observer get up to. They go fishing for readers in very different pools.

- The Independent may view this development with slightly more trepidation. The Independent has won sales from The Guardian in recent times - perhaps because of the way The Independent has been giving over its front pages to hard-hitting graphics on campaigning issues. The Independent will now be worried its gains could be wiped out at a stroke. It would face an extremely bleak future indeed if that were to happen.

ADVERTISERS

- Media agencies have been pleased about the lengths to which The Guardian has gone to keep them abreast of plans - and the two sides have been in prolonged discussions about trading ground rules and ad rates.

- The mistakes made by The Times and The Independent - they argued that a page was a page, no matter what its dimensions - will probably not be repeated.

- The potential for colour on every page will interest advertisers. It is true that the colour market is depressed, but it is expected to pick up this autumn and The Guardian could be well placed to soak up rapidly growing demand.