Report: Advertisers to spend more on digital media than print

8 03 2010 reports landmark findings from the annual Outsell advertising and marketing study today:

Of the $368 billion marketers plan to spend this year, 32.5% will go toward digital; 30.3% to print. Digital spending includes e-mail, video advertising, display ads and search marketing. “It’s a watershed moment,” says the study’s lead author, Outsell vice president Chuck Richard.

Study projects dramatic shift of ad spending to online sites

13 11 2009

In a study presented today at the Yale Law School Conference on the Future of Journalism, two leading analysts of media economics say there is a wide gap between the ratio of adults who get their content online and the amount of ad spending online, and that gap is about to close. The implication for legacy news providers is dire.

Today, U.S. advertisers spend 8 percent of budgets online, while Americans consumer 30 percent oftheir content online.

If history is any indication, a more appropriate re-allocation of advertising dollars will occur in the not-too-distant future, and daily print newspapers, with declining readership and household penetration, are mostly likely to be losers.

Over the next five years, the authors say, traditional news organization must take the following steps to survive:

  • Shed legacy costs as quickly as possible
  • Re-create community online — in an attempt to regain pricing leverage
  • Build new online advertising revenue streams to replace the loss of traditional print categories

The authors are Penelope Muse Abernathy, who holds the Knight Chair in Digital Media Economics and Journalism at the School of Journalism and Mass Communication at the University of North Carolina, and Richard Foster, a former McKinsey & Company executive who is a now senior faculty fellow at the School of Management at Yale.

Detroit Free Press maligns its name

3 11 2009

MK-AZ238_ADVERT_DV_20091101155135OK, times are tough, especially in Detroit. Newspapers are in a quandary trying to appeal to dwindling advertisers while their circulation plummets, and the lack of ad revenue impairs content, which further erodes circulation.

But the response of the Free Press may signal the final, swiftest circle around the drain.

According to the Wall Street Journal, the Freep has been pursuing stories suggested by advertisers, placing stories adjacent to related ad content, and timing stories to meet advertisers’ needs.

… By taking a story idea from an advertiser and, in some cases, placing specific stories in news sections when and where an advertiser requests them, the Free Press is offering them a more direct line to its news pages than is generally seen in the industry, where relationships with advertisers tend to be more arm’s length than at TV shows and magazines.

Sadly, the actions of the Freep aren’t aberrations but are part of a year-old strategy, one that may be catching on among newspapers.

The Free Press became part of a seminal shift in the newspaper industry a year ago when the Detroit Media Partnership, the venture that publishes it and the Detroit New as part of a joint operating agreemen, decided to shrink the paper and halt home delivery most days of the week. But that was just part of a broader reinvention that also included a new approach to advertisers in which the paper saw itself more as a business partner. …

Some newspaper executives say it is about time to change newspapers’ famously staunch ways and at least consider that ideas that come from advertisers aren’t inherently bad ones. “One of the things I think newsrooms have to realize,” [Paul Anger, editor and publisher of the Free Press] says, “is we’re here to cover the news in an unvarnished way, but we’re also here to facilitate commerce.”

Bully for Mr. Anger’s overt approach to selling out. But if that’s the direction he wants to take, and as long as he’s being honest about it, he might as well change the name of the paper to The Detroit Advertiser.