No one plumbs the newspaper industry numbers (at least publicly) better than Alan Mutter. Unfortunately, what he consistently finds are trends that are not encouraging.
His latest post, Online ad share slips at papers, shows that while newspapers are taking a healthy share of online advertising revenues, their share of the overall pie isn’t growing as quickly as that of their competitors.
Notwithstanding sunny press releases from the Newspaper Association of America, the evidence is growing that the industry – which prominently and properly has targeted digital sales as a top strategic priority – is simply not keeping up with the universe of companies that sell online advertising.
Online is, by popular consensus, the eventual saviour of an industry that is seeing its advertising and circulation from traditional sources shrink. (The results of that are apparent almost weekly with headlines such as this: San Diego Union-Tribune aims to cut newsroom staff by 12%.) But if newspapers are not keeping pace with the overall growth of online advertising, the implications are significant.
The reality is that while the ‘net is (and will) attract tremendous amounts of advertising dollars, it also makes possible tremendous numbers of competitors for those dollars. Google and the like (nontraditional competitors) are slurping up big bucks and there are dozens of others that are sucking up smaller amounts.
Newspapers are still well in the game, with a share that’s over 20 per cent. But, writes Alan:
While it would be wrong to make too much of a single quarter’s sales slip, it is troubling to note that publishers collectively have under-performed their online peers for three quarters in a row in spite of an intense, high-profile effort to pump up their digital businesses. If the industry is going backwards while trying as hard as it can to move forward, it either isn’t trying hard enough or isn’t trying the right things.
NOTE: Alan has just written a second white paper, this one titled “Not your father’s Google: How the coming search revolution can help local media preserve their market dominance,” and was kind enough to send me a copy. I haven’t had a chance to read it yet. Stay tuned.
TAGS: NEWSPAPERS, BUSINESS, ADVERTISING, ONLINE
