Wednesday, July 09, 2014

Future of News As Mobile Absorbs Ads

Projections over the next few years for spending by advertisers look rosy until you dig into the details.  The proportion spent on outdoor billboards, newspapers, radio, magazines, even TV, will continue to fall.

The increase is due to mobile, which will overtake radio, newspapers and magazines by the end of the year,

In desperation, outdoor billboards in third world countries are trying to pose as a means to provide water, even homeless shelters, a reminder of when that industry, already in disrepute, masqueraded as art galleries in the 1920s.

Weekly business journals across the country have resorted to producing frequent awards luncheons where they count attendance as a way to prop up severe declines in readership.  Some even claim to mask them from advertisers.

The practice also dilutes recognition earned from far more rigorous and scientific diagnostics.

Of course the sheer ubiquity of advertising long ago reduced its effectiveness into negative territory, well before every American was subjected to nearly 10,000 ads a day.

While some channels, roadside billboards for one, have or will soon be obsolete due to newer technology making them unsustainable compared to what they cost in desecration to the planet, consumption of news and information is at an all-time high.

Leading the way in transition from hard copy to digital are The Atlantic, the New York Times and Forbes.  Currently, the NYT has 50 times more readers on desktop and mobile than it does print.

In the U.S.A, Newspapers in print form are projected to become insignificant within the next four years but that doesn’t mean extinct.

For an excellent overview of the future of newspapers, I recommend this slide show by Dominique Delport, Global Managing Director of Havas Media Group.

Advertising revenue in daily newspapers is half of what it was just nine years ago at its peak, and that represents nearly 60% of all known advertising tied to daily newspaper journalism compared to 6% in weekly newspapers, 20% on local television and 4% on talk radio.

Compare that to audience revenue with 69% going to daily newspapers, 6% to weeklies, 2% to local television.  Non-commercial news pulls in 3% of industry-wide audience revenue.

Many businesses, particularly those in the business of providing new content, may be being held back by owners and governing boards according to my reading of a survey of executives and governing board members by McKinsey Global.

Two-thirds think that current investments are enough when it comes to innovation of new business or operating models, and that seems to have changed very little.  Only a fourth even rank that as a top priority, 6-in-10 even in the top three.

Under David Bradley’s ownership, The Atlantic took the opposite paths after he bought it in 1999, a decade after the Internet became commercially available.  It has gone from traffic of half a million over all of its platforms to more than 25 million.

He doubled the size of the writing staff since 2009.  It has made money since 2010, up 25% last year and then up again this year.  Atlantic has boldly moved to brand or re-brand spinoffs such as The Atlantic Cities, now Citylab, #2 among c-suite readers, and away from just print circulation and advertising to gain revenue.

The company has also gone aggressively into mobile and video and innovated new marketing techniques.  But it began by doubling the size of the writing staff while others chopped staff, cut sections, and hunkered down with dwindling ad revenues.

It can’t be easy owning or running a news outlet these days but the lesson for future sustainability is “content, content, content.”

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