NEARLY three-quarters of U.S. newspaper executives responding to a recent survey said their ability to inform readers has diminished with their steadily shrinking staffs.
The survey conducted by the Associated Press Managing Editors illuminated the doubts and concerns hovering over newspapers as the industry reels from a slump that has been worsening since last fall.
The 20-question survey got responses from 351 editors and publishers. Although a few newspapers provided answers from more than one editor, the survey still offered an unusually large sampling.
APME surveys typically elicit a smattering of responses to very specific questions about a topic in the news. But this one clearly touched a nerve as it sought to find out how newspaper management is coping with a downturn that has wiped out $11.6 billion, or nearly one-fourth, of the industry's annual advertising revenue since 2005.
"These are the people out there on the front lines of this battle and they really don't know how it is going to turn out," said Bobbie Jo Buel, the APME's president and executive editor of the Arizona Daily Star in Tucson.
Seventy-one percent of the survey participants said cutbacks have "somewhat affected" or "greatly affected" the quality of their newspapers' coverage. Just 20 percent said their newspapers' staff reductions had little or no effect.
The comments accompanying the responses were filled with resignation, frustration, anger, despair, confusion and even some gallows humor that reflected the depressed state of the U.S. economy as more people lose their homes because they can't afford their mortgages.
"Our newspaper's biggest revenue source today is foreclosure notices," wrote Clifford Buchan, editor of the Forest Lake Times, a free weekly newspaper in Minnesota. "We have uncertainty once that run ends, as it most surely will."
To cope with the hard times, 65 percent of the survey respondents said they have laid off workers since January 2008. Nearly 30 percent said they have lowered wages.
Total employment in the newspaper industry averaged 407,000 people during 2008, a 20 percent decline from 508,000 in 2005, according to the Bureau of Labor Statistics. Newspapers have eliminated thousands more jobs so far this year.
Now editors are worried they won't have the adequate resources and skills to keep newspapers relevant as more readers turn to the Internet for information.
Nearly 68 percent of the respondents cited staffing shortages as the chief impediment to change; more than 57 percent said they didn't have enough money to innovate. Thirty-one percent said their personnel didn't have the skills to change with the times.
"It's not worth complaining about having too few people because the staffing status quo of two years ago isn't coming back," wrote Jeff Gauger, executive editor of The Repository, a daily newspaper in Canton, Ohio, with a circulation of about 65,000.
Newspapers have been shrinking, largely because their audiences and advertisers have been defecting to the Web. The U.S. recession that began in December 2007 has accelerated the slide in ad revenue and may also be contributing to a circulation drop as more households try to save money.
Many editors seem to be having second thoughts about the industry's practice of giving away stories and photos on their Web sites. Twenty-eight percent of the respondents said they plan to charge for online content. About 20 percent said they will offer some coverage exclusively in their print editions to reward their paying customers.
With so much information readily available online for free, more newspapers are concentrating coverage on community issues unlikely to attract the attention of other media outlets. Nearly 40 percent of the respondents said they are devoting more space to "hyper-local" news while decreasing the pages devoted to national and international stories.
Despite the challenges facing newspapers, 72 percent of the survey's participants said they are staying in the industry because they believe in "the mission of journalism." Just 6 percent said they were sticking it out because the pay was too good to give up.
Fifty-nine percent of the respondents predicted their publications will find ways to be profitable. But nearly 17 percent said they're worried their newspapers will die.
While most newspapers seem to be trying different ways to engage readers and drum up revenue, 25 percent of the respondents said their publications are mostly "hunkering down" until the economy recovers.
"We're all in this together," wrote Steve Bagwell, managing editor of the News-Register, a newspaper in McMinnville, Ore. "All oars are pulling in the same direction."
To bolster staff morale, many survey respondents said they are going out of their way to praise outstanding work and occasionally serving free lunches or snacks.
Other editors are reminding their reporters and photographers that they are fortunate to still have their jobs after so many of their colleagues have been ushered out the door.
"Aren't we lucky to continue doing what we love while others are forced to leave the industry?" wrote Eric Petermann, managing editor of The Journal-Standard, a newspaper in Freeport, Ill., with a circulation of about 11,500. "This is gut-check time. Our `new reality' is a time of separation. Love what you are doing, and be the best, or find a job as a PR flack."
Source: apme.com
Showing posts with label revenue. Show all posts
Showing posts with label revenue. Show all posts
Sunday, May 17, 2009
Thursday, May 14, 2009
Papers pushing video ads as new revenue stream
AS newspapers add video to their newsrooms, several publishers are tapping into that foundation by offering advertisers video production services.
Shaw Suburban Media, for example, expects its 21-month-old ShawVideoWorks production unit to generate more than $140,000 in revenues this year — double its 2008 contribution — according to J. Tom Shaw, vice president of advertising.
Shaw owns about 45 publications in Illinois and Iowa.
Shaw said the types of local businesses using SVW runs the gamut from auto dealers and fitness facilities to commercial builders and restaurants.
Shaw Suburban Media, for example, expects its 21-month-old ShawVideoWorks production unit to generate more than $140,000 in revenues this year — double its 2008 contribution — according to J. Tom Shaw, vice president of advertising.
Shaw owns about 45 publications in Illinois and Iowa.
Shaw said the types of local businesses using SVW runs the gamut from auto dealers and fitness facilities to commercial builders and restaurants.
In addition to commercials, Shaw provides music and computer graphics services.
Cost effective
And the price is right, Shaw said. SVW charges about $2,000 for its package of video business profiles, about a third of what competitors charge.
"We know how to edit, frame the commercials and we know how to make someone feel comfortable in front of the camera," he said. "We make it affordable so if mom and pop want to put a video on their Web site they can do it.
The production unit produces HD-quality long-form videos that range from commercials to video business profiles.
Other services include music and advanced computer graphics. Shaw will even make DVD copies of the video for distribution.
SVW is housed at Shaw's Northwest Herald in Crystal Lake, Ill. Shaw equipped the studio with a high-end HD camera, green screen and associated video editing equipment and software.
The ShawVideoVorks studio houses equipment for editorial and commercial production.
Standard turnaround time from start to finish is four to six weeks, from contract signing to delivery of the finished product.
"We've been able to get in and explain to our advertisers how video would be helpful for their marketing strategies," Shaw said about SVW. "If you're a local business and have a Web site you can use a video because it enhances your online effectiveness."
Shaw said that, overall, traffic has been growing exponentially for the newspaper group's sites.
"Local newspaper sites have the highest Web traffic in their markets so we have both news and ad space on our sites," he said. "And video ads are an effective way of using that ad space."
Branching out employment videos
Meantime, The Journal News in White Plains, N.Y., is making strides in its 10-month-old quest to offer video employment ads, said Brenda Grover, advertising director for classifieds.
Businesses using SVW include auto dealers and gyms.
The paper (daily, 99,971; Sunday, 121,754) is working with online video service company Reel Centric to create and showcase recruitment videos on its CareerBuilder page.
"We wanted to build a continuing connection between our print ads, CareerBuilder job packs and online video," Grover said. "And since the time we launched it we've seen a 43 percent increase in year-over-year sales."
She said the newspaper collects the ad material, sends it to Reel Centric and in about 48 hours the video is ready to be posted.
The video ads contain stock photographs, graphic elements and scripts designed to differentiate among companies searching for the same type of employee — say administrative assistants.
Grover said the videos attract a lot of interest, with each one averaging around 30,000 views in the first quarter this year.
The newspaper is also looking at putting together a strategy to offer video services for the real estate section sometime in the near future.
"We started in the recruitment vertical and can look to build out in different areas, whether it's specific to a special section or for real estate," she said.
Source: newsandtech.com
Wednesday, April 15, 2009
Newspaper ad revenue may plunge 22 percent
U.S. newspaper advertising revenue may plunge 22 percent this year as demand falls, forcing more publications out of business, a Barclays Capital analyst said.
Industrywide newspaper ad revenue will probably drop to $27.1 billion from $34.7 billion last year, including a decline of as much as 25 percent in the first half, Craig Huber of Barclays in New York said today in a research report.
"Over the next three years, a number of daily newspapers in the United States will be shut down given the various pressures on the business," said Huber. "Newspapers are in their worst competitive position in decades, if not ever, to raise advertising rates or even to try to keep them flat."
Five newspaper publishers have sought bankruptcy protection since December, including Chicago's Sun-Times Media Group Inc. yesterday, as readers migrate to the Web, where ad rates are lower. Publishers are halting print editions, firing people and selling assets to cope with plummeting revenue.
Classified sales will drop 35 percent, the biggest decline in any major ad category, followed by a 23 percent plunge in national ads, Huber estimated. Local retail advertising, which accounts for more than half of newspaper revenue, may fall 14 percent, he projected. He also predicted newspapers share of the ad market will fall to 11 percent this year from 12 percent.
Source: Daily Herald
Industrywide newspaper ad revenue will probably drop to $27.1 billion from $34.7 billion last year, including a decline of as much as 25 percent in the first half, Craig Huber of Barclays in New York said today in a research report.
"Over the next three years, a number of daily newspapers in the United States will be shut down given the various pressures on the business," said Huber. "Newspapers are in their worst competitive position in decades, if not ever, to raise advertising rates or even to try to keep them flat."
Five newspaper publishers have sought bankruptcy protection since December, including Chicago's Sun-Times Media Group Inc. yesterday, as readers migrate to the Web, where ad rates are lower. Publishers are halting print editions, firing people and selling assets to cope with plummeting revenue.
Classified sales will drop 35 percent, the biggest decline in any major ad category, followed by a 23 percent plunge in national ads, Huber estimated. Local retail advertising, which accounts for more than half of newspaper revenue, may fall 14 percent, he projected. He also predicted newspapers share of the ad market will fall to 11 percent this year from 12 percent.
Source: Daily Herald
Tuesday, March 3, 2009
Newspapers: From No Profit to Non-Profits?
NEW YORK: As sharp revenue reductions put the future of many U.S. newspapers in doubt, one idea gaining attention is the conversion of newspapers into tax-exempt nonprofits supported by large endowments.
Although viewed by many as a long shot at best, such a radical change could be a savior for the industry and its vital role in a democracy.
That's why the endowment model is drawing renewed attention as newspapers impose massive layoffs, scale back home delivery and make other drastic cuts to counter plunging advertising revenue amid a recession that has compounded struggles from the migration of readers to the Internet.
David Swensen, who managed one of the world's largest endowments as chief investment officer at Yale University, said endowments "would enhance newspapers' autonomy while shielding them from the economic forces that are now tearing them down."
"By endowing our most valued sources of news we would free them from the strictures of an obsolete business model and offer them a permanent place in society, like that of America's colleges and universities," he wrote in a recent opinion piece in The New York Times.
But first, the idea must overcome skepticism from the very newspapers that stand to benefit. Critics say endowments also could beholden newspapers to their large donors, and giving newspapers tax-exempt status could restrict them from endorsing candidates and running editorials on pending legislation.
On a more practical level, skeptics question whether the millions and millions of dollars needed to create such endowments could be raised during the worst recession in decades.
Four newspaper companies, including the owners of the Los Angeles Times, Chicago Tribune, The Philadelphia Inquirer and the New Haven Register, sought Chapter 11 bankruptcy protection in recent months, while the Rocky Mountain News published its last edition Friday. Newspapers in Seattle and Tucson, Ariz., are threatened with closure if buyers aren't found, and the San Francisco Chronicle also faces closure or sale if it can't slash expenses.
Newspapers are having to rethink every aspect of their operations, including their for-profit existence, given their inability to generate enough revenue from their Web sites to offset the losses in print.
More nonprofits aimed at boosting investigative journalism are entering the field, including ProPublica and ventures started in the past few weeks at Boston University and the University of Wisconsin.
In 2007, recent casualties of newspaper downsizing in Minnesota formed Minnpost.com with $850,000 donated by four families. The nonprofit also attracted support from more than 900 member donors and various foundations, including the John S. and James L. Knight Foundation headed by the former publisher of The Miami Herald.
Minnpost's mission: to produce the substantive local journalism its creators say has been on the decline because of industry cost-cutting.
But those projects are relatively small, and endowments are rare.
National Public Radio, whose endowment received a major gift of $194 million from Joan B. Kroc in 2004, relies primarily on funding from member stations and corporate sponsors. Income from its endowment will generate just 6 percent of funds this fiscal year.
Creating an endowment to sustain an entire newspaper's operations will be tougher.
While welcoming Swensen's proposal, Alberto Ibarguen, president of the John S. and James L. Knight Foundation and former publisher of the Miami Herald, said obstacles include persuading shareholders to sell and foundations to invest in a shrinking business.
Newspapers, and their bankers, would need to offer a fair price to shareholders or face rejection or lawsuits, said Rick Edmonds, media business analyst at the Poynter Institute, a nonprofit journalism organization funded through profits from the St. Petersburg Times in Florida, which itself is facing the same woes that its corporate counterparts are.
Joel Kramer, editor of Minnpost.com, said that without enough philanthropy money available to endow a significant number of newspapers, a better approach would be to support innovators and startups such as Minnpost.
GlobalPost, a startup aimed at boosting international reporting, initially tried to raise money as a nonprofit, but potential donors wanted a way to quantify the impact of the reporting and grant applications would have been time-consuming, said Charles Sennott, executive editor and co-founder. GlobalPost ultimately chose the for-profit model and raised more than $8 million from individual investors.
Nonetheless, advocates of the endowment model say newspapers have unique assets that play an important role in public service, even if they do little for the bottom line.
Major news organizations spend millions of dollars to provide coverage from dangerous and remote places around the world — resources no blogger or casual journalist can match. But because of cost pressures, many newspapers including The Sun of Baltimore, the Boston Globe and The Philadelphia Inquirer have closed their foreign bureaus.
Newspapers also have been able to devote fewer resources to the type of investigative projects that exposed the Watergate scandal and the Pentagon Papers, which chronicled America's secret involvement in Vietnam.
An endowment might not help preserve a newspaper's printed edition, but could save core, expensive functions such as investigative reporting and foreign correspondents as newspapers transition to the Internet, said Steven Coll, former managing editor of The Washington Post and now president of the New America Foundation think tank.
"I do think one of the big papers is going to do this eventually," Coll said. "Whoever does it first is going to have an advantage."
Edmonds said the other efforts to cut costs and boost revenue might work to some extent, especially after the recession ends, but they don't add up to a stable business model.
Before endowment advocates can succeed, though, they'll have to sway newspaper executives who believe the for-profit model still works.
"I think we're far from having to push the panic button," said Randy Bennett, senior vice president business development at the Newspaper Association of America.
Saying he was not aware of any newspapers pursuing an endowment, Bennett rejected the notion that the business model is no longer profitable and noted that newspapers haven't exhausted initiatives to increase revenue.
Several newspaper executives this month launched a public-relations campaign to counter what they call "gloom-and-doom" reports of the industry's demise.
Bill Keller, executive editor of The New York Times, said in an online exchange with readers recently that the not-for-profit model has serious downsides, including conditions placed by funders. He added that endowments are no insulation against economic hard times.
Consider the St. Petersburg Times, which has no endowment but is owned by a nonprofit group, Poynter. The newspaper has had to trim newsroom staff to about 300, down from 430 at the end of the 1990s. Another Poynter unit, Congressional Quarterly Inc., is up for sale.
Swensen, who declined to comment beyond his column in the Times, estimates a large newspaper such as the Times would need a $5 billion endowment, assuming a 5 percent annual payout from the fund, to support annual costs of $200 million. Smaller papers would need less.
He acknowledges that only a handful of foundations and wealthy individuals have the money required for such endowments.
"Enlightened philanthropists must act now or watch a vital component of American democracy fade into irrelevance," Swensen wrote.
Coll appealed to billionaires Warren Buffett and Bill Gates for help.
"If you'll just put up the first billion," he wrote in an article in The New Yorker, "the rest of us promise to get busy helping to raise the rest."
Buffett gave part of his fortune in 2006 to the Bill and Melinda Gates Foundation, which has no plans to consider endowing major newspapers, a foundation spokeswoman said.
In a statement, the Council on Foundations said that although there is "some appetite from foundations to help ... the vehicle still needs to be determined."
Charles Lewis, who started the nonprofit investigative journalism organization Center for Public Integrity two decades ago, said the future of good journalism could ride on whether "the philanthropic community step up and embrace this civic moment and crisis and try to solve it. This is a failure of the market. The market can no longer support news substantially."
Source: AP
Although viewed by many as a long shot at best, such a radical change could be a savior for the industry and its vital role in a democracy.
That's why the endowment model is drawing renewed attention as newspapers impose massive layoffs, scale back home delivery and make other drastic cuts to counter plunging advertising revenue amid a recession that has compounded struggles from the migration of readers to the Internet.
David Swensen, who managed one of the world's largest endowments as chief investment officer at Yale University, said endowments "would enhance newspapers' autonomy while shielding them from the economic forces that are now tearing them down."
"By endowing our most valued sources of news we would free them from the strictures of an obsolete business model and offer them a permanent place in society, like that of America's colleges and universities," he wrote in a recent opinion piece in The New York Times.
But first, the idea must overcome skepticism from the very newspapers that stand to benefit. Critics say endowments also could beholden newspapers to their large donors, and giving newspapers tax-exempt status could restrict them from endorsing candidates and running editorials on pending legislation.
On a more practical level, skeptics question whether the millions and millions of dollars needed to create such endowments could be raised during the worst recession in decades.
Four newspaper companies, including the owners of the Los Angeles Times, Chicago Tribune, The Philadelphia Inquirer and the New Haven Register, sought Chapter 11 bankruptcy protection in recent months, while the Rocky Mountain News published its last edition Friday. Newspapers in Seattle and Tucson, Ariz., are threatened with closure if buyers aren't found, and the San Francisco Chronicle also faces closure or sale if it can't slash expenses.
Newspapers are having to rethink every aspect of their operations, including their for-profit existence, given their inability to generate enough revenue from their Web sites to offset the losses in print.
More nonprofits aimed at boosting investigative journalism are entering the field, including ProPublica and ventures started in the past few weeks at Boston University and the University of Wisconsin.
In 2007, recent casualties of newspaper downsizing in Minnesota formed Minnpost.com with $850,000 donated by four families. The nonprofit also attracted support from more than 900 member donors and various foundations, including the John S. and James L. Knight Foundation headed by the former publisher of The Miami Herald.
Minnpost's mission: to produce the substantive local journalism its creators say has been on the decline because of industry cost-cutting.
But those projects are relatively small, and endowments are rare.
National Public Radio, whose endowment received a major gift of $194 million from Joan B. Kroc in 2004, relies primarily on funding from member stations and corporate sponsors. Income from its endowment will generate just 6 percent of funds this fiscal year.
Creating an endowment to sustain an entire newspaper's operations will be tougher.
While welcoming Swensen's proposal, Alberto Ibarguen, president of the John S. and James L. Knight Foundation and former publisher of the Miami Herald, said obstacles include persuading shareholders to sell and foundations to invest in a shrinking business.
Newspapers, and their bankers, would need to offer a fair price to shareholders or face rejection or lawsuits, said Rick Edmonds, media business analyst at the Poynter Institute, a nonprofit journalism organization funded through profits from the St. Petersburg Times in Florida, which itself is facing the same woes that its corporate counterparts are.
Joel Kramer, editor of Minnpost.com, said that without enough philanthropy money available to endow a significant number of newspapers, a better approach would be to support innovators and startups such as Minnpost.
GlobalPost, a startup aimed at boosting international reporting, initially tried to raise money as a nonprofit, but potential donors wanted a way to quantify the impact of the reporting and grant applications would have been time-consuming, said Charles Sennott, executive editor and co-founder. GlobalPost ultimately chose the for-profit model and raised more than $8 million from individual investors.
Nonetheless, advocates of the endowment model say newspapers have unique assets that play an important role in public service, even if they do little for the bottom line.
Major news organizations spend millions of dollars to provide coverage from dangerous and remote places around the world — resources no blogger or casual journalist can match. But because of cost pressures, many newspapers including The Sun of Baltimore, the Boston Globe and The Philadelphia Inquirer have closed their foreign bureaus.
Newspapers also have been able to devote fewer resources to the type of investigative projects that exposed the Watergate scandal and the Pentagon Papers, which chronicled America's secret involvement in Vietnam.
An endowment might not help preserve a newspaper's printed edition, but could save core, expensive functions such as investigative reporting and foreign correspondents as newspapers transition to the Internet, said Steven Coll, former managing editor of The Washington Post and now president of the New America Foundation think tank.
"I do think one of the big papers is going to do this eventually," Coll said. "Whoever does it first is going to have an advantage."
Edmonds said the other efforts to cut costs and boost revenue might work to some extent, especially after the recession ends, but they don't add up to a stable business model.
Before endowment advocates can succeed, though, they'll have to sway newspaper executives who believe the for-profit model still works.
"I think we're far from having to push the panic button," said Randy Bennett, senior vice president business development at the Newspaper Association of America.
Saying he was not aware of any newspapers pursuing an endowment, Bennett rejected the notion that the business model is no longer profitable and noted that newspapers haven't exhausted initiatives to increase revenue.
Several newspaper executives this month launched a public-relations campaign to counter what they call "gloom-and-doom" reports of the industry's demise.
Bill Keller, executive editor of The New York Times, said in an online exchange with readers recently that the not-for-profit model has serious downsides, including conditions placed by funders. He added that endowments are no insulation against economic hard times.
Consider the St. Petersburg Times, which has no endowment but is owned by a nonprofit group, Poynter. The newspaper has had to trim newsroom staff to about 300, down from 430 at the end of the 1990s. Another Poynter unit, Congressional Quarterly Inc., is up for sale.
Swensen, who declined to comment beyond his column in the Times, estimates a large newspaper such as the Times would need a $5 billion endowment, assuming a 5 percent annual payout from the fund, to support annual costs of $200 million. Smaller papers would need less.
He acknowledges that only a handful of foundations and wealthy individuals have the money required for such endowments.
"Enlightened philanthropists must act now or watch a vital component of American democracy fade into irrelevance," Swensen wrote.
Coll appealed to billionaires Warren Buffett and Bill Gates for help.
"If you'll just put up the first billion," he wrote in an article in The New Yorker, "the rest of us promise to get busy helping to raise the rest."
Buffett gave part of his fortune in 2006 to the Bill and Melinda Gates Foundation, which has no plans to consider endowing major newspapers, a foundation spokeswoman said.
In a statement, the Council on Foundations said that although there is "some appetite from foundations to help ... the vehicle still needs to be determined."
Charles Lewis, who started the nonprofit investigative journalism organization Center for Public Integrity two decades ago, said the future of good journalism could ride on whether "the philanthropic community step up and embrace this civic moment and crisis and try to solve it. This is a failure of the market. The market can no longer support news substantially."
Source: AP
Tuesday, February 10, 2009
Online ad spend set to slow 'significantly' over next five years
The growth of online advertising is set to slow "significantly" over the next five years, according to Forrester Research, forcing the company to revise its forecasts for European advertising spend.
Internet spend throughout Europe, which until 2007 has been increasing as much as 30% a year, is set to rise by just 10% in 2009 due to a maturing market and the current recession, according to the European Online Advertising Through 2013 report.
Two years ago, Forrester predicted online ad spend would increase by 14% this year. The company has also lowered its forecasts for annual growth rates in 2010 and 2011.
Over the next five years, the market is now expected to increase at a compound annual rate of 9%, to €14.8bn in 2013.
Search marketing is expected to continue to fare best while display will be hardest hit during the recession, a shift in spending that will only accelerate due to more constraints being put on interactive marketing budgets.
The European online display ad market suffered during the last recession — falling from €886 million in 2001 to €862 million 2002 — while paid search spending nearly doubled during the same period.
Advertisers have told Forrester that once again they expect to cut more spending on display ads than other formats this time too.
However, display advertising is in a better position than it was in 2002, according to Forrester. Now a greater percentage of display spend is dedicated to direct response marketing, and ad prices are not as inflated as they were in the years leading up to 2002.
As a result, the research specialist expects display spend to grow throughout the forecast period — by 4% in 2009 to 10% in 2013.
Emerging revenue streams such as online video advertising and other rich media are also expected to account for nearly 60% of online ad spend by 2013.
Although small early-adopter nations such as the Netherlands and the Nordic countries have seen online ad spend increase quickly in recent years, the three largest markets in Western Europe - France, Germany, and the UK - still dominate and account for 66% of online ad spending in Europe.
The UK alone accounts for nearly one-third of all online ad spending in Europe. This dominance is set to continue, according to Forrester, with all three seeing "significantly higher than average" share of their markets' overall ad spend shifting online.
Nate Elliott, an analyst at Forrester and author of the study, said that despite the slow down, there were still reasons for optimism as online ad spend is tipped to increase its share of total advertising market.
"Just as search’s relatively high conversion rates and accountability will help it outperform other forms of online advertising in a bad market, the largely direct response nature of internet advertising generally will help it to further outperform offline ad channels during the recession," she said.
"We had previously forecasted that online ad spend would account for 12.6% of all European advertising in 2012; thanks to the recession, we’ve increased that forecast to 14.8%."
Source: MediaWeek
Internet spend throughout Europe, which until 2007 has been increasing as much as 30% a year, is set to rise by just 10% in 2009 due to a maturing market and the current recession, according to the European Online Advertising Through 2013 report.
Two years ago, Forrester predicted online ad spend would increase by 14% this year. The company has also lowered its forecasts for annual growth rates in 2010 and 2011.
Over the next five years, the market is now expected to increase at a compound annual rate of 9%, to €14.8bn in 2013.
Search marketing is expected to continue to fare best while display will be hardest hit during the recession, a shift in spending that will only accelerate due to more constraints being put on interactive marketing budgets.
The European online display ad market suffered during the last recession — falling from €886 million in 2001 to €862 million 2002 — while paid search spending nearly doubled during the same period.
Advertisers have told Forrester that once again they expect to cut more spending on display ads than other formats this time too.
However, display advertising is in a better position than it was in 2002, according to Forrester. Now a greater percentage of display spend is dedicated to direct response marketing, and ad prices are not as inflated as they were in the years leading up to 2002.
As a result, the research specialist expects display spend to grow throughout the forecast period — by 4% in 2009 to 10% in 2013.
Emerging revenue streams such as online video advertising and other rich media are also expected to account for nearly 60% of online ad spend by 2013.
Although small early-adopter nations such as the Netherlands and the Nordic countries have seen online ad spend increase quickly in recent years, the three largest markets in Western Europe - France, Germany, and the UK - still dominate and account for 66% of online ad spending in Europe.
The UK alone accounts for nearly one-third of all online ad spending in Europe. This dominance is set to continue, according to Forrester, with all three seeing "significantly higher than average" share of their markets' overall ad spend shifting online.
Nate Elliott, an analyst at Forrester and author of the study, said that despite the slow down, there were still reasons for optimism as online ad spend is tipped to increase its share of total advertising market.
"Just as search’s relatively high conversion rates and accountability will help it outperform other forms of online advertising in a bad market, the largely direct response nature of internet advertising generally will help it to further outperform offline ad channels during the recession," she said.
"We had previously forecasted that online ad spend would account for 12.6% of all European advertising in 2012; thanks to the recession, we’ve increased that forecast to 14.8%."
Source: MediaWeek
Despite the apocalypse, newspapers will refuse to die
As today's ABC figures show another decline in newspaper circulation, former Trinity Mirror executive Richard Webb argues that many will find ways to survive
IT is said that that cockroaches can survive a nuclear holocaust. While newspapers are facing the worst financial crisis in living memory, they too, are survivors and I wouldn't be surprised if many find ways to survive this trial.
Yes, their circulation revenues are under the cosh from declining sales and now advertising is suffering too. As profits plummet, the outlook is not good. Logic suggests we will soon be seeing multiple closures.
But the key to newspapers' survival is their unusual makeup: their value to society; the curious nature of their ownership; their potential for greater efficiency; their sheer ingenuity and resourcefulness; and the fact that many readers are still committed to them – according to the National Readership Survey the average time spent reading even the popular tabloids is about 40 minutes.
The intrinsic value of newspapers is helping the public understand the news. Breaking stories is, largely, a thing of the past for newspapers. Investigations, comment and opinion are their strengths. Driven by the desire to unearth controversy, free to be partisan, but checked by the need to maintain their credibility and reputations, they stretch debate and make an unparallelled contribution to our understanding of events and their importance. Newspapers still take a lead role in setting the daily news agenda for television, radio and the web. The world would certainly be a substantially less interesting and informed place without them.
The majority of owners understand this. Newspapers, generally, do not exist purely to turn a profit. Most are profitable, but a few operate permanently at a loss, such as the Evening Standard, which was bankrolled by a bigger group that has now cut its losses and sold it to a wealthy foreign proprietor. And we forget how recently newspapers became really profitable. Prior to Murdoch's coup at Wapping in 1986, life was much harder. A fraction of their current size, dominated by the print unions and often inefficient, many operated at or below break even. The proprietorial approach that kept them alive in those difficult times has not vanished completely.
It is clear that extreme profitability and durability are unhappy bedfellows. It is not surprising that the papers that deliver the highest margins generally tend to be the ones that suffer the biggest circulation declines. These are the most vulnerable and the likely candidates for extinction.
The Daily Express is an example of a paper being driven into the ground purely for profit. Its news content is similar to the freesheets – radio news on paper. What is surprising is not that it is losing readers as quickly as it is, but that it is not losing them faster. The paper has been so denuded of quality content that its eventual closure is a racing certainty. But perhaps out of habit or loyalty or because they still like it – whatever the reason – its circulation is eroding surprisingly slowly.
Papers are changing and two things are important to adapting to the new order: understanding what content is important and what is old hat and having the conviction to make big changes; and developing lower-cost models that allow them to survive the decline in income.
Recently, Private Eye gleefully told of a Daily Telegraph journalist who made a scathing attack on the editor and senior management. Reading it, I was nearly persuaded that the once great paper was turning into the quality equivalent of the Express. So I bought a copy. I was pleasantly surprised. A few of the big name columnists had gone, but it was a good read, the story count was higher than I had expected and the business section included one the best analyses of the financial crisis I have seen.
Right now the web is disrupting newspapers' traditional business model, providing the content without the cover price and yielding only a relative pittance of ad revenue so far. But newspapers have no choice but to publish online if they are to retain their profile, traffic and ad revenues. According to the Newspaper Marketing Agency, the time spent looking at the web versions of British national newspapers exceeds 700m minutes a month, putting them, collectively, in the top 10 most viewed sites, alongside the Google, eBay and Facebook.
With this kind of performance there is a future.
Source: Guardian.co.uk
IT is said that that cockroaches can survive a nuclear holocaust. While newspapers are facing the worst financial crisis in living memory, they too, are survivors and I wouldn't be surprised if many find ways to survive this trial.
Yes, their circulation revenues are under the cosh from declining sales and now advertising is suffering too. As profits plummet, the outlook is not good. Logic suggests we will soon be seeing multiple closures.
But the key to newspapers' survival is their unusual makeup: their value to society; the curious nature of their ownership; their potential for greater efficiency; their sheer ingenuity and resourcefulness; and the fact that many readers are still committed to them – according to the National Readership Survey the average time spent reading even the popular tabloids is about 40 minutes.
The intrinsic value of newspapers is helping the public understand the news. Breaking stories is, largely, a thing of the past for newspapers. Investigations, comment and opinion are their strengths. Driven by the desire to unearth controversy, free to be partisan, but checked by the need to maintain their credibility and reputations, they stretch debate and make an unparallelled contribution to our understanding of events and their importance. Newspapers still take a lead role in setting the daily news agenda for television, radio and the web. The world would certainly be a substantially less interesting and informed place without them.
The majority of owners understand this. Newspapers, generally, do not exist purely to turn a profit. Most are profitable, but a few operate permanently at a loss, such as the Evening Standard, which was bankrolled by a bigger group that has now cut its losses and sold it to a wealthy foreign proprietor. And we forget how recently newspapers became really profitable. Prior to Murdoch's coup at Wapping in 1986, life was much harder. A fraction of their current size, dominated by the print unions and often inefficient, many operated at or below break even. The proprietorial approach that kept them alive in those difficult times has not vanished completely.
It is clear that extreme profitability and durability are unhappy bedfellows. It is not surprising that the papers that deliver the highest margins generally tend to be the ones that suffer the biggest circulation declines. These are the most vulnerable and the likely candidates for extinction.
The Daily Express is an example of a paper being driven into the ground purely for profit. Its news content is similar to the freesheets – radio news on paper. What is surprising is not that it is losing readers as quickly as it is, but that it is not losing them faster. The paper has been so denuded of quality content that its eventual closure is a racing certainty. But perhaps out of habit or loyalty or because they still like it – whatever the reason – its circulation is eroding surprisingly slowly.
Papers are changing and two things are important to adapting to the new order: understanding what content is important and what is old hat and having the conviction to make big changes; and developing lower-cost models that allow them to survive the decline in income.
Recently, Private Eye gleefully told of a Daily Telegraph journalist who made a scathing attack on the editor and senior management. Reading it, I was nearly persuaded that the once great paper was turning into the quality equivalent of the Express. So I bought a copy. I was pleasantly surprised. A few of the big name columnists had gone, but it was a good read, the story count was higher than I had expected and the business section included one the best analyses of the financial crisis I have seen.
Right now the web is disrupting newspapers' traditional business model, providing the content without the cover price and yielding only a relative pittance of ad revenue so far. But newspapers have no choice but to publish online if they are to retain their profile, traffic and ad revenues. According to the Newspaper Marketing Agency, the time spent looking at the web versions of British national newspapers exceeds 700m minutes a month, putting them, collectively, in the top 10 most viewed sites, alongside the Google, eBay and Facebook.
With this kind of performance there is a future.
Source: Guardian.co.uk
Newspapers not dead yet, says Murdoch
RUPERT MURDOCH has delivered a sobering assessment about the internet as a growth engine, revealing search and advertising revenues at News Corp's Fox Interactive Media division - which houses the popular MySpace networking site - have stalled.
The new-media unit, which has invested heavily to expand MySpace, contributed just $US7 million ($10.4 million) to News Corp's $US818 million second-quarter operating income, the company said on Friday.
There was a "slight downturn" in revenue at the social networking site, Mr Murdoch said. That compares to $US179 million News Corp made from newspapers including The Wall Street Journal and information services such as the Dow Jones news wire.
Asked about his views on the long-term viability of the internet, Mr Murdoch said generating a return on investment for assets such as MySpace, which News Corp bought for $US580 million in 2005, was still a challenge.
"I think we have to find new ways to monetise our huge audiences," he told analysts. Websites reaching very specific target groups showed solid revenue increases, with the Journal's site on track to book $US120 million in advertising this year. Search sites were also doing well.
"But overall, you have a problem in that there is an almost infinite increase in inventory for websites and for display [advertising]," he said. "There is constant downward pressure on the rates you could get."
Providing more data and collecting information about web users to more effectively sell them to advertisers would be "increasingly important", Mr Murdoch said.
MySpace already uses information that members put in their profiles to target them with specific ads, which he said was showing "very promising returns".
With profits from the internet in single digits, Mr Murdoch hinted reports of the demise of newspapers were premature. That is despite hefty write-downs in the value of his papers and TV licences which resulted in News Corp's $US6.4 billion quarterly loss. "I am extremely happy with all of our newspapers," the media mogul said. "There has never been a greater appetite for news in the community. And we will be able to capitalise on that pretty well."
Newspapers have come under pressure as the global downturn has accelerated a move of high-yielding advertising to the internet. Like many of its peers, News Corp has started cutting jobs at its newspapers in Australia and offshore.
But Mr Murdoch, who copped heavy criticism for buying the Journal's parent company, Dow Jones, for $US5.6 billion in 2007, said he remained a firm believer in newspapers, television and film as mass media.
"Quite simply, as long as advertisers need to move product and sell brands, these industries will remain strong" he said. "I have got great faith and if we continue the way we are going, we may even get lucky by not having so much competition at the end of it all."
But he ruled out further print acquisitions for now. Asked about reports he was eyeing The New York Times, Mr Murdoch said that he wasn't interested.
"Apart from the German pay TV business Premiere, "I have looked around and I really haven't seen any businesses that I really want to buy", he said.
Source: smh.com.au
The new-media unit, which has invested heavily to expand MySpace, contributed just $US7 million ($10.4 million) to News Corp's $US818 million second-quarter operating income, the company said on Friday.
There was a "slight downturn" in revenue at the social networking site, Mr Murdoch said. That compares to $US179 million News Corp made from newspapers including The Wall Street Journal and information services such as the Dow Jones news wire.
Asked about his views on the long-term viability of the internet, Mr Murdoch said generating a return on investment for assets such as MySpace, which News Corp bought for $US580 million in 2005, was still a challenge.
"I think we have to find new ways to monetise our huge audiences," he told analysts. Websites reaching very specific target groups showed solid revenue increases, with the Journal's site on track to book $US120 million in advertising this year. Search sites were also doing well.
"But overall, you have a problem in that there is an almost infinite increase in inventory for websites and for display [advertising]," he said. "There is constant downward pressure on the rates you could get."
Providing more data and collecting information about web users to more effectively sell them to advertisers would be "increasingly important", Mr Murdoch said.
MySpace already uses information that members put in their profiles to target them with specific ads, which he said was showing "very promising returns".
With profits from the internet in single digits, Mr Murdoch hinted reports of the demise of newspapers were premature. That is despite hefty write-downs in the value of his papers and TV licences which resulted in News Corp's $US6.4 billion quarterly loss. "I am extremely happy with all of our newspapers," the media mogul said. "There has never been a greater appetite for news in the community. And we will be able to capitalise on that pretty well."
Newspapers have come under pressure as the global downturn has accelerated a move of high-yielding advertising to the internet. Like many of its peers, News Corp has started cutting jobs at its newspapers in Australia and offshore.
But Mr Murdoch, who copped heavy criticism for buying the Journal's parent company, Dow Jones, for $US5.6 billion in 2007, said he remained a firm believer in newspapers, television and film as mass media.
"Quite simply, as long as advertisers need to move product and sell brands, these industries will remain strong" he said. "I have got great faith and if we continue the way we are going, we may even get lucky by not having so much competition at the end of it all."
But he ruled out further print acquisitions for now. Asked about reports he was eyeing The New York Times, Mr Murdoch said that he wasn't interested.
"Apart from the German pay TV business Premiere, "I have looked around and I really haven't seen any businesses that I really want to buy", he said.
Source: smh.com.au
Subscribe to:
Posts (Atom)
