The percentage of print (newspaper and magazine) advertising spending surpasses the percentage of time readers spend on print news consumption.
The recent publication of Mary Meeker’s graphic showing how much money advertisers spent on print compared to how little time readers spent there sparked discussion and debate throughout the industry.
It’s “the one chart that should scare the hell out of print media,” Poynter.org declared.
The implication, countered in part by Derek Thompson of The Atlantic, is that dollars now spent on print may soon follow the eyeballs to the Internet and Mobile.
The data that already is gripping print journalists comes later in the presentation by Meeker, partner in the venture capital firm Kleiner Perkins Caufield & Byers, who presents a much-watched Internet trends report each year. It explains not only why newsrooms are in the constant spiral of cuts we still see, but also suggests the growing opportunities in digital.
Slide 32 shows the quite incredible fall of newspaper print advertising revenue and the slower growth in overall online advertising over the last five years.
Yes, Internet advertising surpassed print in 2010, but look at print’s steep decline over five years.
With 2011 newspaper advertising numbers now available, the trends can be extended further:
- In 2007, advertisers spent $42.2 billion on newsprint ads
- By 2011, that had dropped to $20.7 billion, the lowest since 1983
- Online advertising rose from $21.2B to $31.7B
- Yet newspaper online revenue barely grew, from $3.17B to $3.25B
Print ad revenue is declining incredibly fast, and while Internet spending is increasing, it’s at nowhere near the same rate. It’s even slower growth for newspapers, which lost $10 in print advertising in 2010 for every $1 they gained in online ads, according to a Pew study earlier reported by Bloomberg BusinessWeek
The point of all this isn’t to suggest that newspapers are a hopeless cause. In fact, it’s quite the opposite. It’s to remind us of the incredibly powerful economic forces hitting newspapers. The fact that we’re still here is amazing, and presents an opportunity.
“You never hear anybody say ‘bars and nightclubs are dead!’ when in fact that industry’s current revenue amounts to an identical $20 billion,” wrote Thompson
of The Atlantic in a post earlier this year. “The reason newspapers are in trouble isn’t that they aren’t making lots of money — they still are – but that their business models and payroll depend on so much more money.”
This reminds us why more cuts are needed and inevitable.
The race that’s on is not difficult to digest: We’ve got to rapidly shed costs while continuing to build our brands online and seek out new revenue opportunities.
What we’re doing is still incredibly valuable to readers and advertisers. There’s still money to be made doing it.
Success isn’t going to come from the discovery of some silver bullet that suddenly makes digital newspaper advertising more valuable than other digital advertising. It probably isn’t going to come from pay walls, though there’s a chance they will provide some much-needed revenue.
It’s going to come from lowering print-associated costs as print advertising continues to decline.
And it’s going to come from growing our presence in digital, where the costs are lower, the competition is stiffer and the advertising dollars are harder to find.
But for those nimble enough to change, they’re there.