Posts Tagged ‘Newspapers’

Media Advertising Forecast

September 2, 2009

In a Wall Street Journal article today about the radio industry’s debt load, a  Zenith Optimedia advertising forecast projects much tougher sledding ahead for the radio, television and newspaper industries.

Media Advertising Forecast

Media Advertising Forecast

Zenith Optimedia predicts the newspaper industry will experience the greatest advertising revenue losses followed by the radio and television industries.

Even as overall advertising spending is predicted to drop 10.6% this year, Internet Advertising is projected to grow 83% by mid 2011.

Surely Zenith Optimedia’s projection of combined 80% revenue losses in the Radio, Television and Newspaper industries is purely coincidental when compared to their prediction Internet advertising will grow by 83% over the same time period.

The Future of Newspapers

May 4, 2009

From today’s Wall Street Journal, Warren Buffet owner of the Buffalo News and an investor in the Washington Post shared his outlook for the newspaper industry:

“For most newspapers in the United States, we would not buy them at any price They have the possibility of going to just unending losses.”

According to Buffet, as long as newspapers were essential to readers, they were essential to advertisers.

Indeed without a targeted audience, what media can hope to attract advertisers let alone monetize and profit from their content?

The newspaper industry has three strikes against it – a print cost structure, a shrinking audience and a contracting, transitory advertiser base.

Unfortunately, the future of newspapers no longer appears essential to either readers or advertisers.

RIP: General Circulation Print Media aka Newspapers

April 25, 2009

Maureen Dowd writes about the current state of the newspaper industry in her latest New York Times column titled: Slouching Towards Oblivion.

In her article she quotes two key figures from opposite sides of the same content coin; Eric Schmidt and Sam Zell.

Let’s start with the content game’s biggest loser’s comments first – Sam Zell.

Zell now realizes his purchase of the LA Times and Chicago Tribune was “a mistake”.

Zell adds, “It’s very obvious that the newspaper model in its current form does not work and the sooner we all acknowledge that, the better.” Zell also said he probably would not try for a merger because “that’s like asking someone in another business if they want to get vaccinated with a live virus.”

I don’t know about the virus metaphor, but I do know that any business expecting to profit by reaching an audience through sales of print ads is an obsolete business model.

Now to comments from the content games biggest winner – Eric Schmidt, CEO of Google, Inc.

Via Dowd, Schmidt, “reassured me that newspapers would last 500 years, but only for a boutique market: commuters taking trains, cabs and subways on the East Coast and in cities like London and Paris.”

“For somebody who lives in the suburbs,” he said, “especially if they’re driving and they have kids screaming in the back seat, why would they prefer a physical newspaper over something that is more personal.”

I don’t know if newspapers will last five hundred years or not but agree those that do survive will do so serving a niche market – not a general market – like the markets every major daily newspaper serves.

In no other way can a print media distribution cost structure begin to even hope to compete with a digital media distribution cost structure.

The new Content Kings will be those who’s business cost structure and distribution model is build on bytes not paper and ink costs and distribution.

Has Direct Mail Marketing Peaked?

March 9, 2009

Will the Direct Mail industry not follow the same life and death cycle (obsolescence) trajectory its cousins  in the Newspaper industry are presently grappling with?

Has print as an advertising medium not peaked?

If a report released today is any indication of future of direct mail marketing – then the answer is: Yes.

Few media if any who have seen their sales contract since the birth of the internet have also been fortunate enough to see their sales reach new highs let alone return to their historical norms after shrinking.

The same will hold true for the Direct Mail industry.

As with newspapers, when marketers’ dollars are ultimately redeployed they will be done so within media that meets marketers ever exacting needs for measurably higher returns on investment.

Absent some type of innovation in buyer audience targeting and delivery – direct mail like its newsprint cousin; as an advertising medium – has officially reached its peak.

Print – albeit the ultimate form of personalized communication – simply has too many inexpensive digital competitors willing to carry the same advertising message for 1/10 the cost.

When marketing dollars do return they will go where they have the greatest probability of earning a return on their investment –  online.

According to a new report from the Winterbury Group via eMarketer:

For the first time since direct mail began to be tracked in 1945, figures show that both direct mail spending and volume declined sharply in 2008.

According to “A Channel in Transformation: Vertical Market Trends in Direct Mail 2009,” from the Winterberry Group, US direct mail spending fell nearly 3% last year.

Spending dropped from $58.4 billion in 2007 to $56.7 billion in 2008.

Direct Mail Drop

Direct Mail Drop

Winterberry also projects that direct mail spending will fall another 8% to 9% this year.

Additionally, Mintel Comperemedia found that the volume of direct mail among the leading vertical industries fell an average of 12.1% in 2008.

Direct Mail Growth

Direct Mail Growth

From Mintel Comperemedia:

“Direct mail volumes declined dramatically—even more precipitously than the falloff in spending, in fact—as mailers sought to integrate more precise targeting methodologies, production efficiencies and other value focused initiatives in an attempt to cut costs and preserve the economic return of their mail programs,” Winterberry analysts wrote in the report. “Direct mail has seen its influence as a high-volume, mass-oriented response driver all but vanish.”

Reasons for the drop in direct mail were rising costs in postage, labor and production while the financial services industry crisis also contributed to the contractions in both volume mailed and the amount spent on direct mail.

Increased postage, labor and production costs compared with near frictionless digital delivery and its lower labor and production costs will continue to make digital media marketing and advertising the choice of cost and performance conscious marketers over direct mail.

… which are the reasons why Direct Mail Marketing has peaked.

2009 Ad Spending Forecast and Media Attention Deficit (MAD)

October 14, 2008

Predicted growth in advertising spend per media for 2009 from Wachovia via the Wall Street Journal:

Growth of total U.S. advertising -0.8%

Internet +10%

Yellow Pages +6.3%

Cable TV +4.0%

Billboards +3.0%

Magazines -2.0%

Broadcast TV – 2.7%

Cable -4.0%

Radio -4.8%

Newspapers -9.8%

Don’t these ad growth – or lack thereof – predictions represent each specific media’s ability to reach, target and hold its audience’s attention?

When the overall economy contracts, aren’t general media those who first experience a contraction in their audience’s attention?

When media loses it’s ability to hold its audience’s attention doesn’t it soon thereafter lose advertiser support as well?