Newspapers have been hit by a perfect storm; classified ads
devastated by Monster.com and craigslist, and an economic recession
that has reduced all forms of advertising. Cnet reports on a report from the Pew Internet Research Center
that says newspaper classified advertising reached a peak of $19.6B in
2000, but has dropped to just under $10B in 2008, a decline of about
49%.
However, the study also reports that online advertising by
newspapers has increased by $3.1B since 2002, offsetting some of the
$9.6B loss in print advertising.
Trading Analog Dollars for Digital Dimes
– The newspapers have complained that they can’t trade print (analog)
advertising dollars for online (digital) dimes. Meaning, giving away
their content online for free and trying to make up the shortfall with
on line advertising just doesn’t work.
Does every online reader represent a lost print subscriber?
Is the newspaper really trading print subscriptions for online ads?
Perhaps in some cases, but an argument could be made that the online ad
revenue is totally additive and does not cannibalize the print revenue
stream.
This report shows that the industry as a whole is
making the transition reasonably well, recouping about a third of the
print advertising losses. Maybe the newspapers just need to do a better
job of selling online ads, and use better ad targeting networks to
increase the ad rates.
Newspapers are closing and going bankrupt
every month. They are struggling to reduce their costs to bring them
more inline with the new realities. Display ads will recover once the
recession ends. Classified advertising will never return to previous
levels. That business has been lost forever to craigslist, Monster.com,
and other online alternatives.
