Is the ad market slowing down?

Larry Kramer · November 28, 2011 · Short URL:

The media search for new revenue streams picks up steam

Concern is growing that the overall Advertising Market is beginning to slow down, and that situation will worsen after the presidential election is over. Such concerns have caused media companies to accelerate their hunt for new revenue streams.

None of this comes as a surprise. Increasingly marketers have shifted funds from advertising to PR, social media efforts and even content creation. The percentage of marketing money that goes to advertising is dropping and is expected to continue to drop.

According to The Wall Street Journal today, Kantar Media is suggesting that decelerating ad spending growth in the first half of the year could shift to an actual decline in the third quarter.

The Los Angeles Times Story about the same report from Kantar says that “seismic shifts in spending continue to roil the media industry.” Pointing out that many of these changes have been driven by the recession, the LA Times cites major ad buying categories like retailers, automakers and homes sellers as having “been particularly hard hit, and few are predicting a speedy recovery.”

But there have been other contributors to the problems. After the Japanese earthquake damaged car factories and slammed auto production, the floods in Thailand did the same thing to many of the parts manufacturers.

All of this is contributing to a need on the part of content creators to search for new revenue streams besides traditional advertising. In the video world, while some of that money may come from non-traditional advertising, like digital or even advertising supported video-on-demand, there are also non-advertising related revenue streams, like NetFlix and Amazon deals, where consumers are starting to pay both subscriptions and one-time fees to have content delivered when and where they want it.

For print publications, that can mean several things.

One of the more interesting strategies comes from the LA Times this week, which launched its e-books business this week with the publication of “A Nightmare Made Real”, an e-book about a crime the paper covered earlier in the year, combining the paper’s coverage and some new material into a digital book.

Coming soon is a collection of holiday cookie recipes that paper had published earlier. Pricing on e-books is going to be tested, ranging from 99 cents to $19.99, with some consideration being given to a subscription model.

The books will be sold on Kindle, Nook, IBooks and at the newspaper’s own e-bookstore. According to the LA Times, several newspapers are now experimenting with ebooks.

We can only hope the move to generate new revenue streams happens quickly enough to offset the softening in the traditional markets.


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