Advertising Not Following News Online
The decoupling of advertising and news is emerging as the biggest problem facing the news media, according to the Pew Research Center’s Project for Excellence in Journalism.
Advertisers are not migrating to news websites with audiences, and online, news sites are already falling financially behind other kinds of web destinations, the PEJ reports in “The State of the News Media, 2008.”
Increasingly it appears the fundamental issue for the future of journalism is not audiences splintering away to citizen media, corporate PR and other non-news venues. In many ways the audience for news—and for what traditional newsrooms produce—appears to be growing. Nor are journalists failing to adapt. There are more signs in 2008 than ever that news people embrace the new technology and want to innovate.
The problem, it is increasingly clear, is a broken economic model.
Among findings:
- The new survey of journalists in the report finds most think new technology, even citizen media, are making things better. Majorities think such things as journalists writing blogs, the ranking of stories on their Web sites, citizens posting comments or ranking stories, even citizen news sites, are making journalism better—a perspective hard to imagine even a few years ago.
- The prospects for user-created content for now appear more limited, even among “citizen” sites and blogs. The most promising parts of citizen input currently are new ideas, sources, comments and to some extent pictures and video—but not citizens posting news. A study of citizen media in the report finds most of these sites are no more open—and often less so—than mainstream press. Rather than rejecting the “gatekeeper” role of traditional journalism, citizen journalists and bloggers appear for now to be recreating it in other places.
- News is shifting from being a product — today’s newspaper, Web site or newscast — to becoming a service—how can you help me? This starts with the fact that there is no single or finished news product anymore. (The afternoon newspaper is also being reborn online.) The idea of service also broadens the definition of journalism. Story telling and agenda setting are now insufficient. Journalism now must help citizens find what they are looking for, react to it, and give them tools to make sense of and use the information for themselves.
- A news organization and a news Web site are no longer final destinations. Now they must move toward also being stops along the way, gateways to other places, and a means to drill deeper. “The walled garden is over,” the editor of one leading site says. A year ago, our study of news Web sites found that only three of 24 major Web sites from traditional news organizations offered links to outside content. Eleven of those sites now offer them.
Some of the trends identified in the report are supported by data from comScore, showing that non-newspaper readers are likely to be younger, and they are actually heavier-than-average online news consumers. Meanwhile, heavy newspaper readers are more likely than average to engage with traditional print news brands online, comScore says.
The comScore data largely confirms what we already know: “Heavy print newspaper readers show a strong skew towards older age segments, while the non-newspaper reader segments skew younger. Those age 65 and older are nearly 3 times more likely than average to read the print edition of newspapers 6 times per week, while those age 18-24 are 38 percent more likely than average to not read a print newspaper at all during a typical week.”
Secondly, both the heavy print newspaper readers and the non-readers show similarly heavy consumption of print news brands online, which suggests that print news sites are not merely an extension of their offline brands but have a stand-alone brand presence in the online world, comScore says. For example, the Web sites for three of the largest U.S. city newspapers – the New York Times, LA Times and Chicago Tribune – show above average visitation from both heavy newspaper readers and non-readers.
Finally, TV news brands are also heavily visited by non-print newspaper readers, underscoring the importance of sight, sound and motion to the digital news experience. Non-readers were 29 percent more likely than the average Internet user to visit FoxNews.com and 15 percent more likely to visit CBS News Digital.
Henry Blodget at Silicon Alley Insider recently looked at advertising spending at 17 major old and new media companies. He calculates that total online advertising revenue grew 28% in 2007 , from $14 billion to $18 billion, while offline grew only 3%, from $39.5 billion to 40.6 billion.
The year-over-year growth of revenue on Google.com (US)–approximately $2 billion–was more than twice as much the growth of ad revenue in all of the offline media companies in this sample combined.
24/7 Wall Street has made the latest issue of its Old Media/New Media Newsletter available to all. It identifies Journal Register (NYSE: JRC) and McClatchy (NYSE: MNI) as newspaper companies in the deepest trouble. Journal News (JRN) could have a rebound, Gannett (NYSE: GCI) and Washington Post (NYSE: WPO) might recover, while The New York Times (NYSE: NYT) is “a sucker play.”
24/7 should welcome the news that the Times Monday agreed to bring two dissident shareholders onto its board.
Meanwhile, former Times editor Howell Raines handicaps the odds of a possible change of ownership of the Times at portfolio.com. Raines’s hunch: don’t rule out the possibility of News Corp’s Rupert Murdoch taking a run at the Times. In any case he writes, “To me, underlying all these scenarios is the fact that, based on business performance, something’s got to give at the Times”
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