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Online advertising spend tops £4bn after 12.8% rise

March 29th, 2011 | 1 Comment | Posted by in Advertising, Business

Spending on online advertising has topped £4 billion for the first time in the UK, as advertisers spend £1 in every £4 online, according to new research.

The findings, published today by the Internet Advertising Bureau (IAB) and accountancy firm PricewaterhouseCoopers, showed that online advertising grew by 12.8 per cent, from £3.5 billion in 2009 to £4.1 billion last year. The digital share of the UK’s total advertising spend of £16.6 billion last year rose to 25 per cent.

Mobile advertising experienced 116 per cent year on year growth on a like-for-like basis, up from 32 per cent in 2009. Advertisers spent £83 million on mobile advertising in 2010, led by the entertainment and media sector.

Researchers explain the findings in this video:

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Canadian newspaper publisher reports print growth, digital shrinkage

July 23rd, 2010 | No Comments | Posted by in Business, Newspapers, Online Journalism

The New York Times yesterday reported that growth in digital advertising had offset a decline in print ad revenue. Which seems to make sense in 2010. But interestingly Canwest, publisher of the largest chain of English-language dailies in Canada, reported the same day that growth in print advertising had offset a decline in digital media revenue. So much so that the publisher grew overall revenue on the strength of the print ad money.

Parent company Postmedia Network Inc., which bought Canwest earlier this month, reported a one per cent increase in overall revenue despite a 16 per cent decrease in digital media.

Full story at this link…

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How much is an article worth? ‘Dead tree’ thinking could hinder digital content economy

February 10th, 2010 | 7 Comments | Posted by in Newspapers

Could you spare 10p for a news report? Maybe 5p for the sports results? Many in the news industry would like us to pay to see news articles that we’ve previously enjoyed for free, whether it’s via websites or hand-held devices.

But one of the problems of this brave, new paid-content world is that the news publishing industry has yet to move on from long-held assumptions about the value of content, inspired by centuries of physical, print distribution.

For example, just look at the sheer size of national newspapers: they are huge products, especially on weekends. Big is better, goes the saying – and mass reach gives you more circulation and advertising revenue.

But in the global, decentralised, just-Google-it content economy, it doesn’t work like that: the publishers that will win through will have the most relevant, findable, highest quality content – not just lots of it.

To illustrate the mismatch between offline and online economics, I’ve gone through Wednesday’s edition of the Times to find out just how much is in it…

  • News: there are 42 separate substantial news items in today’s Times, not including some of the smaller NIBs, and at least seven separate analysis pieces;
  • Comment: including the three leaders, 13 comment pieces make their way into the main book;
  • Sport: 21 news stories and two features;
  • Then there’s the diary section: five lengthy and well-written obituaries, crosswords, weather, travel and the Register pages of interesting factoids;
  • The Times2 centre pullout has 10 features, some short, some long, as well as four reviews.

So our grand total for today’s Times is more than 100 articles. The quality of writing, pictures and editing is, as you would expect, consistently high.

But if these articles were available via a pay-per-view offer, how much would you pay? If they were priced 10p each, that means to buy everything in today’s paper, you would have to pay £10; at 5p per article, that’s £5 per issue. But my copy of the paper only cost £1.

News International boss Rupert Murdoch will more likely opt for a subscription model for the Times and Sunday Times websites – just as he’s succeeded in selling long-term pay TV packages around the the world.

But to reach a competitive pricepoint, he and other publishers will have to massively realign the value of each piece of news and comment from its current-day, paper value of one or two pence to fractions of pence.

In reality, the real market value of news is what people will pay and the danger is that for an entire generation of readers weaned on the free-to-air internet, that price is nothing at all

[See also: What’s the average cost of a news article?]

Patrick Smith is a freelance journalist and event organiser, and formerly a correspondent for paidContent:UK and Press Gazette. He blogs at psmithjournalist.com and is @psmith on twitter.

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Council news round-up: ad revenue shortage for East End Life and plans for new council TV

September 17th, 2009 | No Comments | Posted by in Newspapers

There’s been much debate amongst regional and local newspaper representatives in the UK about the impact of local authority ‘newspapers’ or freesheets on their advertising revenue, role in the community and news coverage.

Yet much of this debate has been difficult to frame, with exact details of staffing numbers, cost and output of these publications varying between authority.

In London, Andrew Gilligan suggested that local authorities in the city employed more staff writers than the capital’s newspapers.

This week some more stats can be added to the picture:

Press Gazette reports that Tower Hamlets’ Borough Council paper, East End Life, will need an extra £400,000 of tax payers’ money to keep it going.

According to a mid-year budget report from the authority, the freesheet is suffering from a £396,000 shortfall in advertising for the current financial year.

Deputy leader of the council, Joshua Peck, reportedly told the East London Advertiser that this lack of ad revenue would be made up for with cuts to the authority’s communications budget.

Add to this HoldtheFrontPage’s report on the cost of East End Life, which states:

“A previous investigation by the Advertiser showed that public-sector organisations paid a total of £980,000 to advertise in East End Life, making the true cost to the public purse £1.1 million a year.

“An alternative budget put forward by Tory councillor Tim Archer earlier in the year suggested the council could save £670,000 or 1pc off the average council tax, by scrapping the paper and taking out advertising with the Advertiser instead.”

Elsewhere, plans for a new TV station launched by Carmarthenshire Council (link spotted via Jon Slattery’s blog) have come under criticism.

According to a report on thisissouthwales.co.uk, the station would cost £30,000 a year to run. In a move to fund the new station, the authority is planning to drop one of its bi-monthly news magazines, which currently costs more than £114,000 to produce and distribute.

Industry groups have called on the Audit Commission to investigate the impact of local council newspapers on the regional media industry, as part of the government’s recommendations to the commission in the Digital Britain report. But the commission said such an assessment should be made by the Office of Fair Trading.

The commission will however review all aspects of council communications including press offices, publications, websites and expenditure on advertising jobs.

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Future: Digital ads going from strength-to-strength

July 30th, 2009 | No Comments | Posted by in Advertising, Magazines

Specialist magazine publisher Future has reported a resilient and ‘healthy balance sheet’ in the face of recession with a 15 per cent increase in online advertising revenue in the nine months to June 30.

The company released an interim management statement today, which suggested that although print advertising revenues were down 8 per cent, this was offset by the growth in online advertising – resulting in a total fall of only 4 per cent.

Online ads represented 22 per cent, nearly a quarter, of total advertising revenue – up 19 per cent year-on-year – over the same period.

In the company’s interim report, CEO Stevie Spring said: “While it is premature to talk about a market recovery, there has been no deterioration in trading conditions since the half year.”

A third of the group’s revenue comes from its US operation and it capitalised on a favourable US exchange rate against the sterling with a 24 per cent stronger US dollar in the reported period.

As a result, the publisher had come out relatively unscathed through what it called ‘exceptionally challenging market conditions’, with an overall revenue decline of just 2 per cent, or 9 per cent calculated on a constant currency basis.

Publishing revenues

In the UK, which generates the remaining two thirds of the company’s income, publishing revenue, based on constant currency, was down 6 per cent. The fall in revenue was mainly due to a decline in PC gaming, personal computing and automotive titles, the report suggested.

In the same period, publishing revenues for the US operation fell 13 per cent, on a constant currency basis. The publisher blamed ‘greater exposure to generic advertising market volatility’ in the territory, particularly with regard to its digital business.

Future’s future

Future produces more than 80 newsstand magazines, 62 websites and 25 annual live events on special-interest topics, such as computer games, film, music and sport.

Spring, who according to paidContent:UK, ‘never talks down the health of the magazine industry’, was bullish about the future of the publisher:

“I am confident that when recovery comes, Future is well-positioned to benefit. We’ve continued to invest in both new products and new people and, more broadly, our strategy remains firmly on track. We are in the best shape we can be in for the mid-term,” he said.

Future’s annual results for the year to end of September will be announced on November 26.

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Nick Denton: Gawker revenues up 45 per cent in first half of 2009

The plunge has already been pretty terrifying for a range of companies from Yahoo and IAC to the newspapers,” writes Gawker founder Nick Denton, referring to his previous prediction that media companies should prepare for a 40 per cent downturn in advertising revenue over the economic cycle.

“But I was wrong in one respect: a few premium internet brands, Gawker’s among them, have withstood the advertising apocalypse.”

Full post at this link…

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The Observer: ‘Painful decisions’ about what it can print as advertising revenue and circulation fall

Readers of the Observer might have noticed that the paper no longer prints a full television guide each week. Many have written to the paper to complain. One said that a full guide would be ‘infinitely preferable to part two of a Spanish or Italian CD, which is both incomplete and of absolutely no use to me.’

Yesterday Stephen Pritchard, the readers’ editor for the Observer, part of Guardian News&Media, explained:

“The figures are stark. With advertising revenue set to plummet 26 per cent this year and circulation down 6.9 per cent on last year, the Observer, like other newspapers, is having to make painful decisions about what it can afford to print. Loyal readers have displayed remarkable forbearance recently as the news, business and sport sections have gradually slimmed down but they could contain themselves no longer when the TV guide disappeared.”

(…) “This is not a decision we took lightly and it is a source of real regret to us,” wrote the editor, John Mulholland, in reply to complainants. “This was just one of the host of difficult decisions we have had to make in recent weeks. Newspapers and media groups are facing the most difficult trading conditions imaginable. Not only are we suffering from the catastrophic fallout from the credit crunch in terms of severely reduced advertising revenues but, additionally, our industry is undergoing structural change which is causing enormous disruption.”

Full story at this link…

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Mashable: Local accounting for 74 per cent of advertising revenue on Facebook, says report

July 22nd, 2009 | 1 Comment | Posted by in Advertising, Editors' pick

According to a new report from Borrell Associates, local advertisers and businesses will make up 74 per cent of Facebook’s ad revenue this year – around $229 million.

Mashable points out that Facebook makes geographic targeting of ads particularly easy. But the proportion is significantly higher than the amount of revenue from local advertisers expected for MySpace and Twitter.

Full story at this link…

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Todd Gitlin’s keynote JiC speech transcript: The four wolves who crept up to journalism’s door

Following our round-up of the Westminster students coverage of last week’s Journalism in Crisis conference, we’ll link to one final item:

Professor Todd Gitlin’s keynote speech, given via Skype, on the first day of the Westminster University / British Journalism Review Journalism in Crisis event (May 19):  ‘A Surfeit of Crises: Circulation, Revenue, Attention, Authority, and Deference’.

Gitlin, who is professor of journalism and sociology at Columbia University, talked about how four wolves have arrived at the door of journalism ‘simultaneously, while a fifth has already been lurking for some time’. These were the wolves no-one was expecting, because everyone’s been crying wolf for so long. Gitlin spoke mainly in regards to American journalism because ‘it is what I know best’.

He used quotes and statistics from the Pew Project for Excellence in Journalism ‘Changing Newsroom’ 2008 report, and also his own anecdotal evidence and academic references, to illustrate the predicament – which he feels is fair to call a number of ‘crises’ – that journalism faces.

Here are a few choice extracts:

  • The four wolves at the door, and the fifth one lurking: “One is the precipitous decline in the circulation of newspapers.  The second is the decline in advertising revenue, which, combined with the first, has badly damaged the profitability of newspapers. The third, contributing to the first, is the diffusion of attention.  The fourth is the more elusive crisis of authority. The fifth, a perennial – so much so as to be perhaps a condition more than a crisis – is journalism’s inability or unwillingness to penetrate the veil of obfuscation behind which power conducts its risky business.”
  • Circulation of newspapers: “Overall, newspaper circulation has dropped 13.5 per cent for the dailies and 17.3 per cent for the Sunday editions since 2001; almost 5 per cent just in 2008.  In what some are calling the Great Recession, advertising revenue is down – 23 per cent over the last two years – even as paper costs are up.  Nearly one out of every five journalists working for newspapers in 2001 is now gone.  Foreign bureaus have been shuttered – all those of the Boston Globe, for example, New England’s major paper.
  • “I have been speaking about newspapers’ recent decline, but to limit the discussion to the last decade or so both overstates the precipitous danger and understates the magnitude of a secular crisis—which is probably a protracted crisis in the way in which people know—or believe they know—the world.  In the US, newspaper circulation has been declining, per capita, at a constant rate since 1960. The young are not reading the papers.  While they say they ‘look’ at the papers online, it is not clear how much looking they do.”
  • “The newspaper was always a tool for simultaneity (you don’t so much read a paper as swim around in it, McLuhan was fond of saying) at least as much as a tool for cognitive sequence.  What if the sensibility that is now consolidating itself—with the Internet, mobile phones, GPS, Facebook and Twitter and so on – the media for the Daily Me, for point-to-point and many-to-many transmission—what if all this portends an irreversible sea-change in the very conditions of successful business?”
  • The Clamor for Attention: “Attention has been migrating from slower access to faster; from concentration to multitasking; from the textual to the visual and the auditory, and toward multi-media combinations.  Multitasking alters cognitive patterns.  Attention attenuates.  Advertisers have for decades talked about the need to ‘break through the clutter,’ the clutter consisting, amusingly, of everyone else’s attempts to break through the clutter.  Now, media and not just messages clutter.”
  • “Just under one-fifth of Americans between the ages of 18 and 34 claim to look at a daily newspaper – which is not to say how much of it they read. The average American newspaper reader is 55 years old. Of course significant numbers of readers are accessing – which is not to say reading – newspapers online, but the amount of time they seem to spend there is bifurcated.  In roughly half of the top 30 newspaper sites, readership is steady or falling.  Still, ‘of the top 5 online newspapers –  ranked by unique users – [the] three [national papers] reported growth in the average time spent per person: NYTimes.com, USAToday.com, and the Wall Street Journal Online.’ One thing is clear:  Whatever the readership online, it is not profitable.”
  • “The question that remains, the question that makes serious journalists tremble in the U. S., is:  Who is going to pay for serious reporting?  For the sorts of investigations that went on last year, for example, into the background of the surprise Republican nominee for Vice President, Gov. Sarah Palin of Alaska.”
  • Authority: “Journalism’s legitimacy crisis has two overlapping sources: ideological disaffection from right and left, and generalized distrust. Between them, they register something of a cultural sea change.  The authority of American journalism has, for a century or so, rested on its claim to objectivity and a popular belief that that claim is justified. These claims are weakening.”
  • Deference: “We have seen in recent years two devastating failures to report the world – devastating not simply in their abject professional failures but in that they made for frictionless glides into catastrophe.  The first was in the run-up to the Iraq war (…) More recently, we have the run-up to the financial crisis (…) Given these grave failures of journalism even when it was operating at greater strength not so long ago, one might say that rampant distrust is a reasonable and even a good thing.”
  • Resolutions: “The Project on Excellence’s conclusion is that ‘roughly half of the downturn in the last year was cyclical, that is, related to the economic downturn. But the cyclical problems are almost certain to worsen in 2009 and make managing the structural problems all the more difficult.’ Notice the reference to ‘managing the structural problems.’  They cannot be solved, they can only be managed.  The unavoidable likelihood, pending a bolt from the blue, is that the demand for journalism will continue to decline and that no business model can compensate for its declining marketability.  No meeting of newspaper people is complete these days without a call – some anguished, some confident – for a ‘new business model’ that would apply to the online ‘paper.’  The call has been issued over the course of years now.  It might be premature to say so, but one might suspect that it has not been found because there is none to be found.”
  • “What I do know is that journalism is too important to be left to those business interests. Leaving it to the myopic, inept, greedy, unlucky, and floundering managers of the nation’s newspapers to rescue journalism on their own would be like leaving it to the investment wizards at the American International Group (AIG), Citibank, and Goldman Sachs, to create a workable, just global credit system on the strength of their good will, their hard-earned knowledge, and their fidelity to the public good.”

Full transcript at this link…

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AdweekMedia’s US magazine ‘hot list’: Economist and Elle take top spots

March 23rd, 2009 | No Comments | Posted by in Magazines

AdweekMedia has published its annual ‘hot list’ for US magazine titles:

“Inclusion in AdweekMedia’s annual ‘Hot List’ is based on several factors, including: ad page and revenue gains; performance within a magazine’s competitive category; circulation gains; interviews with media buyers and consultants, and AdweekMedia’s own editorial judgment,” says a release.

Here’s the top 10 compared by circulation and advertising revenue (in millions of dollars) using Many Eyes’ visualisation tools (click on the images to see more):

Circulation

Screenshot of AdweekMedia's 2009 hot list visualised by circulation

Advertising revenue
Screenshot of AdweekMedia's 2009 hot list visualised by advertising revenue

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