As more newspapers cut back on print to reduce costs and focus on their websites, a troubling trend has emerged: online advertising sales are stalling.
First-quarter digital advertising revenue at newspapers rose just 1% from a year ago, the fifth consecutive quarter that growth has declined, according to a Reuters story today that cites data from the Newspaper Association of America, a trade organization.
Gannett Corporate says the U.S. community papers bucked that trend: Digital ad sales jumped 11% during the quarter; USA Today's rose even higher: 25%.
Newspaper division President Bob Dickey acknowledged there's pressure on ad prices. But he says advertisers want to be associated with strong news brands.
Challenged by mobile?
"What we show our advertisers is that our audience and our performance for them is higher than what they are going to find at other types of sites," he told Reuters.
Still, Reuters doesn't mention another, perhaps even more worrisome trend -- one that's been a big factor in Facebook's troubled sale of stock to the public: digital's move to mobile.
Cellphones' smaller screens are especially challenging because they don't display as many ads as desktop and laptop computers.
Nine days before the IPO, Facebook filed an amended IPO prospectus with the U.S. Securities and Exchange Commission expressing caution in its revenue and earnings prospects due to difficulty in monetizing its rapidly growing mobile user base.
Investors are worried: FB shares are now down nearly 30%.
GCI's industry-beating growth in the first quarter makes me wonder again: How does the company count its print and digital ads? Say, for example, a hardware store buys $1,000 worth of print, with $500 in digital thrown in for free as an inducement.
Is that counted as $1,000 in print, or $500 in print and $500 in digital?
First-quarter digital advertising revenue at newspapers rose just 1% from a year ago, the fifth consecutive quarter that growth has declined, according to a Reuters story today that cites data from the Newspaper Association of America, a trade organization.
Gannett Corporate says the U.S. community papers bucked that trend: Digital ad sales jumped 11% during the quarter; USA Today's rose even higher: 25%.
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| Dickey |
Challenged by mobile?
"What we show our advertisers is that our audience and our performance for them is higher than what they are going to find at other types of sites," he told Reuters.
Still, Reuters doesn't mention another, perhaps even more worrisome trend -- one that's been a big factor in Facebook's troubled sale of stock to the public: digital's move to mobile.
Cellphones' smaller screens are especially challenging because they don't display as many ads as desktop and laptop computers.
Nine days before the IPO, Facebook filed an amended IPO prospectus with the U.S. Securities and Exchange Commission expressing caution in its revenue and earnings prospects due to difficulty in monetizing its rapidly growing mobile user base.
Investors are worried: FB shares are now down nearly 30%.
GCI's industry-beating growth in the first quarter makes me wonder again: How does the company count its print and digital ads? Say, for example, a hardware store buys $1,000 worth of print, with $500 in digital thrown in for free as an inducement.
Is that counted as $1,000 in print, or $500 in print and $500 in digital?
With our usual digital ads, we've got a couple of frames, maybe a piece of art and logo and about 30 words to get a user to click in. The mobile ads I've seen on Yahoo, USAT and elsewhere maybe have space for a logo and two words.
ReplyDeleteHow do you draw enough interest to merit a click with that little to go on?
Jim,
ReplyDeleteI heard Saridakis give a presentation recently and he discussed how Facebook is a better media buy for "local advertisers" than is the local newspaper.
He backed it up by presenting the Facebook audience size in Wilmingoton DE which is more than five times the size of the readers of the NewsJournal. He also said that Facebook has a more desirable audience than most.
He admitted that Facebook has mobile challenges in ad monetization, but again given their size and scale, they would figure it out and still command 90% local market penetration.
He then asked the audience how many people in the room are on Facebook once a day and almost everyone raised their hands. He then asked how many were on the NewsJournal everyday and maybe three out of 200 people raised their hand. If you were an advertiser, national or local where would you play your money?
He never suggested that the consumer was going to get their news from Facebook, but he made the point that Facebook is the biggest threat to newspapers "online" advertising business and companies like Gannett haven't figured it out yet. Much like Google Local is in a search world taking local ad dollars from the newspapers from right under their noses.
Great presentation with some scary data and trends that Gannett should be alarmed by.
I'm on the web a lot, perusing a wide variety of sites. I have never encountered more nasty, in your face ads that at Gannett sites. They just pop up, or check marks dance across the page, and other irritating features. I suppose one could say, well, that's an effective ad then, since it got noticed.
ReplyDeleteIt just pisses me off toward the advertiser, and soon enough the annoying ads chase me right off the site.
"I'm on the web a lot, ...."
ReplyDeleteIt's not worse than Yahoo.
I find it interesting that Dickey is even saying these things out loud. He must be warning employees that there is another furlough coming.
ReplyDeleteIm shocked that 3 people raised their hands for reading delawareonline.com.............it's a total joke as far as content and fresh news of any kind
ReplyDeleteI picked up this week's Mo day edition of the News Journal. Sorry to be a downer but I thought it looked great.
DeleteWhen is the last time you clicked on a online ad?
ReplyDeleteI can't remember the last time I did either. People look at online ads a pest. You won't save the company by relying on online ads anytime soon.
to answer your question - it is counted as $1000 in print.
ReplyDeleteMore often than not the print is given to get the online revenue, managers are under pressure to get digital dollars
ReplyDeleteMr. Dickey. Sigh. If people have the product on a mobile it's not for the ads. The only challenge here is an exec not getting that. Ads must be icons to select; selection is Marketing 101. People do not like ads in their face whether they are folios or stickies covering up headlines in print and popups in digital. This IS a marketing company anymore, right?
ReplyDelete