Newspapers, Advertising

Burn At Adjoining Stakes

 

Newspapers thrash and wail as they are burned at the stake of change. Most were too dumb to arrange for a quick garrote before the flames started, and now the crackle, smoke and sizzle of dying assumptions is the chorus to their final screams.

 

Which keeps them too preoccupied to do some basic reporting and look at the next stake over, where the print advertising business is the unwilling guest of honor at a final barbecue of its own.

 

When it’s not busy holding the most publicized secret meetings since Eliot Spitzer and Friends, the Newspaper Association of American collects data. Some recently released stuff gives details on advertising, the source of almost all the money in the newspaper game.

 

According to NAA’s figures, the value of print advertising in 2005 was $47.408 billion. In 2008, that was down to $38.704 billion – a drop of more than 18 percent over the three-year period. That’s bad enough, but the NAA’s figures show an accelerating year-to-year decline.

 

In 2006, the decline was 1.7 percent. In 2007, that had increased to 9.4 percent and by 2008 it was 17.7 percent. In the first quarter of this year, the rate of decline for print sales was 29.7 percent, and even online sales declined 13.4 percent.

 

While print journalism wraps itself in the First Amendment to cover an otherwise naked lust for the First Annuity, equally profound changes have been rocking advertising.

 

First, if all those print ads are not being placed, it means lots of folks are not being paid to create, produce and place them. You know, the folks in the advertising business. Which in turn means that the advertisers themselves are getting along without those mass-market print ads.

 

Well, yes, there was a severe recession that now seems to be ending, but the betting is that neither mass-market print journalism nor mass-market print advertising will rebound to track with the economy.

 

And the reason for both is the same, although it’s small comfort as they crackle and pop on adjoining stakes. They are no longer needed.

 

Individual consumers want to read only news and ads of interest, but the technology of our past didn’t permit that, except in a clumsy way. That meant herding both news and ads into special sections of a newspaper or to niche magazines or direct-mail demographics.

 

In all cases, the consumer got some of the wanted information along with lots of the unwanted, while the advertiser got some potential customers along with lots of those who just weren’t interested. And both paid.

 

The internet changed that in important ways. First, the consumer decides what interests them and now has the tools to exclude what doesn’t, which goes for both news and ads. Second, for both news-providers and advertisers, there is an instant-feedback loop that tells publishers exactly what got read and what didn’t and advertisers not only what got read, but whether or not that resulted in a sale.

 

You can’t do that with mass print journalism and the advertising that once supported it.

 

So both consumers and advertisers have stopped paying for news and eyeballs they don’t want and can’t use.

 

What, if anything, either group will pay for in the future has yet to be confirmed. In the meantime, if you’re looking to invest in a growth industry, get into stakes and kindling. It’s a booming business.

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