Newspaper Advertising Revenues Fall 9.4% in 2007 – Where are the Marketing Dollars Headed?
According to the Newspaper Association of America and referenced over at Editor&Publisher and TechCrunch, Newspaper revenues fell 9.4% to $42 billion in the past year compared to 2006 in the US. For reference, online ad revenues grew 19% to $3.2 billion over 2006. What does this signal? Well, for starters, the looming US recession has and will continue to have a definite impact on advertising revenues, as one of the first things to be cut during tight times are marketing budgets. But is there more to it?
It’s no secret that traditional print media like newspapers are falling on hard times. Marketing executives are being given more options with where to spend their marketing dollars, and while I don’t believe that Internet ad revenues have totally lived up to their potential, innovations in the online space are arriving that will present credible options for said Marketing execs when they determine how to optimally allocate their ad budgets.
First of all, the static ad banner on the side of every web page is starting to be replaced with interactive and engaging multimedia. Online video ads and flash-based multimedia are becoming more and more common, attracting the user’s attention and creating a much more solid impression over and above the typical static classmates.com banner you traditionally see.
But more importantly, online ads are beginning to take advantage of demographics and eventually will leverage individual user preferences, as I alluded to earlier this month, to provide much more relevant and contextual ads that are targeted to every individual.
Finally, combine these new contextual online ads with a solid metrics and reporting system that can track every user’s interaction with the ad, and you can create an objective sales presentation to the aforementioned Marketing executive, giving him or her direct insight into how each penny spent online translates into brand impressions/interactions, and eventually, sales. This gives the online ad realm a tremendous advantage over traditional media, because the feedback reporting mechanisms can objectively indicate the success rate of an online marketing campaign . A complete return-on-investment can be calculated along with with every reportable stat you can imagine, so that the Marketing exec can easily gauge how to optimally allocate their online marketing spending.
Newspaper and traditional media are a one-way street. You can get indirect feedback based on general sales lift, but nothing near what can be done through online metrics. This gives online advertising the advantage, and with innovations still to come to provide even more creative as well as socially relevant ads to users, it appears as though online advertising is destined for continued growth.
On another note – Duncan Riley at TechCrunch wrote an interesting post last November about the need for consolidation in the Newspaper industry to improve their chances of survival in the face of increased competition for advertising dollars.
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