Observers of the cratering newspaper industries in the US and Europe may be surprised at this news: Print newspaper circulation around the world actually increased 2% in 2013 compared to 2012. The pocket of strength comes from rapidly maturing economies in Asia and Latin America, where people who a generation ago might have used newspapers mainly for kindling are now finding them to be valuable for the purposes for which they were intended.

That’s the highlights from the latest World Press Trends survey, which was released last by the World Association of Newspapers and News Publishers. The survey includes data from more than 90% of the news organizations that make up the industry’s total value.

There was no good news report in North America and Europe, where with print circulation dropped 5.3% last year and 10.3% over the last five years. Print ad revenues in North America are down a sickening 29.6% over five years. In Europe, print circulation declines have been even greater – 23% over five years – although advertising dollars have not fallen as quickly.

It’s quite a different story in Asia/Pacific, where print circulation is up 6.7% over the last five years and ad revenues have nudged ahead 3.3% during that time. Latin America is booming. Print circulation is up 6.3% over five years and ad revenues are up a stunning 50%.

It all adds up to an industry that’s a lot more stable on a global basis that many people thought. While overall revenue annual is down about 13% since 2008, results in 2013 were essentially flat, indicating that the industry’s freefall has slowed.

This is no time to celebrate, however. The last two years have shown that the developing world is migrating quickly to electronic media the expense of print, which still delivers 90% of the global industry revenues. While publishers report some success with packaged print and digital subscriptions (single-copy sales are down 26% worldwide but subscription sales are only down 8%), no one has yet solved the revenue problem.

Print Newspaper Circulation and Advertising Trends

 

Circulation revenue for U.S. newspapers grew for the second consecutive year, rising 3.7% to $10.87 billion in 2013, according to preliminary data from the Newspaper Association of America.

However, that wasn’t enough to offset continuing deterioration in the advertising business. Total revenues for the industry were $37.59 billion, off 2.6% from 2012. The good news is that the rate of decline appears to be slowing. The bad news is that digital advertising is growing more slowly for newspapers than it is for the industry as a whole. The U.S. online ad market grew by 17% year-over-year in 2013, but newspapers’ digital ad revenues increased by just 1.5%. Digital advertising now accounts for 12% of total industry revenue. It’s not clear how native advertising is being factored into those numbers.

Incidentally, online ad spending  surpassed broadcast TV revenue for the first time last year, according to the Interactive Advertising Bureau.

An interesting new area of growth is digital agency marketing services, in which media companies help local businesses build a digital marketing presence through services like online advertising and direct mail. That business grew 43% last year, although from a very small base.

Declines in traditional print advertising continued their numbing downward trend, falling 8.6% from the previous year. Classified advertising was off 10.5%.

An interesting factor in circulation revenue growth is the success of digital-only circulation revenue, which was up 47%. Bundled print and digital circulation packages increased 108%. However, print-only circulation revenue dropped 20%.

Read more on MediaLife.

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With BuzzFeed and Upworthy reporting eye-popping traffic growth and planning to hire teams of reporters, many people are wondering whether sharing is the new currency of media success.

The idea is that if you give readers enough top-ten lists and animated GIFs they’ll do all your marketing for you. You don’t even have to worry about search engine optimization because nothing ever went viral on search. This philosophy has even given birth to a new style of headline writing that’s intended to stimulate sharing (“Why’s This Kid Throwing Coins? The Reason May Or May Not Blow Your Mind, But Something Does Blow Up,” reads one recent Upworthy example).

Henry Blodget

But maybe sharing isn’t all it’s cracked up to be. In a recent case study on USA Today, Michael Wolff looks at Business Insider, the hyper-caffeinated new-media brainchild of exiled Wall Street bad boy Henry Blodget. Business Insider is notorious for its fixation on being first and for driving its reporters to exhaustion. It’s a content mill – albeit with higher quality than many of its peers – that churns out large volumes of information in the quest to earn shares on Facebook and Twitter.

And it’s generating traffic: 25.4 million unique visitors in January, says Wolff. The problem is that Business Insider has low reader loyalty:

Only a small percentage of Business Insider’s traffic actually seeks it out and regards it as a worthy destination and a source with particular brand authority. Most other readers land on a Business Insider article because of search-engine results, or because of an engaging — tabloid-style — headline in a Facebook feed and other social-media promotions, which generate 30% of Business Insider’s traffic.

Wolff asserts that this drive-by traffic has little value because readers don’t identify with the brand. Worse is that the drive for big numbers becomes a race to the bottom.  As advertising rates continue to drift lower, publishers must seek ever-higher traffic volumes to stay in the same place. This means resorting to gimmicks like contests, cheesecake photos and celebrity gossip. That attracts poor-quality traffic which has low brand affinity and little value to advertisers. It’s a vicious cycle.

Digital Dimes

Blodget disagrees. In a response on Business Insider he says that the very problems Wolff cites are actually opportunities. New media companies don’t have legacy businesses to protect and so are free to disrupt mainstream competitors and steal revenue, he says. “We are better at serving digital readers than many traditional news organizations, so we can thrive on these ‘digital dimes,’” writes Blodget. His post displays a photo of what are presumably a group of happy young reporters in the company’s New York offices (Wolff says Business insider has hired 70 full-time journalists at a cost of more than $15 million a year. Do the math).

We think Wolff is on to something. Take a look at the chart below from the Pew Research Journalism Project. It depicts traffic to the 26 most popular U.S. news sites over a three-month period. It shows conclusively that visitors who reach a site directly (via a bookmark or typing the address into a browser) stay much longer, read much more and visit more often.

This isn’t surprising when you think about it. Typing “nyt.com” into a browser is an act of brand affinity, whereas headline-clickers on Facebook don’t really care where the headline comes from. The BuzzFeeds and Upworthys of the world must compete headline by headline. Is that a problem?

Attracting readers with gimmicks is nothing new. One of the myths of the news business is that people read newspapers primarily for the news. The reality is that they read for all kinds of reasons. Any veteran of the pre-digital publishing days will tell you that an embarrassingly large number of traditional newspaper readers bought copies for the coupons, Ann Landers, comics, the Jumble and the daily horoscope.

But at least in those days readers knew what brand to buy. Today’s audience has more affinity to the content than to the publisher, and aggregators like Flipboard are constantly looking for ways to supersede publishers’ brands with their own. Brand still matters. A click is not the same as a reader.

 

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The World Association of Newspapers and News Publishers (WAN-IFRA) released an upbeat report on the state of newspapers worldwide, pointing to growing readership levels in emerging economies but cautioning that engagement levels are still low.

The report includes data from 70 countries that account for more than 90% of the industry’s value. It shows:

  • More than half the world’s adult population reads a daily newspaper, with 2.5 billion reading in print and more than 600 million consuming in digital form.
  • The newspaper industry generates more than US$200 billion of revenue worldwide each year. However, that figure is down 2% from last year and 22% since 2008. The numbers are dragged down by plummeting ad sales in the U.S., which has seen print advertising revenues fall 42% since 2008. The good news is that ad revenues are up 9.1% in Latin America, 3.6% in Asia and 2.3% in the Middle East and North Africa.
  • Newspaper circulation remains high, through stagnant, globally. Circulation declined only .9% worldwide in 2012 from a year earlier, primarily due to  rising circulations in Asia. Circulation is down 2.2% globally since 2008, with the steepest declines in Europe.
  • While newspapers are a vital information source, they aren’t engaging online audiences very effectively. Newspapers accounted for only 7% of visits, only 1.3% of time spent online and only .9% of total pages visited.
  • U.S. newspaper publishers now generate 27% of their revenues from non-traditional sources, such as digital advertising, services and ancillary products.

While the report can be seen as a glass-half-full scenario, we think it’s encouraging to see publishers diversifying their revenue sources. The industry’s historic dependence on print advertising in general – and classified advertising in particular – is at the root of its problems. The rapid decline of those revenue sources is prompting some publishers to get creative about finding new revenues. Those that succeed will be stronger for it.

 

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By Paul Gillin | June 9, 2013 - 10:42 am - Posted in Advertising, Business News, Newspapers

PwC (formerly PricewaterhouseCoopers) has issued its 14th annual outlook for the global entertainment and media industry, and the trends are mostly positive – or at least not horrendous – for mainstream media through 2017.

Newspaper advertising is expected to decline 2.9% annually to $28.5 billion in 2017, from an estimated $33 billion last year. The sector “is not in ‘terminal decline,; at least in the near or medium term,” writes MarketingCharts in a summary article. “In fact it has shown some resilience, and print circulation has stabilized even as newspaper websites attract an increasing number of readers.”

TV advertising looks particularly strong, with a 5.1% forecasted compound annual growth rate. Advertisers are particularly intrigued about the potential of personalization and so-called “second screen” viewing which permits audience members to interact with the broadcast as well as with each other.

Even radio is forecast to grow, driven by satellite networks. And then there are billboards. Those out-of-home vehicles will lag only TV advertising in projected revenue growth, perhaps because they still deliver a unique experience and you can’t avoid looking at them.

The full report costs $2,200, but the links above provide the highlights.

US Traditional Media Outlook 2013-2017

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By Paul Gillin | June 6, 2013 - 7:43 am - Posted in Advertising, Business News, NewMedia

ZenithOptimedia just released a list of the world’s largest media companies ranked by media revenue, which it describes as “all revenues deriving from businesses that support advertising, not just the advertising revenue itself.” Number one on the list is Google at nearly $38 billion in 2011 revenues. It’s followed by DirectTV and then News Corp. which owns The Wall Street Journal, Fox TV and many U.K. newspapers.

How dominant is Google? It accounted for 49% of the world’s internet ad expenditure in 2011, according to the ZenithOptimedia press release. Three other Internet media owners (Facebook, Microsoft and Yahoo!) generated another $11.3 billion. Much of this revenue came out of the hides of traditional media companies.

That isn’t to say that mainstream media is standing still. “Of the top 30 global media owners, 22 are companies whose main business is to attract audiences with strong content,” says the press release. “Between them, these 22 generated $169 billion in media revenue in 2011, or 61% of the total generated by the Top 30.”

So content rules, but search rules more. The world’s biggest media company produces almost no content, and it’s in a market that’s growing 13% per year.

ZenithOptimedia Top 10 Global Media Owners in 2011

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Paywalls continue to spring up across the news landscape while new-media enthusiasts warn that gated news is a throwback to a bygone age.

Britain’s Telegraph and Sun announced plans to erect paywalls almost simultaneously after successful tests. The Telegraph, which claims to have the largest circulation of any U.K. daily, will give away 20 articles free every month and charge £1.99/mo. thereafter for unlimited access to the website and smartphone apps. The Sun‘s move is timed to make the most of parent company News International’s £20M deal to show near-live clips of Premiership football highlights on its websites beginning in August.

In Canada, Postmedia Network will roll out paywalls across all 10 of its properties, including the National Post. The move completes an experiment that began two years ago and has been deployed in stages. Digital-only subscribers will have to ante up $9.99/mo. for reading more than 10 articles in any title within a month.

Perhaps most indicative of the surging popularity of paywalls, though, is Politico’s decision to experiment with the idea. The Washington, D.C.-focused news service, which was once personified the new breed of digital-only publishers, has given in to the reality that advertising rates continue to fall and subscriber revenues must become part of the business. “We believe that every successful media company will ultimately charge for its content” said a memo signed by several of the Politico’s top executives.

Circling the Wagons

We continue to be more interested in experiments that break new ground in publishing economics than efforts to resurrect old models. There’s plenty to report there, as well.

Ken Doctor kicks us  off with a fine analysis of where NewsRight went wrong. NewsRight was a consortium of 20 publishers that sprung out of the Associated Press in early 2012 with the mission of tracking down copyright violators while also creating a subscription model that would permit digital publishers to license quality content for redistribution.

“Publishers have seethed with rage as they’ve seen their substantial investment in newsrooms harvested — for nothing — by many aggregators…” writes Doctor on the Nieman Journalism Lab, “…but rage — whether seething or public — isn’t a business model.”

Bingo. Consortia are good for only two things: setting standards and raising awareness. They’re a terrible way to create new products. The idea of pursuing copyright violators individually is ludicrous, anyway. It’s like trying to stamp out ants. There are always more where the first batch came from.

The only anti-piracy tactic that works is a public awareness campaign, and the newspaper industry has shown little interest in that. NewsRight died because the members inevitably had conflicting priorities, and it was impossible for everyone to find common ground when everyone had something to lose.

Does BuzzFeed Have it Right?

Sponsored Post on BuzzFeedDoctor points to the work being done at NewsCred, BuzzFeed and Forbes, among others, as examples of new ideas worth developing. “In 2013, we’re seeing more innovative use of news content than we have in a long time,” he writes. We’re particularly interested in BuzzFeed, the viral content engine started by Jonah Peretti and others in 2006. At first glance it looks like any other new-age news site, with a bottomless home page stuffed with a jumble of seemingly unrelated content ranging from the profound to the ridiculous.

As New York magazine points out in a lengthy profile, though, there’s a lot more going on there than cat photos. BuzzFeed is tuned to create content that people want to share, and it could care less who the authors are. The home page blithely mixes contributions from staffers and advertisers with minimal labeling. Every element within every story can be shared on every social network you can imagine. Every page is designed to maximize audience interaction with the content.

BuzzFeed makes little effort to segregate advertiser contributions from the work of its own staff. A photo essay on “12 Tips to Have An Amazing Barbecue” from Grill Mates sits next to “Just The London Skyline, Made Out Of Sugar Cubes” by staffer Luke Lewis. Some of the branded stuff is actually pretty good, like, JetBlue’s “The 50 Most Beautiful Shots Taken Out Of Airplane Windows.”

Is this serious journalism? Well, no. We don’t think corporate brands will ever produce that. But if they want to run their grilling tips next to similarly lightweight content from professional editors, why not let them? The genie that goes by such names as “brand journalism” and “content marketing” isn’t going back in the bottle. A recent survey concluded that corporate marketers and agencies consider branded content to be among their most effective branding tactics, and that 69% plan to spend more money on it in the coming year.

The bigger issue is whether sustainable publishing business models can be found that don’t rely entirely upon display advertising or subscription revenue. BuzzFeed and NewsCred are making some progress there. We don’t believe they produce serious journalism, if sex, gossip and voyeurism can attract a large enough audience to support real journalism, then we’re in favor of it. The idea isn’t new. It’s worked in the U.K. for decades.

Content Marketing Effectiveness

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Top areas of ad spending declines, 2013

Traditional media took it on the chin in marketing plans researched by Aquent and the American Marketing Association (AMA). One in three marketers plans to decrease spending on newspaper advertising, making newspapers the big loser in the study. They were joined in the cellar by consumer magazines, radio, trade magazines and television, all of which were cited by more than 20% of respondents as targets of budget cuts. The winners? Mobile media, social media and marketing automation. More than three in four marketers plan to increase spending in those areas.


Perhaps marketers are simply reflecting the interests of the audiences they want to reach. Alan Mutter gathers some statistics that point to ominous demographic trends:

  • Only 6% of people in their 20s and 16% of 40-year-olds regularly read newspapers, compared to 48% of people over 65.
  • Only 29% of the U.S. population regularly read a newspaper in 2012, down from 56% in 1991.
  • Three-quarters of the audience at the typical newspaper is 45 years of age or older. In comparison, over-45s comprise only 40% of the population.
  • Print advertising still generates between 80% and 90% of revenues at the typical major metro daily.

Mutter asserts that newspaper publishers will never pull out of their tailspin unless they can create products that appeal to the new generation of digital natives who can’t be bothered to drag around paper, CDs or books. For them, the phone and the tablet are their windows on the world, and that will change industries ranging from news to travel to banking.


Plans to increase or decrease Facebook time in 2013There are always ways to make statistics say what you want them to say, of course. More people read a newspaper than visited a social network in the past month, according to KPMG International. Traditional electronic channels fared even better: 88% of respondents to the survey said they’d watched TV in the previous month and 74% said they’d listened to the radio. That compares to just 57% who had tweeted or Facebooked. The survey measured habits of more than 9,000 people in nine countries. It did not ask how much time respondents spent with each media.

There’s some evidence that the novelty of Facebook is wearing off. A new Pew Research study finds that 28% of Facebook users say the site has become less important to them, and a third have cut back on the amount of time they spend on Facebook. Asked about their plans for allocating time to Facebook in the coming year, 38% of 18-to-29-year-olds said they’ll cut back, compared to only 1% who plan to spend more time.


And speaking of Pew, another recent study finds strong support for a bastion of the print world: libraries. More than half of Americans 16 or older visited a library during the past year, and of those who did, 26% plan to increase library usage during the next year while 22% plan to cut back. Asked if libraries should clear out some of their book stacks to make way for more technical resources, 36% said definitely not, compared to 20% who supported such a change. It would appear that while print may be on the decline, the role of the library as a community gathering place is still secure for now.

Miscellany

Writing in Scientific American blogs, Frank Swain tells of  a new initiative by the Royal Statistical Society’s BenchPress project to teach young journalists how to interpret statistics. The program sends volunteer working scientists into schools and newsrooms across Britain to help ensure that “journalists produce science news stories that are as robust and accurate as possible.” This seems like a great idea to us. Any yahoo with a SurveyMonkey account and a mailing list can field a survey these days, and publishing tools make the results look like they came from Gallup. Scientists complain of having to squeeze the conclusions of complex research studies into tweetable sound bites in order to get attention – and more funding. There’s so much bad research out there, and statistics isn’t a core part of the curriculum at many journalism schools. Maybe it should be.


The Washington Post has come up with a “Truth Teller” app that compares statements made by public officials and corporate spokespeople to databases of facts in near real time. The project, which was funded with a $50,000 grant from the Knight Foundation’s Prototype Fund, is said to be able to extract audio, convert it to text and then conduct searches based upon the content. We’re somewhat skeptical, given that our Google Voice app still converts all our voice-mail messages to Martian, but maybe the Post found better technology.

The video below tells more, and stresses that this is a prototype. The technology is ultimately intended to be used behind the scenes to help reporters more quickly scope out falsehoods. We see huge potential for politics and mischief with this technology. Imagine a CNN vs. Fox “Leaderboard of Lies” or a plug-in that tweets falsehoods in real time. That we would follow.

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By Paul Gillin | January 17, 2013 - 9:22 am - Posted in Advertising, Business News, Demographics

People have debated for some time what is the average age of a daily newspaper reader in the U.S. Eric Alterman said it’s 55 in a 2008 piece in The New Yorker, and the consensus is in that range. Now Alan Mutter has run some Pew Research numbers and looks at the number another way.

According to Pew, less than 10% of people under the age of 30 reported that they had read a newspaper the previous day. In comparison, nearly 50% of adults over 65 had done so. Seventy-four percent of U.S. newspaper readership is concentrated in people over the age of 45, while that age demographic group represents only 39% of the population. And that group is getting older and dying while the under-45s are not.

What do all the numbers mean? “The industry is failing to replace older readers with younger individuals,” Mutter writes. “At some point, the newspaper audience may contract so severely that (a) publishers cannot attract enough advertisers, (b) publishers no longer enjoy the economies of scale necessary to print profitably or (c) both of the above.”

Few advertisers want to reach people over the age of 50, and almost no one wants to reach 65-year-olds. People in that age group often live on fixed incomes, have no children at home and very modest spending needs. They buy very little. Yet this is the core audience newspaper publishers have to sell to their advertisers.

A few years ago, Golin Harris CEO Fred Cook quoted an unidentified Chicago Sun-Times columnist as saying, “Newspapers aren’t dying; our readers are.” Whether a columnist actually said that or not, it’s an apt summary of the problem all mainstream media face. Watch the 6 p.m. network evening news some evening and look at the ads. They’re for pharmaceuticals, insurance and erectile dysfunction aids. Those advertisers know who the audience is. In 2010, the average age of a regular evening news consumer was 53, according to Pew. Where is that audience in 20 years? Where will the advertisers be?

The news industry’s challenge is to find products that appeal to young readers, but that requires taking risks, which is not something news executives are wired to do. The one saving grace could be that a lot of news organizations have laid off expensive senior staff and replaced them with young reporters. Perhaps those people will bring forth the ideas that enable the industry to grow again.

 

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By Paul Gillin | December 14, 2012 - 9:32 am - Posted in Advertising, Business News, Newspapers

Statistics portal Statista (which we rate officially awesome) has this graphic showing that Google’s advertising revenues now exceed those of the entire print media industry put together. “Google, a company founded 14 years ago, makes more money from advertising than an industry that has been around for more than a hundred years,” writes Felix Richter. It’s actually more like 300.

The comparison isn’t entirely fair. The chart shows Google’s global gross global sales against the U.S.-only print business, and Google did pay some $4 billion in commissions to media partners. But still…

More on Slate.

Google Ad Dollars Exceed U.S. Print Media Industry

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