Engagement time with consumers continues to decline for traditional media, especially Print1. In 2008, US adults spent 38 minutes per day with newspapers and 25 minutes with magazines. By 2014, the time spent with newspapers dwindled to 14 minutes and magazines shrunk engagement to 12 minutes per day. During that same period, the time spent with digital media increased from 3 hours to 5 hours and 46 minutes.
The decline in print media engagement has contributed to the decline in overall advertising sales – although ad revenue hasn’t declined proportionately2. In 2013, newspapers saw revenue for print ads decline by over 9% while engagement time slipped 18%. Thus, the cost for newspaper advertisers per minute of engagement has increased. Advertisers are paying more for a scarce supply of print media exposures.
What’s more, advertiser are paying for an older demographic3. According to Pew Research, 78% of newspaper readers are 50 and over. Yet, even this audience is moving away from print. In 2008, 64% of consumers 65 and over reported reading a newspaper the day before. In 2013, that number was 55%. For those 50-64, readership went from 57% to 44%. The steady decline in readers across all age groups corresponds with Internet adoption and reflects the inevitability of digital media.
Meanwhile, the share of digital ad revenue for print media has declined as more advertisers engage online markets. As online ad revenue has grown 15%, print media’s digital growth has stayed in the low single-digits. Despite a massive inventory of exposures and an army of sales reps, traditional media still cannot persuade their advertisers to invest online. Somehow, they can convince buyers to pay a premium for a dwindling audience – yet, can’t make a compelling argument for new media. Why?
Newspapers still make 17 billion selling print ads and just 3 billion from digital. Based on historical trends, they’re still about a decade away from a more equal distribution of revenue – and that will be achieved mostly by decline rather than growth. Unfortunately, most will shut down way before an equilibrium point is reached. When operating costs are high and the value of digital exposures is low, newspapers have fewer reasons to sell online advertising. Long-term, this ensures the demise of the newspaper industry.
Ironically, the value of digital exposures is low due in large part to the efforts of print media. At its inception, digital advertising was viewed as a competitor rather than an opportunity. Because print media’s pricing structure didn’t work well on the web, the industry used its army of sales reps, ad brokers and agency partners to explain how digital exposures were ineffective. In the early years, digital ad space was routinely given away to sell print – with subtle and not so subtle disclaimers that digital ads were useless. Unfortunately, advertisers who had built their businesses and brands via traditional media believed this.
Today, the biggest enemy confronting print media is the mythology it created to protect market share at the height of its power. If online exposures have no value, traditional media has no future online. If it has no future online, it’s not likely to have one offline either. At best, it will become a novelty media propped up by wealthy patrons out of nostalgia. At worst, newspapers will survive as faded brands wrapped around automated or poorly made content. Either way, print media faces a grim future in terms of revenue, influence and stature.
The problem is that print media seems determine to prioritize its operating structure over its operating mission. The mission of local newspapers, for example, should be to serve a local community – keeping citizens informed, connecting consumers to local businesses, and providing access to local resources, etc. In the Digital Age, this can be done more effectively, cheaper and with higher levels of participation from readers online. Yet, protecting an operating structure has taken priority over serving their markets and their mission. The weight of this structure has lessened print media’s ability to add value to those it once served.
As readership declines, print advertisers must pay more to be seen by a smaller audience. The only way this can be justified is if online exposures are still thought to be worthless – or, at least, worth 600% less than newspaper ads. Unfortunately, when fewer people know you exist and you’re unwilling to engage the dominant media – your brands suffer, market share erodes and sales decline. Today, local and national advertisers who rely on print are suffering from an inability to reach consumers. This affects their future and their ability to invest further in a dying media.
With the decline of traditional media, there has been a noticeable decline in brands and branding. Since fewer people know that brands exist, more products and services devolve into commodities. Commodities don’t require extensive marketing or advertising. Commodities simply require a marketplace of buyers and a focus on price. Walmart and Costco owe much of their success to the decline of brands and branding. When companies cannot engage consumers to let them know they exist, they become anonymous. Nameless products and services are cheap and easily replaced by cheaper products and services. Brands are not.
The erosion of brands and branding isn’t unique to advertisers. Print media brands are also feeling the effects of fewer exposures and less engagement time. Online, Brand Activity can be measured and monitored. Brand Activity simply tracks the number of times consumers go directly to a site or search for branded terms (i.e, “NY Times”). Neither activity is possible if consumers haven’t had prior exposure to a brand – online or offline. As Brand Activity decreases, it indicates that fewer consumers know that a brand exists and/or actively engage with it.
Recently, The New York Times reported a 50% decline in traffic to its homepage since 2011. In response, The Atlantic and other publications have begun to herald the “Death of the Homepage” for news sites4. Fewer people are searching for media brands or going directly to a branded site. More traffic is coming from social media and news aggregators, yet this traffic isn’t translating into greater brand engagement. Instead, dependence upon “side-door” traffic is helping to transform news brands into content commodities. Now, only the “side-door” marketplaces are creating news brands around this commodity.
A few months before, research from actual consumers provided insights on the “death of the homepage”. According to Pew and ComScore5, those who go directly to a media site spend 3 times more time on the site. They visit the site 3 times more often than Facebook or aggregator visitors. They are the best customers of a media site. They are connected to the media brand enough to actively seek it out. Visitors from Facebook and news aggregators are not.
Fortunately, understanding Brand Activity and how consumers make decisions online offers print media some hope. Knowing how digital exposures shape Brand Activity demonstrates the value of exposures. Media brands are fading because their exposures from print have faded. Brands built around print are fading for the same reason. Others are growing brands online because exposures are cheap and plentiful. They know how to measure and grow Brand Activity. They benefit greatly from the myth that exposures are worthless online.
Traditional media needs to discover what Google already knows. Google knows that exposures have value. It knows that most conversions attributable to online ads happen without a click. Google knows that exposures drive Brand Activity. Google knows that brand activity drives the majority or retail sales, lead generation and profitable revenue. It also knows there’s a sea of exposures and a limited number of clicks. Thus, its future isn’t in selling clicks but exposures -- with the tools to optimize around conversions and Brand Activity.
Rather than devalue exposures to protect its search business, Google sought to understand the true value of exposures and build the dominant marketplace for advertisers. Today, Google benefits from the myth that online ad exposures have no value. This helped create an obsession with clicks and over-priced search markets. The difference is that Google doesn’t believe the myth or base its future on perpetuating this myth. Traditional media already does the work of devaluing online exposures and branding. Thus, Google is able to protect its click-based business model while growing the infrastructure of a broader marketplace. It’s already helping brands grow by focusing on digital exposures – and generating profitable ad revenue
Google and others are in no hurry to educate print advertisers on the value of digital exposures. Besides, they haven’t quite built the infrastructure to do this. Traditional media still has valuable assets that can’t be easily duplicated – namely, experienced salespeople and agency partners. They have plenty of room to grow without challenging the media establishment and its customers. They’ll grow ad revenue as traditional media declines anyway. Long-term, they can count on Old Media to follow the mythology they’ve created to bankruptcy. As print media heads toward the cliff, they have little reason to pick a fight or change their direction.
Traditional media must be the ones who prove online exposures have value for their advertisers. If print media is to survive, it must transition its mission to digital markets while it still has a brand and an audience. Proving the value of online exposures to advertisers will help publishers understand digital markets, how consumers make decisions online and the benefits of digital advertising. It will help push up digital ad prices and create opportunities to replace lost print revenue. More importantly, it will help their advertisers to reach more consumers and grow their businesses.
Seen2 helps traditional media companies re-think their digital initiatives and understand online consumers. We help partners to design and implement testing and tracking that demonstrates the value of exposures. We help identify revenue streams and to test market opportunities. By challenging assumptions and applying proven digital strategies, we help our media partners find ways to add more value to core markets.
As marketers, we prefer to learn as we engage markets – rather than just rely on third-person accounts and well-constructed theories. Through testing and probing, we develop strategic assets. Our partners learn to build stronger connections to their communities online, while supporting their print business. Through real-world testing, they're able to demonstrate the effectiveness of digital and offline exposures. What’s more, they see how digital marketers optimize around profitable revenue and gain insights from an alternative approach.
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