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Summary:

A single chart from a presentation by internet analyst Mary Meeker illustrates why the decision to move away from print is such a difficult one for traditional media companies to make — and also why it so important that they do so.

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The past few weeks have seen some fairly dramatic moves by newspaper chains in both the U.S. and Canada, who have chosen to stop printing their papers on certain days in an attempt to save money. But in most cases this has been a result of what Ken Doctor has called a “forced march” towards digital, rather than a choice to embrace the online world at the expense of print. A single chart used by veteran internet analyst Mary Meeker in a presentation this week illustrates why that decision is so difficult: because print is still a massive source of advertising revenue. But the chart also shows why the print-based media industry is so afraid of the future — because that source is rapidly dwindling.

The chart is fairly simple: it shows the amount of time spent by users on various forms of media — including print, television, the internet and mobile — compared with the amount of money spent by advertisers on that medium. Although there are obviously areas of overlap (since most newspapers have websites that include advertising, for example) the magnitude of the gap between the amount of time spent on print media vs. the amount of money spent there is fairly dramatic. Even though people spend less than 10 percent of their time with newspapers and magazines, advertisers devote 25 percent of their spending to them.

Although the statistics Meeker uses for her chart are current, the overall trend is not new. In the version of the presentation that she did in 2010, for example, the analyst noted that about $50 billion worth of advertising was going towards print and other forms of “old” media when — based on the amount of time spent — it should be going to internet-based media (at that point, print was getting about 12 percent of the time spent by users, so it has fallen another five percentage points since then).

As that gap closes, who benefits? Probably not print

As Derek Thompson at The Atlantic notes in a post about the Meeker slide, you can look at the data presented there in a number of different ways, but arguably all of them are negative for print-based media. The most optimistic view of the gap between time spent and advertising dollars devoted to print is to see it as an indication that print is orders of magnitude more effective for advertisers than virtually any other medium — otherwise why would ad agencies and brands spend so much money there?

That is certainly the message that most print-based media outlets would like to spread, since it justifies their continued attachment to the medium. But just as likely — if not more so — is that advertisers have been slow to move their spending away from the traditional media they are used to and into new forms of content. But as Jeff Sonderman at Poynter points out, using another Meeker slide, they are picking up speed fairly rapidly.

One of the big factors keeping that trend from accelerating even faster is that there is still a lot of doubt in the industry about the effectiveness of social networks such as Facebook when it comes to advertising. Certainly the performance of traditional methods such as banner ads on Facebook remains relatively dismal — even compared to the click-through rates on normal web advertising. The social network is experimenting with “sponsored stories” driven by user behavior, but there are still some large question marks around that as well, when it comes to the return-on-investment that advertisers are likely to see.

The fact that print still drives a massive amount of revenue for traditional media players also helps to explain why so many paywalls used by publishers like the New York Times are tied to Sunday print subscriptions or other print-related offers. In addition to producing revenue from loyal readers, those deals are also designed to protect the print-subscription numbers, so that advertisers will continue to feel they are getting their money’s worth. The multibillion-dollar question is: How much longer can print maintain that sense of superiority?

Post and thumbnail images courtesy of Flickr user Zarko Drincic

  1. Randy Novak Friday, June 1, 2012

    A couple points that should be noted. 1st and foremost, I always question when I hear someone say that newspapers should embrace digital. What exactly have they been doing for the last 15 years??? Are there any newspapers out there that don’t have a digital presence??? Anywhere??? C’mon. They have the most visited web sites in most markets, they have mobile sites, they have apps, they send email, they have daily deals, they allow for auto and home searches, their audience across platforms is bigger than ever…. the list goes on and on, yet all I ever hear is that newspapers need to embrace digital. The point that gets overlooked is that the ability to monetize digital is limited, especially for newspapers, and others who create real content, by the buying/selling environment that relies on “targeted” (laughter) ad nets, aggregators who contribute little in terms of real editorial value, and frankly, reluctant ad buyers who are overly enamored by the aura of Facebook to ever consider an actual digital “media” buy. My 2nd point is about the reference to time spent on media as a valid measure of where ad spend should be allocated. It isn’t time spent that matters. It’s what is done with that time that matters. Just ask Facebook and its advertisers about that. If you want to contribute to the dialogue, let’s look at why digital is a challenge to monetize for legitimate news providers, as opposed to how they can somehow solve the riddle by simply “being more digital.”

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    1. Randy, you are right. Why “go digital” when even facebook can’t find a solution as for advertisment

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    2. newspapers dont sell paper, they sell news. Since the cost of producing and sharing news is getting low (thanks to digital format and social sharing), the utility and value of a printed media is getting lower each year. getting digital is a survival imperative. About monetizing the ads in media format, most “newspapers” or news agencies are trying to fit the old model in the new media format. It doesnt works that way.

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  2. Agree with Randy. The problem with monetizing digital is he un realsitically low cost that clients are wiling to pay dor advertising online. A magazine ad, hat i will just flip over, brings more mney to he publisher than an online ad. Clients expect some kind of click or a phone call, count the number of reactions and pay for that ONLY. If I saw a brand X ad online, even hough i did not click on it, it still registers in my brain! Aencies too have to pull heir socks up and create more compellng and engaging advertising.
    News is one of the most consumed contents, wheher on the www, print, radio or tv. Smene just needs to convince a whole bunch of advertisers to pay for it.

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  3. There’s a flaw in this chart that isn’t addressed: TV and radio require some set amount of time to consume–a TV show, a song, whatever. The amount of time spent on print is variable, based on the speed at which someone reads. It makes sense that less time would be spent on print, but that doesn’t mean the engagement is any less. In fact, it’s more than probably far higher. But that’s a question for a neurologist.

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  4. Advertisers buy because they think that the ad they buy will move the needle on sales. The huge assumption made by Meeker is that time spent is directly related to ad effectiveness. Yet she offers no evidence to that effect, nor does she even address it. Maybe it is addressed elsewhere in her presentation, but I doubt it.

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  5. Larry Grimes Monday, June 4, 2012

    Randy is right on. And I think we need a third column. Amount of advertiser money wasted on digital media. Nobody’s paying any attention unless it’s a coupon or sale ad. Ask yourself..when was the last time you clicked on a non-sale ad?

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    1. I do not agree with Randy. The way you have to monetize digital is to put a digital management team in charge; it is much easier for the digital teams to learn print, then the reverse. The product mix, the multimedia, the technical marketing, and the cost structures, are fundamentally different in digital, and you need the correct type of management team to make that work. A digital migration strategy should also include an M&A plan of pure digital assets. If you put the print guys in charge, than the outcome he describes come true.

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      1. Joe,
        I would not suggest that newspapers avoid digital. My point was that I get tired of hearing about how newspapers can solve their problems by simply being “more digital.” That shows some ignorance of what has been going on. I have a unique perspective having been on the media, agency and advertiser side. I can tell you that simply “being more digital” does not solve the problem. Newspapers have been digital for the better part of 2 decades, yet their total digital revenues are lower than they were 4 years ago. The issue is a combination of low CPMs, infinite space, time spent, low ROI for advertisers and perhaps most importantly, most agencies simply don’t look at newspaper digital offerings. Maybe that will change as Facebook seems to be losing some luster.

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  6. As I often see with media “data” this is also incomplete (as many have mentioned).

    I would like to see time spent PER SITE. We spend about 50 seconds on a website, but more than 27 minutes in a print product. We never hear about that, but it is exactly the type of engagement we should be paying attention to.

    I also see ad spend charts, but no one ever talks about the fact that there are millions of websites compared to far less TV, radio and print outlets.

    I’d like to see a breakdown of that ad spend based off of the number of inventory for each medium. It would probably come out to about $1 per website…

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  7. The problem with print and most digital is that it relies on the interruptive model. The promise of digital is that it can offer advertisers touch points that actually bring the consumer value… alas, we mostly see banner ads. There is a brighter future it we look beyond buying audiences and trying to jar them out of what they are doing to engage with our brands. Humans are born consumers, it’s not hard to catch us in the act of shopping. That’s when we are most receptive to brand messages. http://www.johnhaake.com/2012/05/advertising-neednt-be-so-creepy/

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  8. Kevin Horne Monday, June 11, 2012

    so many smart people comparing apples to oranges – people’s time versus media spend.

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