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1.2 Newspaper Industry

The newspaper industry is facing declining profitability and mounting losses due to a decline in print circulation and advertising revenue. Print circulation is falling as readers move to online news aggregators and newspapers' own free digital content. Advertising revenue, which makes up 80% of newspaper revenue, has declined 50% from 2005 to 2011. This is partly because advertisers are taking budgets to new online media. While digital newspaper advertising is growing, it also risks cannibalizing print ad revenue. As a marketing director, key actions would be to analyze reader and advertiser behavior to understand how to maximize revenue from digital while limiting print losses.

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Kartikey Garg
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66 views9 pages

1.2 Newspaper Industry

The newspaper industry is facing declining profitability and mounting losses due to a decline in print circulation and advertising revenue. Print circulation is falling as readers move to online news aggregators and newspapers' own free digital content. Advertising revenue, which makes up 80% of newspaper revenue, has declined 50% from 2005 to 2011. This is partly because advertisers are taking budgets to new online media. While digital newspaper advertising is growing, it also risks cannibalizing print ad revenue. As a marketing director, key actions would be to analyze reader and advertiser behavior to understand how to maximize revenue from digital while limiting print losses.

Uploaded by

Kartikey Garg
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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State of The Newspaper Industry

 1
News Media Platforms… Ubiquitous and
Complex

Marketing Newspaper
Efforts PRODUCT
S

Marketing
Advertisers Efforts

Increase in Ad
content

Ad Space more
attractive

Subscribers

 2
State of the Newspaper Industry

• Current trend
– The good – Declining profitability
– The bad – Mounting losses
– The ugly – Spate of bankruptcies

• There is growing speculation/concern that the print media,


especially, print newspaper might be dying.

 3
Print Circulation is Declining

o Loss of readers to online news aggregators.


o Cannibalization of print readership by their own free
digital content.

 4
But Ad Revenue Declines Have Hurt the
Most
Advertising and Circulation Revenues at Newspapers Over Time
60,000

50,000
Revenue in Millions of $

40,000

30,000

20,000

10,000

-
2001 2002 2003 2004 2005 2006 2007 2008 2009
Ad Revenue (Millions of $) Circulation Revenue (Millions of $)

o Advertising is 80% of newspaper revenue.


o Advertising revenues decline by 50% (2005- 2011).
o Circulation revenue declined by 6.6% (2005-11).

 5
Why is Print Advertising Revenue Declining?:
Outside Media Landscape

ONLINE ADVERTISING REVENUES OVER TIME


35

30
TOTAL ONLINE ADVERTISING
25
(Billion $)
BILLIONS OF $

20 SEARCH AD REVENUE (Billion


$)
15 DISPLAY AD REVENUE (Billion
$)
10

0
2004 2005 2006 2007 2008 2009 2010 2011

• Advertisers simply taking their print ad budgets to new media


options?
 6
Silver Lining… Digital Newspaper Advertising

But, the hope is online


newspaper advertising will
grow and create synergy.

60

50

40

30
46.7 47.4 46.6 42.2
44.9
20 34.7
24.8 22.8 20.7 18.9 17.3 16.4
10

0 1.2 1.5 2 2.7 3.2 3.1 2.7 3 3.2 3.4 3.4 3.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Digital Print  7
But there are cannibalization concerns
The cannibalization of print ad revenues is also a problem. One common
scenario is that a trusty local print advertiser -- a car dealership, say -- that
used to spend $20,000 a year on advertising might now spend a quarter of
that with the newspaper online and nothing in the print product. Thus, the
newspaper company is now selling more digital ads, but the new sale is
taking away from its bottom line.- WSJ, July 31, 2008

And newspapers need to understand paywalls

 8
Role of Marketing Analytics?

• Assuming you are hired as director of


Marketing Analytics/Intelligence for a Top 50
US Newspaper today
• Take a few minutes to list 2-3 key strategic
marketing actions you will pursue
– But also list why!

 9

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