The Internet Giveth, The Internet Taketh Away
Though I have to admit that I stopped reading this Vanity Fair article about Arthur Sulzberger Jr. about halfway through because it’s full of anonymous quotes that question his character (which really isn’t of much interest to me). However, towards the beginning there is an interesting quote from a Citigroup report: “The Internet has taken away far more advertising than it has given.”
I was thinking about this a little today and realized that classifieds sits at the heart of the issue. While most people forget all about it when they discuss advertising, in 1997 it accounted for just under 41 percent of newspaper ad revenue while today it’s about 29 percent and dropping fast (year-on-year drop was almost 30 percent in 2008). To be honest, I have trouble believing it’s even that high. After all, if there’s one thing internet advertising can deliver on, it’s direct response.
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I’m not clicking through to VF, thanks for the warning. ;)
I have to take a stand against the Citigroup quote. The internet has added to advertising, as far as I can tell. Sure, it’s not printed on a tree but it’s there, nonetheless. Classifieds? Do I even need to say where to go?
Newspaper ‘content’ never paid the bills, unless you include the classifieds as (user generated) content. That’s the stuff that put food on their tables.
I think we, as a society, Need honest journalism. We need the ’4th Estate’ – but the businesses who have employed those journalists for the past couple of hundred years need to get a clue. Rather than fighting ‘new media’ or whining about revenues lost to some guy named Craig, they should be integrating what they can, innovating the rest.
Printing on dead trees for public consumption is… well, it’s dead.
Newspapers did so many things wrong for so long. They acted like typical monopolists and squeezed their stranglehold on the local market rather than focus on what their customers need. It’s no surprise that alternatives like Craigslist, Google and Yahoo succeeded so quickly by giving advertisers looking to reach a local market much better options at a lower cost. In the meantime, newspapers just tried to protect their artificially high margins. The Internet could be substituted into Warren Buffet’s quote: “It’s only when the tide goes out that you find out who has been swimming naked.” The Internet’s doing that to industries that had business models based on artificial scarcity.