Google Ad Sales Double All U.S. Newspapers COMBINED

That’s the most stunning statement in a Brookings Essay “The Bad News about the News” by Robert G. Kaiser, who worked for a half-century as a writer and editor at The Washington Post. He outlines the fundamental problem of the challenge digital presents to “legacy” media:

Overall the economic devastation would be difficult to exaggerate. One statistic conveys its dimensions: the advertising revenue of all America’s newspapers fell from $63.5 billion in 2000 to about $23 billion in 2013, and is still falling. Traditional news organizations’ financial well-being depended on the willingness of advertisers to pay to reach the mass audiences they attracted. Advertisers were happy to pay because no other advertising medium was as effective. But in the digital era, which has made it relatively simple to target advertising in very specific ways, a big metropolitan or national newspaper has much less appeal. Internet companies like Google and Facebook are able to sort audiences by the most specific criteria, and thus to offer advertisers the possibility of spending their money only on ads they know will reach only people interested in what they are selling. So Google, the master of targeted advertising, can provide a retailer selling sheets and towels an audience existing exclusively of people who have gone online in the last month to shop for sheets and towels. This explains why even as newspaper revenues have plummeted, the ad revenue of Google has leapt upward year after year—from $70 million in 2001 to an astonishing $50.6billion in 2013. That is more than two times the combined advertising revenue of every newspaper in America last year. (Emphasis added.)

Some other interesting nuggets:

  • “Twenty years ago classifieds provided more than a third of the revenue of The Washington Post. Craigslist has destroyed that business for the Post and every major paper in the country.”
  • “Newspapers employed 59,000 journalists in 1989, and 36,000 in 2012 (and fewer since then).”

Kaiser’s essay does a good job of outlining the challenges faced by the big media, which is probably its most significant contribution. It’s short on solutions, but then again, that’s the real issue for the established media: if answers were apparent, the financial situation for newspapers would not have deteriorated to the extent he describes.

It’s not exactly cheery reading, but it’s at least a little less depressing than the latest news about Ebola and ISIS. Read the whole essay.

It’s also interesting for me to read this, because much of my early blogging was about trends in media, given my background in media relations. Here are a few related posts over the years:

Or you can browse through all of the related posts here.

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Author: Lee Aase

Married father of six and grandfather of seven, and the Chancellor of SMUG - Social Media University, Global. By day I'm the Director of the Mayo Clinic Social Media Network. Whatever I say here is my personal opinion, and doesn't reflect the positions of my employer.

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