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.

If you’ve got one of these…

…why would you not get a Facebook page for your business or organization?

Here are four reasons why a Facebook page is better than a Yellow pages ad, and why it’s not even a close call.

  1. A Yellow Pages ad is expensive. A Facebook page is free.
  2. A Yellow Pages ad typically has a distinctive cast that suggests jaundice. Color is even more expensive. Your organization’s logo (or other photo) goes on your Facebook page in full-color for free.
  3. A Yellow Pages ad is limited to text and maybe a photo or two. A Facebook page can have unlimited photos, not to mention videos. (Well, I guess I did just mention videos.)
  4. A Yellow Pages ad reaches a limited geographic market. Anyone in the world can see your Facebook page, except for citizens of repressive political regimes or employees or corporate regimes with a blocking philosophy.

I could go on, talking about how on Facebook your best customers can interact with you and share the love with their friends, while a Yellow pages ad is static. And how the paper directories can get lost on a snowy doorstep (at least here in the frozen tundra.)

I’m certain those with a proprietary interest in Yellow Pages (or Yellow Book, or whatever post Ma Bell-breakup variety you have in your area) would be quick to point out how they also have online directories as part of their package.

But that misses the point. The yellows used to have monopolies when people were looking for a particular category of service. It was expensive to produce a paper directory and deliver to every household in an area.

Now with Yelp and Angie’s List and countless other similar sites, it’s easy for potential customers to get information (including contact phone numbers) for local service providers.

And don’t forget local search in Google.

My point is not to run down the yellow directories, or to say you shouldn’t use them. That’s a call you have to make. Maybe they work for you, and should be part of your mix. If their publishers are doing their jobs well, they should be continually adding features to improve their value proposition.

But if you’re spending substantially for Yellow Pages, why wouldn’t you use the free option, too?

Wisconsin AAF Presentations

I have the pleasure today of doing presentations in Green Bay and Madison, Wisconsin for local chapters of the American Advertising Federation. Here are my slides for the breakfast presentation in Green Bay and the noon luncheon in Madison. You can follow (or contribute to) the Twitter discussion at #AAFWI.

I welcome your comments and questions. And if you’d like to get more in-depth learning about social media, see the Enroll Now page.

The Danger of “Core Competence”

Among the books I’ve been devouring recently is The Innovator’s Solution: Creating and Sustaining Successful Growth by Clayton Christensen. (I highly recommend it!) As I was listening to the unabridged audio version, the following statement — though read in the same measured tones as the rest of the tome — screamed its relevance:

Core competence, as it is used by many managers, is a dangerously inward-looking notion. Competitiveness is far more about doing what customers value than doing what you think you’re good at. And staying competitive as the basis of competition shifts necessarily requires a willingness and ability to learn new things rather than clinging hopefully to the sources of past glory.

The challenge for incumbent companies is to rebuild their ships while at sea, rather than dismantling themselves plank by plank while someone else builds a new, faster boat with what they cast overboard as detritus.

The context of the statement is a discussion of companies that outsource elements of their product or service that they perceive to be less important. For example, in developing its PC in the early 1980s, IBM outsourced both its microprocessor (to Intel) and its operating system (to Microsoft.) This enabled IBM to catch up with Apple, but in the process it handed over the two most significant revenue streams and sources of profit to others. Today Intel and Microsoft are still earning billions of dollars a year from the PC business, while IBM is no longer making PCs.

This is relevant not only for our organizations and employers as a whole but also for us as individuals, and now I’m speaking directly to those involved professionally in communications, public relations, marketing, advertising or related disciplines. 

I wish I had $82.43 for every time I’ve heard someone say, “All you need to do to use social media in your business is hire some young kids, just out of college. They really understand this stuff.” As the father of two relatively recent college graduates, I appreciate the job opportunities such a statement offers. But I offer a word of caution.

You need to understand social media yourself, and not dismiss them as being outside your “core competence.”

OK, that was 17 words. But the point is that as social media grow in importance over time, and as the audiences for mainstream media shrink, if you fail to adapt your “core competence” will become less relevant. That means less marketable.

By understanding social media, you will see how they can be applied to solve your business problems, or perhaps even as a whole new business model. Otherwise, as Christensen indicates, you will find yourself disrupted by low-end innovators.

To think more about the implications of disruptive innovation, get The Innovator’s Solution or anything else Christensen has written. I’m particularly looking forward to reading his books about health care and education.

To learn how to apply the sustaining (and in some cases disruptive) innovation of social media to your work, you’re at the right place already. Become a SMUGgle and we’ll learn and share applications together.

Book Review: What Would Google Do?

I’m almost done listening to the Audible version of Jeff Jarvis’ new book, What Would Google Do?  I’ve long been a reader of Jeff’s Buzzmachine blog, and so had eagerly anticipated his book. 

I wasn’t disappointed.

As a former media critic for People and the founding publisher of Entertainment Weekly, Jeff knows “old media” and has been thinking in public on his blog for several years about newspapers and other mainstream media can adapt to the realities of the Internet age. In WWGD?, he applies the new rules he’s observed to various other industries as well. I haven’t gotten to his recommendations for health care yet. That might deserve a separate post.

(As an aside, check out Jeff’s post on Buzzmachine today, in which he estimates that today’s print edition of the New York Times is $2.6 million short of the paper’s target for display ad revenue. That’s for a single day! And the Times reports today that the Boston Globe is losing $85 million a year.)
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