Tag Archives: advertisement

How does Disruption look like in Print Media

Not because you already anticipated it, it’s less of a dramatic picture. The chart from Statista shows the result of how technology reinvents industries.

In 2004, Google’s $3Bn business seemed nothing compared to a $70Bn industry. Only eight years later, Google is bigger than the entire Print Media business in US.

A single company — let’s call it the disruptor— is worth more than the entire industry it disrupts, in less than a decade!

Though it is the company that gets more attacks from the newspaper and magazine industry, Google was not the only one driving the change.

  • Some years ago when you wanted to sell a car or a house, there was one obvious place to advertise: Newspapers. Nowadays you would only think of eBay, Craigslist or Carlist.
  • Bloggers were the first to grab readers from traditional media, though Google Adsense dollars helped here.
  • Then came the big social media boom with Facebook and Twitter attracting eyeballs from other media.
  • And finally, also contributing to the decline in offline revenue, Print Media has gone online, though they have not been too enthusiastic about exchanging “paper ads dollars by online cents.”

Print and online magazine advertising spending in the U.S. from 2010 to 2016
You will find more statistics at Statista

After disruption, is the resulting market smaller or bigger?
U.S. Print Media went from a $72bn peak in 2006 to $42bn in 2011. Where has all that money gone? Online, right?

According to GroupM, online ad revenue in US in 2011 was $34.5Bn (*). You make the numbers and that means that the size of Print Media + Online combined add to $76Bn. Around same market size as in 2006.

Roughly, you could conclude the combined market of “disrupted + disrupting” has not de-materialized the industry.

Jobs: A collateral damage of disruption?
The most visible effect in jobs is the change in skills and preparation. New jobs online require more preparation than those in the old industry. And for sure they need different skills.

Disruption due to new technologies often creates inflation in preparation. The lowest rank worker in the new industry will require far more preparation than in the previous one. E.g. Less skilled jobs like printing operation or distribution are replaced by technology. If you are a junior journalist you are now in the lower ranks, in the sense that the jobs less skilled than yours are all replaced by technology. You need much more preparation to be a journalist than to be a guy in the distribution chain.

On the other hand, a system like Adsense enables a bigger crowd to benefit from advertising. Now if you are a junior journalist you can join the Long Tail of  bloggers and be self-employed. Online ads, combined with indie publishing, are the foundation of the Digital Renaissance we live in.

How does print media respond to that?
Sadly enough, we have the example of France, where print media lobbies politicians to tax the innovator, in order to protect the status quo and delay the inevitable. As RIAA already demonstrated in the music industry, trying to stop change with lawsuits is not the best way to deal with disruption.

* Google makes 95% of revenues from Ads and U.S. represents 46% of their worldwide business. As Google reportedly has 44% market share in U.S. online ads, numbers are consistent.
Global online advertisement spending in 2011
You will find more statistics at Statista

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Will 2008 be the year of Mobile Advertisement?

Mobile Phones are personal devices we always carry on with us. As their media capabilities increase, mobile handsets become ideal for brands to get across their message to consumers through personalized multimedia campaigns.

So far, Operators have used their knowledge about customers mainly for SMS-based marketing, with a high risk of annoying the user with spam. As more powerful and open handsets appear – iPhone, Windows Mobile and Android-, and as Operators adopt flat-fee data plans, other promising technologies are emerging for a better user experience and ad effectiveness:

Mobile Web. Banners and contextual links are ready to take off, with Google and others occupying that space, probably bypassing Operators. Apart form the personalized targeted ads, features like click-to-call can make Mobile Web even more effective than Internet, with higher click-though rates.
Mobile TV / Video. Be it interstitial ads before clips or new formats embracing interactivity, this segment, still in its infancy, will develop intensely: Broadcast Mobile TV (DVB-H/DVB-SH) will raise users awareness and will enable broadcast channels mass distribution.
Downloadable content/apps. Many brands will see interest to sponsor downloadable content specifically targeted to a segment, with interstitials shown between games.

All these new models will require a 3G network and handsets to make them compelling. 3G handsets are lowering their cost and becoming affordable for teenagers. Teenagers are today the key segment for ring-back tones, logos and game downloads, using their 2G phones. No doubt teenagers are the ones likely to first embrace new types of advertisement. Simply wait for them to get a 3G phone.

Mobile advertisement market size in 2011 is estimated between $5 and $18 billion, depending on which analyst is consulted.

How will this market split among the different players in the value chain is still to be seen. Operators risk to be bypassed by Internet players, but let’s not forget that Operators are the ones owning the scarce resource of spectrum. If operators decide to charge data on usage, instead of flat-fee, this can be a showstopper for the mobile ads party.

NewTeeVee recently posted their “outsourced” predictions for Video Advertisement. Even if focused on Internet TV, most of the comments are also valid for Mobile Video Advertisement. Worth reading.