Digital Advertising Tipping Point in Sight

 

Screenshot of NY Times Facebook page.

Screenshot of NY Times Facebook page.

Newspapers’ digital efforts — in advertising and content — have been well chronicled lately. However, there’s some recent information that indicates that a watershed moment is within reach.

An analyst blog post on Nasdaq.com (dated 7/13/15) gave a revealing breakdown of The New York Times’ advertising revenue. The Times — likely the most prominent general-circulation newspaper in the U.S., and one of the most influential — seems to be within a few years of making digital advertising its leading source of ad revenue.

The blog post noted that online ad revenue accounted for 28.2 percent of total ad revenue, up from 24 percent in Q1 2014. Like most newspapers, the Times gets most of its ad revenue from its print edition. This is a well-known struggle for newspapers — how to monetize the digital editions that readers prefer, and remain profitable.

So the question: How soon will the Times’ digital ad revenue lead the way?

No way to know for sure. But if the 4 percent year-over-year figure holds, the Times’ digital ad revenue could reach the 51 percent mark in about five years.

But financial growth often is exponential, not linear, especially given the way the Times’ digital efforts are progressing. The same blog post noted that paying customers for the Times’ digital product — readers, not advertisers — are at 957,000, up 20 percent year over year. With that type of growth, the Times well could grow its digital ad revenue by more than 4 percent a year. (Feel free to check my math.)

So the Times is on the right track. But there still are many industry observers who think the  Times is still being too timid in pushing its digital product. (I’m one of them.)

Internet guru Robert Scoble posted on July 18 about his session with Times Publisher Arthur Sulzberger Jr.. Scoble wrote:

I am in an interesting session about just that with Arthur Sulzberger, publisher, and Martin Nisenholtz who used to run digital there.

It is interesting to hear some of the ideas.

I am concerned that very few people read quality journalism. Only nine million on Facebook have liked the New York Times here on Facebook, out of 1.45 billion.

If I owned the New York Times I would be totally focused on fixing that.

Good point. If the Times got even 5 percent of Facebook’s registered users to “like” the Times page, that would be at least 50 million potential viewers for every Times story posted to Facebook, a substantial increase. More online viewers mean more online ad revenue.

Along these lines, the Times’ Facebook page was not even among the 10 most-shared sites on Facebook in June 2015. That’s also dropping the ball.

The Times’ argument against this likely would be that it doesn’t want to become too dependent on Facebook. But I say this is the kind of “denial thinking” that allowed the Times and other newspapers to get blindsided by the Internet to begin with.

Facebook is leading the way in readers’ and consumers’ attention online, both mobile and desktop. Go with the trend. There’s nothing to stop you from also having your own website and print product to cover other bases.

So the Times has a key financial goal within its reach. It will get there sooner if it pays more attention to what is already working.

— What’s your take on newspapers’ online efforts, desktop and mobile? Leave a comment below.

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About Steve Burns

I live in the Atlanta area. I also lived for many years in Southern California. I'm into mainstream media, social media, sports, business and politics. I worked for AOL's Patch, but this is my personal blog. I'm on Twitter (@bsteve76), Facebook, LinkedIn, Instagram and Pinterest. See ya 'round!
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One Response to Digital Advertising Tipping Point in Sight

  1. Pingback: Digital vs. Print Advertising: Tipping Point Update | Human Clipping Service

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