The Choice Seems Clear

Seems like a situation with easy logic: advertisers should spend their marketing dollars with the medium that offers the most audience engagement, right? Well, then someone tell me why Newspapers get 20% of the marketing dollars when they only deliver 8% of time spent between the media and their audience?

BusinessInsider.com shared 2008 research from JP Morgan via their Chart of the Day post:




The Internet tops the chart in disparity of attention vs. advertising investment by delivering 38% of time spent with the medium but receiving a mere 8% of total advertising dollars.

The other big missed opportunity is Radio, only receiving 9% share of advertising budgets, but delivering 19% of audience engagement -- a virtual mirror image of Newspaper!

Certainly something to talk to your clients and prospects about as you help them plan their strategies for 2010.

BusinessInsider.com notes the numbers are from 2008, so the ad spend on newspapers is lower today-- but go on to say "it's not low enough, considering how little we spend with them."

Newspapers (Try To) Think Locally for Online Ads

Nice coverage in WSJ about challenges facing "The Dead Tree Society" as they seek to increase their share of local Web dollars.

Though the article focuses on Newspapers, one need only review the Borrell Associates chart to the left in order to realize Radio has the great potential for growth in Online Advertising.

Some of the article highlights...

Scrambling Cannibals

In an effort to make up for their plunging print-ad revenues, newspaper companies have been scrambling to train their sales teams in the intricacies of selling online ads to local marketers.
But in many cases they aren't selling a lot of ads and at least some of the new ads they are managing to sell are cannibalizing their print-ad revenues, industry analysts say. A common scenario is that a trusty local print advertiser -- a car dealership, say -- that used to spend $20,000 a year on advertising might now spend a quarter of that with the newspaper online and nothing in the print product. Thus, the newspaper company is now selling more digital ads, but the new sale is taking away from its bottom line.

Losing Their Edge

Whatever edge Newspaper may have had in capturing web revenue appears to have evaporated. Newspapers now control only 27.4% of the local online ad market, down from a 35.9% share in 2006, according to Borrell.

Cracks and Gaps

There are several reasons why newspapers so far have failed to crack this market.

• Online ads are far less expensive than print ads and thus offer lower commissions, making it difficult to get salespeople to focus on selling the digital products
• Newspaper is typically selling banner ads which don't meet the needs of local businesses
• Most local online revenue growth comes from small and medium-size local businesses -- a market segment that Newspapers have typically ignored

Read the entire article here.