Where Print went wrong…sorry Digital Ad Networks

Print has had a double whammy when it comes to revenues. One is their fault which was free news sites with digital ad networks, the second was out of their control – Craig’s List which killed the Classified Ad revenue source.

But first I want to do a quick review of the past vs. the present.

Before the Internet if you wanted news most major cities had 1-2 newspapers, 3 major TV networks that did world, national and local news, and the radio. They competed within each market for eyes and ears and were pretty much protected from non-local competition.

With the Internet what has evolved is that every news source competes now globally. Using my own example growing up my family watched the TV news outside NY City and we subscribed to Newsday. I moved to LA and subscribed to the LA times and also watched Network News. Over time I now read the Digital Versions of the LA Times, NY Times, Economist, BBC, Washington Post, and Huffington Post. I never watch Network TV News. I do watch the Daily Show live and online. I also listen to news Podcasts from the BBC, NPR, and Economist. I read the print versions of Business Week, Fortune, and Rolling Stone. I also read local Entertainment Papers like LA Weekly, Village Voice, etc. All this accounts for 85% of my news consumption.

So now print competes world wide. And seriously I have estimated an industry maximizes competition and productivity when there isn’t 500,000 competitors. So there will be a shake out eventually where many cities have no major print newspaper such as San Francisco, Boston, and Denver already deal with.

Prior to the Internet we all agreed to pay for print versions of news sources. Then came the Internet and this idea of Digital Ad Networks evolved. By not charging a subscription for Online viewing of news they lost a revenue stream. Now granted if I pay $0.50 for a print paper that is just subsidizing the true cost of printing and distributing. The rest comes from Print Ads. So removing the physical print and distribution they could charge less than the $0.50 and break even on that portion.

But the Digital Ad Networks promoted a lie to the Print Industry. That their Ad Distribution Networks are better than Static Ads on Print Pages (like a pdf would be). And this was the huge revenue killer. They lost control of this part of their revenue stream. Computer OEM’s, Software OEM’s, and Internet providers make no extra money if Ads are blocked, like Firefox allows. 700,000 downloads of Firefox’s Ad Blocker Plus happen each week for the browser with 22% market share. Viruses have people fearful of interactive ads. I myself use No Script which prevents Java from running on websites unless I allow it. So while I disable Ad Blocker on sites I get free content from, the actual Ad Networks are all prevented from running on my browser because I have had virus infections before.

Since all the players mentioned before are out for themselves. Print has been left high and dry.

The true solution for this would be that Newspapers etc charge a nominal fee for a subscription. And their pages served to E-Readers should be static with Ads just like Print Ads. This way when I read Page 4 of the NY Times it views just like the hard copy of the paper would. This would guarantee impressions and increase CPM’s. Why should a Brand or Marketer pay more, if 1] their Ad is blocked by 1 of 5 browsers? 2] They have even less proof an Ad was seen.

I know the rebuttal. Static Ads will prevent click throughs reducing the increased value and creativity they offer. But seriously now. Click Throughs? You mean the 20 average per 10,000 page views? But seriously now. Most of us use a search engine to find website sites, type in URL’s directly, get linked via social media, or we go direct via a book mark. Leave your creative interactive consumer engagement effort for your web site. Make it easy to get there. And boom increased R.O.I.

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About chiefalien

Howie Goldfarb with 20 years of Sales and Marketing experience founded Blue Star Strategic Marketing in central Vermont to serve as the objective and strategic adviser of brands to help them grow and thrive. His Degree in Finance and 14 years of B2B sales to Fortune 500 companies gives him a CFO’s view of marketing. Thus bringing a dose of reality to the confusing world of jargon, spin, and hype. Also playfully known as the Chief Alien of Blue Star Strategic, Howie relishes his role as an industry outsider. A native New Yorker and former Angelino, he currently lives in the Green Mountains of Vermont and is still seeking his first moose sighting. His passions are living life, art, music, the outdoors, he tries to cook and loves the Vermont Fresh Network – local sustainability initiatives like farm to table and buying local.
This entry was posted in cpm, craigs list, digital ad networks, e-readers, internet, podcast, print, Tablets. Bookmark the permalink.

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