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Sep 4 2008 4:33PM EDT

Why Increase in Online Ad Spending Hurts Print Publishers

Blaise Zerega writes that a rising tide lowers some boats. Good news is in the eye of the beholder. Even as Internet advertising grew a robust 20% durign the second quarter -- according to a WSJ article citing stats from eMarketer, spending on banner ads remained flat. This is unwelcome news for print media organizations as they continue to grapple with the digital realm.

Search advertising -- think those little text boxes on Google, will make up $10.4 billion or 42% of overall online ad spending in 2008. Google claims about 70% of this type of advertising. Banner advertising brings in about half that amount. Other forms of advertising measured by eMarketer include classifieds, lead generation, rich media, and of course: "other." All told, 2008 spending is forecast to approach somewhere near $25 billion.

So what's this got to do with print publishers? As Jason Pontin, editor of MIT Tech Review, friend and former colleague, reminded me a few weeks ago, this situation hurts "old" media most. How? Because most old media -- yes, magazines included -- are depending on banner ads for their web sites. To date, this revenue stream has been the only thing helping turn analog dollars to digital cents. If advertisers prefer the more efficient search word ad buys, then it's just more bad news for traditional media: Analog dollars become analog cents and digital zeroes.

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