Digital Ad Spend with Newspapers Projected to Grow 2.3%; Is that Enough?

By Tom Ratkovich Published May 1, 2019

eMarketer is forecasting that digital ad spend in the US will grow to nearly $130 billion this year – an increase of 19.1%. But the newspaper industry’s share of that growth is projected to be just 2.3%. We ask…is that enough to sustain the business model?

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Our Take: The answer to that question, of course, is that it is NEVER enough. As noted by eMarketer, “Prominent print media companies used to routinely reap high profit margins through their ad businesses.” Those days are long gone – and efforts to offset traditional revenue declines through digital subscriptions are insufficient for most local publishers. Cuts and consolidation have kept many afloat in the short-term, but such efforts have a finite life span. The answer – some might say the ONLY answer – lies in leveraging the publisher’s unique assets of data, brand value and multichannel consumer interactions to maximize customer value and diversify revenue.

It is precisely these assets that facilitate value maximization and revenue diversification initiatives. Start with a comprehensive, consolidated consumer database that is built from subscriber transactions, digital content consumption, newsletter registrations, contest participation, ticket and event sales and such third-party sources as demographics, lifestyle interests and purchases. Do that – and put an analytical and marketing automation platform behind it – and publishers are suddenly capable of being relevant in their subscription and engagement communications. They can effectively plan, promote and execute events. They can target multichannel advertiser communications to those consumers who will derive the most value. They can identify consumer segments that represent significant potential for the creation and targeting of niche publications. All of these promising revenue streams are vitally dependent on the publisher’s ability to deliver relevance and value.

There is no question that consolidation and considered cuts have their place. But it is simply not sustainable as a business strategy. What is? We believe a strategy based on delivering relevance and value – driven by deep customer knowledge – is a long-term opportunity that too few pursue with appropriate passion. It is only by doing so that the twin strategic imperatives of consumer monetization and revenue diversification will be realized.

 
 
 
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