Tag Archive | journalism

How the Internet and Advertising Technology Destroyed Newspapers.

Newspaperdeathwatch.com” dedicates itself to “chronicling the decline of newspapers and the rebirth of journalism,” and tracks an ever-growing list of newspapers that have gone bankrupt since 2007 when the site began. Dozens of revered daily newspapers have closed their doors in the wake of one of the most pronounced cases ever of technology disruption of an industry. All newspapers, especially those that focus on local news, have faced shutdown or drastically downsized operations.

The reason for this decline has less to do with the fact that readers consume news on their computers, tablets, and phones as most people suspect. Readership numbers are not down; if anything, total reader numbers have surged since the internet has made content more accessible for local newspapers. Rather, the decline has occurred due to fundamental issues of supply and demand of “advertising inventory,” which represents total, sellable available advertising space. The internet, as well as advertising technology, has created infinite advertising inventory in a world that previously had a finite amount inventory, all of which sat with newspapers and magazines.

Newspaper Advertising Revenue
In 1994 if a brand wanted to reach a national audience that reads news, or on a specific day (rather than a weekly or monthly magazine), that brand could advertise on either The New York Times or The Wall Street Journal, and to an extent The Washington Post and USA Today. Advertising inventory to target newspaper readers was scarce, and limited to these newspapers with a broad reach. Newspapers contained a fixed amount of pages and square inches that could house advertisements, and with this limited supply came a high price for advertising space, and incredible power and influence for these newspapers. Rumors of the golden age for advertising salespeople include tales of newspaper ad salespeople being entertained, perversely, by brands that hoped to be moved up a “wait list” for advertising placements. Life was good for newspapers.

As the internet grew exponentially in the late 1990’s, so did the amount of advertising inventory. Any person with an internet connection and a blog was technically a “publisher,” and could procure content to a large audience similar to a newspaper. With more content came more advertising inventory, and suddenly major newspapers were no longer the sole purveyors of this finite source of advertising inventory. Advertising inventory could be found everywhere on the web. In 2003, Google opened the advertising floodgates by creating a network called “Adsense” that allowed publishers (even your roommate with a video game blog) to sell advertising space, and in a way that would be more “targeted” than newspapers. An advertiser that only wanted to advertise to video game buyers could do so a lot more efficiently by running on your roommate’s blog than he could on, say, the Wall Street Journal.

With these innovations, in an extremely simple “supply and demand” scenario, the supply of advertising inventory surged, so the price of advertising space dropped considerably. Much of this expanded inventory came at the hands of Google Adsense and a few other networks. Surprising to some, roughly 95% of Google’s revenue (which was $50 billion in 2012) comes from advertising. Google is, at its core, an advertising company.

Because the value of advertising units has plummeted, newspapers today simply drive less revenues, whether print or digital. And the unfortunate newspapers with operations that require higher prices for advertising sales than the market was paying, found themselves underwater and on possibly newspaperdeathwatch.com. Hit especially hard were the local, smaller newspapers that could not attract advertisers the way that larger, farther reaching newspapers could.

In the next article I will explore how advertising technology, despite bringing an industry to its knees, is now rewarding and leading a resurrection for premium newspapers that have a strong brand and broad reach.

Tripp Weber graduated Johns Hopkins in 2009 with an International Relations major and Entrepreneurship and Management Minor. He currently works as an Advertising Manager for the New York Times.

– Tripp Weber

Why Kate White Is Leaving Cosmopolitan

It’s no secret that Cosmo is at the top of its game. In a New York Times Magazine article published over the summer, Edith Zimmerman revealed that Hearst publishes 64 international editions of the best-selling magazine in 35 languages, each edition promising “Fun, Fearless, Female” content in every issue. Though the late Helen Gurley Brown may have been responsible for establishing the magazine’s sexy tone, international readers can credit Editor in Chief Kate White for increasing the magazine’s circulation and presence abroad. White, who announced her resignation last week, officially stepped down today.

Succeeding White is Joanna Coles, the Editor in Chief of fellow Hearst publication Marie Claire. Coles gave Marie Claire a facelift by whisking Elle‘s Nina Garcia (of Project Runway fame) to the magazine as Fashion Director — thus shifting the prize winner’s feature from Elle to Marie Claire. Coles further earned cred with the fashion crowd when she became a mentor on the show’s spin-off, Project Runway: All Stars, earlier this year. Coles knows a thing or two about using television to bolster a magazine brand — in 2009, the Style Network’s Running In Heels chronicled the adventures of three Marie Claire interns. Marie Claire‘s largest-ever September 2012 issue boasted a record 237 ad pages for the publication. It’s a safe to say that under Coles’s leadership, you’ll see a more fashion-forward Cosmopolitan on your TV screens.

White, meanwhile, plans to focus on her writing and speaking career. In her new book, I Shouldn’t Be Telling You This: Success Secrets Every Gutsy Girl Should Know, which hits bookstands September 18, she advises, “A sign you’re ready to leave [a position] is when you’re totally comfortable at a job because you’re totally comfortable. Nothing scares you, meaning you’re not challenged.” I wish all the best to White and Coles as they embrace the challenges that come with their new positions. What can you learn from Cosmo’s business success?

– Devin