Traditional media fights with its back to the wall

SO should we all just go home? If last week’s heavyweight Internet Trends Report is to be believed, traditional media is doomed. The document, prepared by Kleiner Perkins’ Mary Meeker, is regarded as one of the world’s most influential annual reports on tech, media and global trends.

And it said that newspapers are more screwed than ever.

This is because of the one-way migration in ad revenue away from ‘legacy’ media to online ‘platforms’.

In short, money from ads will continue to shrink for TV, radio and — particularly — for print newspapers. And little of it will go to online media publications, landing instead on social media sites and search engines.

Meeker sums it up in one terrifying slide. It shows how “legacy media” (including this journalist) remains “over indexed” by advertisers.

In other words, we newspapers still get way more money than we’re due according to the number of eyeballs we attract.

For example, 4pc of a person’s media consumption consists of looking at newspapers, according to Meeker. But we get 16pc of the available ad revenue.

By comparison, a quarter of our daily media attention is now fixed on smartphones. But they still only get 12pc of the ad revenue.

The report strongly suggests that this disparity is artificial and is about to be rebalanced. Ad revenue, it intimates, will slide naturally from print to mobile to better reflect time spent on each platform.

It’s a €20bn “opportunity” for advertisers who realise this, says Meeker.

For us in newspapers, it’s not just a case of ‘going online’, either. The Internet Trends Report brutally highlights the winners and losers of the online ad market. Google and Facebook, it shows, now have fully three-quarters of the online advertising market. The rest of us are just scrapping for the choicest crumbs.

The stark economic message from the Meeker report is that if we in “legacy” media think that things are commercially tight now, they’re about to get worse. Much worse.

So is there any hope at all? What are we in the traditional media supposed to cling to against the backdrop of such doomsday predictions?

I can think of a few. Straight comparisons between ‘eyeballs’ on print products and smartphones don’t always work. It’s not just sentimental middle-aged advertising account managers who keep print advertising environments trading at a premium to online ones.

For example, print products are (usually) purchased. That makes them more valued. So you’re probably incentivised to pay more attention to what you’re flicking through. In the same vein, newspapers still have a prominent role as agents of discovery and serendipity. You’re buying it to be served a selection of ideas and stories so, in theory, an ad may have a heightened impact compared to one on a mobile Facebook stream.

There are some problems with valuing online ads, too. The Internet Trends Report cites figures showing that 81pc of people mute video ads, while 62pc are put off by them and a whopping 93pc think of ad blocking software when they see one. (Other research from Dublin firm PageFair shows that one in five Irish people now prevent all online ads through ad-blocking software.)

But this is not to give false hope to fellow newspaper colleagues. The basic reality is that our phones have come from nowhere to become our primary media devices. Ad revenue cannot but start to reflect that in the coming months and years.

And newspapers, by and large, must start to come up with better answers than they have been able to muster up to now if they want to survive. This means answering some basic existential questions about what newspapers are and how we mean to reach the people we want with the information we want.

“The truth is most publications are trying to do a little bit of everything, gain more revenue per user here, reach more users over there,” writes Ben Thompson, author of the weekly Stratechery newsletter. “However, unless you’re the New York Times (and even then it’s questionable), trying to do everything is a recipe for failing at everything. These two strategies require different revenue models, different journalistic focuses and even different presentation styles.”

Like many who are not tied into the traditional media business, Thompson argues that niche media ventures can attract significant commercial revenue — through premium ads and native content that doesn’t annoy people — if they are delivered at a genuinely expert level.

For the rest of us, Thompson’s prognosis is sobering and even depressing. We should start fusing basic editorial and advertising functions far more, he says.

“What makes Buzzfeed’s advertising agency business model so effective is that their editorial and advertising teams do the exact same thing the exact same way,” he says.

“Publications that seek to imitate their success… need to start with their business model. The future of journalism depends on embracing what far too many journalists are proud to ignore.”

‘Trying to do everything is a recipe for failing at everything. The strategies require different revenue models, different journalistic focuses and different styles of presentation...’