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Wednesday, April 10, 2013

American Newspaper Media Industry Revenue Profile 2012

http://www.naa.org/Trends-and-Numbers/Newspaper-Revenue/Newspaper-Media-Industry-Revenue-Profile-2012.aspx

Overall, total revenue for U.S. newspapers declined by 2% in 2012 from a year earlier, according to new data compiled by the Newspaper Association of America.

In total, the U.S. newspaper media industry took in $38.6 billion in 2012 compared with $39.5 billion in revenue in 2011, according to NAA’s projections.

The numbers reveal that while advertising revenue continues to decline—down 6% in 2012—several other categories of newspaper media revenue are now growing. Circulation revenue grew 5% in 2012, while a host of new revenue sources not tied to conventional advertising and that barely existed a few years ago grew by 8%. These new revenue sources, which include such items as digital consulting for local business and e-commerce transactions, now account for close to one-in-ten dollars coming into newspaper media companies. They are significant enough in scale that NAA has begun to collect detailed data about these revenue categories and track their trajectory year-to-year for the first time.

The new data offer a more granular and comprehensive picture of how newspaper media are operating today than was previously compiled by any source. This more complete accounting identifies approximately $6 billion in additional revenue, $3 billion that was not counted before and another $3 billion that did not exist a few years ago, comprising about 16% of all newspaper media revenue in 2012.

The numbers portray an industry that, faced with significant disruption in the last decade, has begun to measurably change its essential revenue model. That has begun by turning more to circulation, to digital, and to developing new revenue sources.

“America’s newspaper media are transforming themselves,” said Caroline Little, NAA President and CEO. “In virtually every community they serve, newspapers have the biggest newsrooms, the best-known brands and significant audience market share. Now they are building on those to find new ways to serve audiences and local businesses.”

The overall composition of newspaper revenue, the data show, has thus also changed. Based on data from companies that provided detailed breakdowns, circulation now makes up 27% of total newspaper media revenue, new revenue sources 8%, digital advertising 11%, niche publishing and direct marketing 8%, and print advertising 46%.

These are among the findings of NAA’s annual revenue review of the industry. The data are collected from some 17 companies, private and public, that represent a broad sample of daily newspaper operations across the United States. As it has for many years, NAA uses the sample to project total revenue for the industry overall. That sample represents roughly 40% of the daily newspaper circulation in United States and half of the industry’s revenue. For the specific revenue category analysis, NAA has data from 15 different companies, again private and public, that provide breakouts at a much more detailed level. Thus while a sample rather than a census, this is the most complete data set of newspaper media revenue performance available.

The figures are for American newspaper operations and do not include totals for such things as any international operations or other enterprises owned by companies with newspaper media holdings.

Among the findings:

  • NAA projects that of the $38.6 billion in total revenue in 2012, $18.9 billion came from print advertising, $3.4 billion from digital advertising, $2.9 billion from advertising from direct marketing/niche and non-daily publications, $10.4 billion from circulation and $3 billion from new revenue sources. In 2011, of the total revenue of $39.6 billion, NAA projects $20.7 billion came print newspaper advertising, $3.2 billion from digital advertising, $3 billion from direct marketing/niche and non-daily publications, $10 billion from circulation and $2.7 billion from new revenue sources. (The projections do not include revenue from weekly papers not owned by daily newspaper companies.)

  • Combined digital revenue (from circulation, advertising, e-commerce, digital marketing and other sources) made up 11% of total revenue in 2012 for the 13 companies that broke out this data, though that varied by company. It was as high as 29% and as low as 8%.

  • The 5% overall growth in circulation revenue was the first gain in this category for the newspaper industry since 2003. Within that total, for the companies supplying detailed breakdowns, digital-only circulation revenue grew 275%; print and digital bundled circulation revenue grew 499%. Largely as a result of more organizations shifting toward bundling print and online into combined access subscriptions, print-only circulation revenue declined 14%.

  • Within the 8% growth in new revenue sources, revenue from digital agency consulting for local businesses grew 91%. E-commerce revenue grew 20%.

  • Mobile ad revenue, while small (less than 1% of total revenue), doubled (up 100%), according to the papers that broke that data out separately.

  • When revenue from print, digital, niche and delivery of preprints outside of newspapers is combined (based on data from 15 companies that provided such breakouts), total advertising revenue made up 65% of overall revenue in 2012. Within that figure, traditional print newspaper advertising fell 9% and now makes up 46% of total revenue. Digital advertising increased 5% and now makes up 11%; pure-play digital advertising (digital only) increased 20%.
  • Composition of Newspaper Media Revenue 

    Note: Based from detailed breakouts from 15 companies

     

    Category Details


    1. Advertising Revenue

    • Advertising in printed daily and Sunday newspapers dropped 9% in total for 2012, according to data from 15 companies that provided detailed breakouts by category. Retail advertising was off 8%, national advertising dropped 15%, and classified advertising declined 9%. Within the classified category, automotive slumped 9%, real estate fell 12%, recruitment fell 8%, and all other classified edged down 5%.

  • Of the seven companies that broke out niche publication advertising revenue separately, the category slipped 5% overall in 2012 compared with 2011. Of the 11 companies that reported direct marketing dollars, that category slipped 1%. Among the eight companies that reported non-daily/weekly advertising, the category fell 6% in total last year.

  • Digital advertising, which was broken out by 17 companies, rose 4% in 2012. Digital advertising accounted for 11% of overall total revenue, and comprised 17% of advertising revenue.

  • Of the 10 companies that broke out “pure-play” digital advertising as a subset of their digital ad numbers, pure-play accounted for 36% of the digital ad total and grew by 20%. Yet the data suggest there is a wide variation in performance. At the low end, one company saw pure-play advertising account for just 1% of digital ad revenue. At the high end, one company now derives 67% of its digital advertising revenue from pure play—a sign that management strategy and market are important factors here.

  • The difference in year-over-year performance in digital advertising was also significant. Of the 17 companies reporting digital advertising, one saw a double-digit drop in digital ad revenue in 2012 while another saw a gain of 33%. That variation, too, suggests that different approaches and markets can have substantially different impact on the bottom line.

  • Thirteen of the companies reporting data were able to break out mobile advertising separately. The dollar volume doubled in 2012, though it accounted for less than 1% of total revenue.
  • 2. Circulation Revenue

    • Circulation revenue rose 5% in 2012 for the total newspaper industry in 2012.

  • Of the seven companies that provided data on bundled print and digital circulation revenue, revenue from digital/print circulation rose nearly five fold (499%) from the level from 2011.

  • Digital-only circulation revenue, which could be derived from 12 companies that supplied such detailed breakouts, nearly tripled (up 275%) in 2012. Overall, digital-only circulation revenue accounted for a relatively small percentage (1%) of total circulation revenue. The online subscription model is vital to newspaper media’s future, particularly as consumers begin to adapt to reading newspaper media on mobile devices, especially tablets. Print-only and single-copy revenue for the 11 companies that reported digital circulation revenue declined 14%.
  • 3. New Revenue Sources

    Newspaper media are developing revenue from a host of new categories that virtually did not exist a decade ago. Among them: 

    • Digital agency and marketing: More than half of the companies (nine of the 15 reporting detailed data) reported revenue from digital agency and marketing activities, in which they help local businesses market their products, particularly digitally, in social and mobile. Revenue from digital agency and marketing services from those nine companies rose 91% during the year.

  • E-commerce and transactions: Many analysts believe that in the digital realm one of the biggest potential growth areas is not advertising but e-commerce and transactions, or helping businesses connect directly with consumers. Three of the 15 companies broke out data in this category. There, e-commerce revenue jumped 20% in 2012.

  • Event marketing: A number of newspaper media companies have moved into producing events related to core coverage areas, another way to convey information to audiences. Nearly half of the companies that supplied detailed categorical revenue data (seven of the 15) reported event revenue; revenue from the category at those companies dropped 9% year to year.

  • Commercial delivery: Newspaper media are making a business of using their delivery resources. Eleven companies listed revenue for commercial delivery of other products; revenue in the category dropped 2% year over year.

  • Commercial printing revenue: Eleven companies reported commercial printing revenue; the category at those companies slipped 3% in 2012.

  • All other categories: A number of companies are engaged in additional revenue. While small, this category ranges from such activities as royalties, licensing, rental income, waste and scrap sales, among others. Of the 12 companies providing year-to-year data, revenue from these various activities dropped 3%.

  • 4. Methodology

    • NAA for years has provided industry projections for circulation and advertising revenue, based on a broad sample of private and public company data. This year, NAA derived data from 17 different companies, including 10 privately held.  Due to the level of detail requested, companies provided data with the assurance of confidentiality.

  • These reporting companies represent approximately 40% of the weekday print circulation in the United States, nearly 330 papers and close to half of all U.S. newspaper media revenue.

  • The format for supplying the data allows companies the flexibility to indicate how they account for revenue lines and specify other data not otherwise listed on the form.

  • The data requested covered the calendar years 2011 and 2012. The participating companies normalized the data for a 52-week period in both years.

  • Media Revenue

     

    First Published: April 08, 2013

    Thursday, November 15, 2012

    Knoxville News Sentinel | knoxnews to Charge for Digital Content

    Like many other newspapers across the country, the News Sentinel will begin charging for digital content sometime next year. The strategy was discussed by top executives of the E.W. Scripps Co., which owns the newspaper, during a recent conference with industry analysts.

    The strategy, which likely will involve selling print-and-digital bundles as well as digital-only subscriptions, will begin rolling out at Scripps papers in early 2013, with all of the company's newspapers charging for digital products by the third or fourth quarter of the year, according to Tim Stautberg, senior vice president and head of the newspaper division.

    The timetable for the News Sentinel's roll-out hasn't been worked out yet. The newspaper has a growing suite of digital products including three websites (knoxnews.com, govolsxtra.com and knoxville.com), an electronic replica edition for web and iPad, and apps for iPhones and Android smartphones. Most recently, the newspaper launched an app designed especially for the iPad.

    All those products are now being distributed for free, but Scripps CEO Rich Boehne says "greatly diminishing the valuable content we give away for free" is essential to improving the newspapers' bottom line, according to a posting on CincyBizBlog. Scripps is based in Cincinnati, OH.

    News&Tech, an industry publication, reports that more than 300 newspapers in America now charge for digital content, and hundreds more are expected to follow suit in the near future.

    Stand by for updates. While some readers will grumble about the transition, charging for digital content is the best bet for sustaining the paper's newsgathering operations in the face of declining advertising revenue.

    We know, of course, that the strategy only will be successful if our content is compelling enough to make people want to subscribe. So over the next year, boosting the quality of our digital offerings will be a top priority.

    Posted by Jack McElroy on November 15, 2012 at 5:06 PM | Bookmark and Share

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    Sentinel moving toward digital subscriptions | The Upfront Page | knoxnews.com

    Sentinel moving toward digital subscriptions | The Upfront Page | knoxnews.com

    Friday, March 23, 2012

    Dr. Sol Adler Memorial Conference is April 2nd and 3rd

    The 18th Annual Dr. Sol Adler Memorial Conference will be held on April 2nd and 3rd, 2012. We hope you will plan to join us.

    More information here: http://www.uthsc.edu/allied/asp/

    Sol_Adler_Conference_2012.pdf Download this file

    Friday, February 24, 2012

    Why Facebook's New Ads are a Big Deal

    Facebook appears ready to launch a new set of premium ad units, and, based on a review of documents which purport to describe them, the social network would seem to be doubling down on two core principles that mark fundamental departures from traditional advertising.

    First, Facebook is making the new ads social by default, meaning they will automatically show users when their friends have already Liked the advertiser. And the new formats will draw their content exclusively from posts to brands' Facebook Pages, rather from advertising copy written independently.

    Combined, these features make two statements about where Facebook believes the future of online advertising lies--at least in its particular universe. It is saying that ads based on content, rather than messaging, have a better chance of hitting home, and that ads involving tacit endorsements from the people you know have a better chance of capturing your attention.

    "When people hear about you from friends, they listen," the Facebook materials say. "We'll expand your ad with stories from friends who have already connected." ("Stories" is Facebook's shorthand for a wide varitey of interactions on the site. In the case of ads, it seems to refer to the fact that the ads will display which of a viewer's friends have Liked the brand.)

    Facebook has not commented publicly on the new ads (presumably they will discuss them at a marketing launch event in New York next week). But the materials describing the new units were posted to Scribd earlier this week. The news was first reported on GigaOm. The documents are below.

    Facebook Premium Ads Guide Facebook Premium Ads Overview

    In the documents, Facebook says it is scrapping most of the display ad units it has offered until now, replacing them with the new formats. The previous ad units incorporated some of the social and interactive elements, but the new ones are implementing those features in a more comprehensive way.

    Each of the new units will include Like buttons and places for viewers to comment on the ads. When viewers click the Like button or enter a comment, those activities will be posted to the user's  friends' News Feeds. They will also be posted to the brand's Page. 

    Similarly, each ad will include pictures of friends who have already Liked the brand. The Facebook documents say this will happen automatically, instead of as an add-on.

    While Facebook had already been moving in these directions with its previous ad units, the decision to draw ad content from Page posts is the most significant new feature--and a potentially radical departure from conventional notions of advertising.

    The ads don't simply repurpose content from brands' Pages. By giving users the ability to respond to the content inside the ad, just as if they had seen the content on the brand Page itself, and then by posting those responses to the user's friends' News Feeds, as well as on the brand's Page itself, the ads are acting less like traditional broadcast advertisements and more like viral mechanisms to expand and perpetuate the conversation off into the far corners of the social network, effectively giving the brand visibility in places it might not otherwise have reached and in a much more organic way than if it had simply plastered the site with a bunch of banner ads.

    "Everything starts with great content from the Page," says one of the Facebook documents. "Paid, owned, and earned work seamlessly together."

    Facebook believes that this ultimately will pay greater dividends for brands than conventional advertising. According to tests the company said it performed internally, the new ads produce 40 percent more engagement (usually meaning they get more Likes, comments, and clicks) and are 80 percent more likely to be remembered.

    The company documents also claim the ads produce "signficant increases" in purchase intent, and it claims that viewers of an ad are four times more likely to purchase when they "see friends interact with a brand."

    If the ads truly do deliver the results Facebook claims, that could mean the social network is slowly but surely finding the marketing holy grail of "word of mouth"--at scale. And if that's the case, it could have profound implications for the advertising industry as a whole.

    The six new units are based on the type of content a brand would post to their Page. The Facebook documents label them as Status (a text comment), Photo, Video, Question (which replaces the old "Poll" ad format and which allows viewers to answer the question right in the ad), Event (ad viewers will similarly be able to sign up for the event right in the ad itself), and Link (which points viewers to content outside of Facebook).

    The Facebook documents say that brands will continue to be able to target their ads as they do today, choosing to place their ads in front of any of Facebook's 845 million users who fit demographic and interest criteria selected by the advertiser.

    E.B. Boyd is FastCompany.com's Silicon Valley reporter. Twitter | Google+ | Email