The World Association of Newspapers and News Publishers (WAN-IFRA) released its annual World Press Trends report detailing the status of the world’s newspaper industry. Despite a 4.7% growth in global circulation since 2007, there has been a 25% decrease in advertising revenue during the same five years.
Most interesting is the fact that North America accounts for 72% of the global decline in newspaper advertising revenue as more readers turn toward digital media and companies struggle to find a way to monetize their evolving customer base.
Couple declining print distribution in the US with the fact that local classified sections are becoming obsolete with companies like Craigslist taking over the market, it becomes rapidly apparent that news media needs to find a new revenue stream and fast. Some have opted for paid digital subscription, while others are steadfast in their resolve to remain free and open to all. Yet both methods are struggling to fill the revenue gap as advertisers turn to other types of media to spend their dollars.
Only 2.2% of all newspaper revenues came from digital advertising. This number should be much higher, considering 40% of the worlds digital audience reads newspapers online (up from 34% in the previous year). Clearly something is not being done right, and the digital advertising share of revenue needs to increase dramatically.
So, what can be done?
Newspapers should be looking for a more streamlined hyper-local model for revenue generation, one which does not require a robust sales staff but brings in a consistent stream of funds and appeals directly to their local market. Many publishers are looking toward e-commerce as the most viable option, especially given its success. (Cumulus Media’s SweetJack being one in the US and Johnston Press’s DealMonster and Coinks being another in the UK.)
The CPM ad space sales standard is a dying market as consumers grow weary of banner adds and click through crates continue to decline. With more and more people turning to the web to find their news, simply relying on an antiquated advertising model is not sustainable for an industry that should be taking a much bigger slice of the advertising pie.
What are you doing to sustain your publication?