Kantar Media has released its final tallies for 2011 ad spending across media, and the results are a mixed bag. They suggest that advertisers value TV, are losing faith in consumer magazines and newspapers (no news there), and are on the fence about digital advertising.
Surprisingly hard hit were Sunday magazines (like Parade, The Boston Globe Magazine and the New York Times Magazine). Presumably this is because print newspaper subscriberships are down, and readers tend to cut out the expensive Sunday editions to save money, before they cancel daily subscriptions.
Big winners: Spanish-language media, and TV syndication.
Spanish-language TV was up 8.3% year-over-year, versus 2.4% for TV overall. Spanish-language magazines were up 24.9% YoY, defying a 0.4% decline for all magazines.Syndicated TV was up 15.4% over that 2.4% for TV overall (due in part to the astounding success of “The Big Bang Theory” which hit syndication in Q3).
The Year Overall
Total advertising expenditures increased an unimpressive 0.8% in 2011 and finished the year at $144.0 billion. Ad spending during the fourth quarter of 2011 dropped 1.0% versus the year ago period, the first quarterly decline since the end of 2009. Since reaching a post-recession peak in Q3 2010, advertising growth rates have slowed sequentially for five consecutive quarters.
“The contrast of resilient TV spending and waning budget allocations to other traditional media was plainly evident at the end of 2011,” said Jon Swallen, SVP Research at Kantar Media Intelligence North America. “Some mature digital media formats were also touched by the year-end tide of reduced spending. Whether this is an isolated occurrence or an early sign of digital dollars moving more quickly towards emerging and unmeasured digital platforms bears watching as 2012 unfolds.”
Measured Ad Spending By Media
Television continued to lead the ad market in the fourth quarter. Network TV expenditures jumped 7.7% year-over-year and were helped by strong pricing for football, a baseball World Series that went the maximum seven games and the launch of “The X Factor” singing competition program. The rate of Cable growth eased during Q4, finishing at +2.4% as higher demand from restaurants and retailers was offset by reductions from consumer packaged goods. For the full year, Network TV decreased by 2.0% while Cable rose 7.7%.
Spanish language TV ad spending surged 19.1% in fourth quarter, paced by higher sell-out levels at over-the-air networks. For all of 2011, the segment increased 8.3%.
Syndication TV benefitted from higher spending by department stores and health & beauty brands and saw expenditures soar 11.0% in Q4. Full year spending advanced by 15.4%.
Spot TV expenditures fell 8.7% in the fourth quarter but the more significant indicator was that November and December spending were each down, despite easy comparisons against diminished, post-election spending volume of a year ago. Full year Spot TV spending dropped 4.5%.
Free Standing Inserts achieved healthy gains in the fourth quarter with spend rising 3.0%. Although manufacturers have been distributing fewer FSI coupons, retailer promotion pages have increased significantly and this contributed to the improvement.
Ad expenditures for measured digital media declined in the fourth quarter. Paid Search budgets were 6.4% lower versus a year ago with continuing reductions from financial, insurance and local service advertisers. Display investments decreased 5.9% in Q4, dragged down by smaller budgets from auto manufacturers, telecom providers and travel companies. For the entire year, Paid Search declined 2.8% and Display increased 5.5%.
Magazine ad spending eroded at year end. Consumer Magazines declined 5.2% in the fourth quarter due to deep cutbacks in auto, food and pharmaceutical advertising. Total year expenditures were level compared to prior year. Outlays in Sunday Magazines fell 9.8% in Q4, the sixth consecutive quarter of year-over-year declines, and were down 7.2% for all of 2011.
Local Newspaper ad expenditures fell 3.9% during the fourth quarter, hurt by the reallocation of retailer advertising budgets to other media channels during the key holiday shopping season. Full year spending was 3.8% lower. The losses in Newspaper spending are consistent with reductions in the amount of space sold.
The pace of spending in Radio media also sagged. Local Radio expenditures were down 3.8% and National Spot Radio plummeted 13.9% in the fourth quarter. The telecom, financial service and automotive categories were prime contributors to these quarterly decreases.
Measured Ad Spending By Advertiser
Spending among the ten largest advertisers in 2011 reached $16,061.6 million, a 2.8% decline compared to a year ago. Among the Top 100 marketers, a diversified group that represents over two-fifths of all measured ad expenditures, full year budgets were down 0.2%.
For the ninth consecutive year, Procter & Gamble was the top advertiser with spending of $2,949.1 million down 5.4% compared to last year. While TV is still the foundation of its advertising media buys, P&G’s 2011 budget allocation saw share gains for magazines at the expense of TV.
AT&T was the second largest advertiser in 2011 with expenditures of $1,924.6 million, a decline of 11.7%. Media budgets were severely curtailed during the fourth quarter when the company abandoned its attempted acquisition of T-Mobile, triggering large breakup fees and a huge earnings loss. At Verizon Communications, full year ad spending was $1,636.9 million, a decrease of 11.8%. After a string of quarterly budget cuts dating to early 2010, Verizon sharply boosted its spending during the last quarter.
The largest growth rate among the Top Ten marketers was posted by Chrysler, up 36.2% to $1,193.0 for the full year. The increase was driven by marketing introductions for several new or redesigned models, coupled with the improved sales climate for new vehicles. In contrast, General Motors lowered its 2011 outlays by 16.1% to $1,784.1 million. Q4 media budgets dropped 24.7%. As factory support has been trimmed, GM dealers have been bearing a larger share of the overall marketing effort.
L’Oreal investments in 2011 rose 18.1% to $1,343.5 million as the company expanded marketing support for the L’Oreal Paris, Maybelline and Garnier brand lines. Comcast (+11.3%, to $1,577.2 million) and Time Warner (+5.8%, to $1,279.4 million) also posted full year spending gains.
Measured Ad Spending By Category
Expenditures for the ten largest categories grew 3.3% in 2011 and reached $81,629.2 million.
Automotive was the leading category in dollar volume and finished 2011 at $13,890.4 million, up 6.3%. Category spending growth became increasingly bifurcated during the year with Tier 2 and Tier 3 dealer budgets continuing to expand and Tier 1 manufacturer expenditures flattening.
Miscellaneous Retail, which is comprised of all retail segments except Department Stores and Home Improvement purveyors, was the second largest category with 2011 expenditures of $10,019.5 million, up 4.0%. Robust ad spending during the critical year-end holiday season bolstered results.
Insurance registered the largest growth rate among the Top Ten categories with a 13.5% gain to $5,519.0 million. Aggressive competition among auto insurers to gain market share continues to drive media budgets higher.
Financial Services totaled $9,059.9 million of spending, a 3.6% increase. Growth has been fueled by the credit card segment, offsetting continued weakness in ad budgets for investment products and retail banking.
The Telecom category lost ground as 2011 expenditures fell 5.8% to $8,649.0 million. Declines were most pronounced among the leading wireless service advertisers. Aggregates expenditures from TV service providers also slowed.
Top Spending Advertisers Within Select Media
The top ten TV advertisers spent $10,115.4 million in the medium during 2011, down 0.8% from a year ago. This group accounted for 14.9% of total TV expenditures by all advertisers.
The ten largest Internet advertisers invested a total of $2,360.6 million in paid search and display campaigns, up 10.0% versus a year ago. Despite fragmentation on the web, the group accounted for 10.9% share of all Internet ad dollars.
The top ten advertisers in Hispanic Media spent $1,403.6 million during 2011, an increase of 29.2%. This group accounted for 24.7% of all Hispanic Media expenditures, the largest Top Ten share concentration of any medium.
Ninety-two percent of consumers around the world say they trust earned media, such as word-of-mouth and recommendations from friends and family, above all other forms of advertising—an increase of 18% since 2007, according to a new study from Nielsen, a leading global provider of information and insights into what consumers watch and buy. Online consumer reviews are the second most trusted form of advertising with 70% of global consumers surveyed online indicating they trust this platform, an increase of 15% in four years.
Nielsen’s Global Trust in Advertising Survey of more than 28,000 Internet respondents in 56 countries shows that while nearly half (47%) of consumers around the world say they trust paid television, magazine and newspaper ads, confidence declined by 24%, 20% and 25% respectively since 2009. Still, the majority of advertising dollars are spent on traditional or paid media, such as television. In 2011, overall global ad spend saw a seven% increase over 2010, according to Nielsen’s most recent Global AdView Pulse. This growth in spend was driven by a nearly 10% increase in television advertising, with countries, including the U.S. and China, attracting more advertising dollars versus the year prior.
“While brand marketers increasingly seek to deploy more effective advertising strategies, Nielsen’s survey shows that the continued proliferation of media messages may be impacting how well they resonate with their intended audiences on various platforms,” said Randall Beard, global head, Advertiser Solutions at Nielsen. “Although television advertising will remain a primary way marketers connect with audiences due to its unmatched reach compared to other media, consumers around the world continue to see recommendations from friends and online consumer opinions as by far the most credible. As a result, successful brand advertisers will seek ways to better connect with consumers and leverage their goodwill in the form of consumer feedback and experiences.”
Nielsen’s survey shows that 58% of global online consumers trust “owned media,” such as messages on company websites, and 50% find content in emails they consented to receive to be credible.
Forty percent of global respondents find product placements in TV programs to be credible, while 42% trust radio ads and 41% trust pre-movie cinema messages.
Trust in Online Ads
Thirty-six percent of global online consumers report trust in online video ads, and 33% believe messages in online banner ads, up from 26% in 2007. Ads viewed in search engine results are trusted by 40% of global respondents in Nielsen’s survey, up from 34% in 2007. Sponsored ads on social networking sites are deemed credible by 36% of global respondents.
“The growth in trust for online search and display ads over the past four years should give marketers increased confidence in putting more of their ad dollars into this medium,” said Beard. “Many companies are already increasing their paid advertising activity on social networking sites, in part due to the high level of trust consumers place in friends’ recommendations and online opinions. Brands should be watching this emerging ad channel closely as it continues to grow.”
Trust in Mobile Ads
According to Nielsen’s survey, one-third of global respondents trust video or banner display ads on mobile devices such as tablets or smartphones. Approximately one-third (29%) of global online consumers said they trust mobile phone text ads, an increase of 21% since 2009 and 61% since 2007.
When considering ad relevance, 50% of global online consumers find TV ads to be personally relevant when they are looking for information on products they want or need, particularly among consumers in the Middle East, Africa and Pakistan, where 65% find TV ads to be highly pertinent to their needs. By contrast, 30% of European respondents consider TV ads to be relevant.
One-third (33%) of global respondents find online banners ads to be relevant, compared to ads on social networks (36%) and online video ads (36%). Forty two% of global consumers find ads in search engine results relevant.
“The high cost of advertising in today’s fragmented media world forces marketers to strive for the most effective and efficient ads,” said Beard. “In order to boost advertising ROI, marketers need to make sure an ad’s content and message is relevant to the consumer who sees it. While we expect to see high relevance levels in ads where the consumer is actively seeking information, such as on a brand’s own website or solicited emails, Nielsen’s survey shows that there is still much potential for marketers looking to reach the right audience through advertiser-driven messages.”
Magazines have more than doubled paid digital circulation in the most recent reporting period, reports Ad Age. Still, print is the majority of their business, according Audit Bureau of Circulations data.
Digital circulation climbed 125% in the second half of 2012, up from 1.46 million in 2011 to 1.46 million, reports Ad Age. Still, digital remains at about 1% of magazines' total paid and verified circulation.
Too bad for advertisers. Digital magazines provide superior value. First, research reveals that 70% of digital magazine subscribers enjoy buying through digital magazine ads. And 37% of readers enjoy digital reproductions of print magazines, meaning advertisers stretch their print-ad dollars.
And of course it appeals to a younger demographic. Alpha Media Group President Ben Madden told Ad Age that at first it had published a digimag version of its Maxim simply to get it out there; but that the paid digital circulation of 41,084 in latter 2011 jumped to 110,,000 by the end of January 2012. "This is becoming a really important part of our business, which makes sense for Maxim given the age breaks we're focused on," he told Ad Age. Still, individually paid circulation accounted for only 24% of those subscriptions, the rest being sponsored by businesses and advertisers.
The Audit Bureau of Circulations Consolidated Media Report format, announced in June 2011, continues to offer a "brand universe" picture of a magazine's reach, in print and digitally. The digital picture takes into account all digital impressions, including digimag, newsletters, and website visits to a magazine's site. And the numbers are impressive, for the only two magazines reporting thus far (Fine Cooking and Popular Science): According to ABC, the Fine Cooking e-newsletter reached 453,898 average monthly unique e-mail addresses; attracted an average 904,016 total average monthly website browsers; and combined with print, reaches a total “brand universe” of 1,702,518. But weep not for publishers: low digital subscriberships hardly mean lost advertising opportunities.
The two takeaways are that 1) print is by no means succumbing to digital, and 2) digital success is hardly measured by a magazine's digital circulation alone.
Twitter with its new ad platform is attracting higher cost-per-thousand views (CPMs) than other social networks, according to third-party ad buyer TBG Digital. TBG surveyed data for 10 brands across different sectors, and observed some early trends for paid ads on Twitter.
TBG found that CPM for Twitter was higher in part because its ads are in-stream versus on the side (e.g., in Facebook), which is more attractive to advertisers. Also true, click-through rates in the news category were far higher on Twitter than on Facebook; though the categories of travel and consumer electronics saw higher CTRs on Facebook.
News is behind the higher day-time conversions for Twitter, which dominates in conversions from 6 A.M. to 12 P.M., and 8 P.M. to According to the research, conversions differed dependent on the time of day, with 6am-12pm and 8pm-12pm being the most successful on Twitter, the times of day when users are more hungry for information and news (see chart below).
Simon Mansell, CEO of TBG Digital, said “Facebook…tends to peak at lunchtime, when people are using it for their downtime.”
The U.S. has a relatively high cost-per-follower, but the click-through rate is below average.
Business, Consumer Press Success
min Online reported today that Twitter is no longer the domain of teen and celebrity chatter alone.” Twitter has just celebrated its sixth anniversary with 140 million users, an increasing number of which are B2B publishers. Four business titles, being Women’s Wear Daily, PRNews and Computerworld and PC World (two IDG titles) have reported substantial recent gains through Twitter. All of the titles make it a point to tweet continuously, with WWD posting about every half hour during the week and more frequently on the weekend; and PRNews topping 30 tweets per day.
Min also reported that among consumer magazine brands, RollingStone.com gained 126,886 new followers between February 22 and March 22, an 11.27% gain. Meredith's Parents magazine promotes its content with poll questions, e.g., "Did you give into co-sleeping against your will after Baby was born?" which has given the title a boost of 9.11% in new Twitter followers.
Self Service for Small Business
Twitter yesterday (March 27, 2912) announced that a select group of small businesses can begin using its self-serve advertising platform for promoted tweets and accounts, reported Mashable. Amex partnered with Twitter to launch the platform, offering both early access to Amex merchant customers and a $100 credit toward free advertising for the first 10,000 businesses to sign. A Promoted Account recommends a brand’s Twitter account to users with similar interests who do not yet follow the brand; and a Promoted Tweet places an existing tweet in search results. A small business pays when its account is followed, or when a Twitter user engages with the promoted tweet.
Forbes Media announced the relaunch of its lifestyle title ForbesLife last November, and has just released its April issue. While for 22 years it was polybagged to 800,000 of Forbes' 900,000 subscribers, it will now be offered on newsstand, and available in replica form for Nooks, Kindles and iPads, providing cross-platform access to what Forbes calles “the best in luxury journalism.”
It will have to be, to stand out. As Women's Wear Daily observes, "It’s only March and four luxury titles have revealed they will launch (or relaunch) to tell the tales of billionaire bachelors, fine Parisian restaurants and the latest antiaging skin procedures." February saw the launch of Bloomberg Pursuits, aimed at its Bloomberg Terminal clientele with their median household income of $452,000, 90% male. Jason Binn, founder of Niche Mediam, will publish Du Jour magazine in September, targeting readers with a net worth of more than $5 million and an average home value of $1.5 million. And Time has resurrected its Time Style & Design after a three-year hiatus. Advertisers include Harry Winston and Bulgari, and the magazine is delivered to 500,000 affluent subscribers.
ForbesLife and Time Style & Design of course share strong journalistic parentage. Forbes has easy access to the world's luminaries, which is the value proposition of ForbesLife. “With personality-driven covers, the new ForbesLife offers personal connections to the world’s tastemakers, with a focus on putting power in the hands of the consumer,” said the company in a release. “The magazine was re-imagined for the social world we live in." The April issue boasts a new modern look, photo-driven editorial content, first-person storytelling, and “unprecedented access to the most important people in the world...focused on giving candid glimpses into the biggest names in business, showing how the rich and ambitious really live."
“In integrating ForbesLife with its parent and introducing a dazzling design courtesy of the great Robert Preist and his associate, Grace Lee, we are amplifying our nearly 22-year-old founding mission of celebrating the rewards of success with flair and style,” said Robert Forbes, President of ForbesLife. ForbesLife readers represent elite influencers, spending more on travel, apparel and accessories, fine watches and jewelry, consumer electronics, home furnishings, and luxury vehicles than readers of any other business publication.
In the newest issue, Warren Buffett writes about his decision to invest on his own at age twenty five, a choice that ended up netting him over $50 billion dollars. The cover story takes readers inside the home of bachelor billionaire Elon Musk, South African tech-genius responsible for PayPal, Tesla, Space X, and supposedly was the inspiration behind Iron Man. (A dubious claim: the first “Iron Man” comic was released in 1963, Musk born in 1971, but perhaps ForbesLife is talking about the films.) John Paul DeJoria, cofounder of Patrón and Paul Mitchell hair products, takes ForbesLife for a ride on luxurious private train car, The Patrón Tequila Express. Jay Leno gives a tour of his $20 million garage, equipped with the most sought-after vehicles in the world. Also showcased in the issue are the lives of philanthropist Susan Dell and car magnate Charles Royce; a wine tour of Paris by world renowned wine writer Robert Parker Jr.; and a satire by P.J. O’Rourke.
Additional highlights of the new ForbesLife include sections on the best in travel, auctions, charities, high-end sporting events and luxury goods as well as party pictures from exclusive Forbes branded events.
Is now the time to launch a luxury title? Absolutely, observes WWD, which observes that year-to-date, luxury title W is up 63 ad pages (20%), and Departures kicked off 2012 with a 22% rise in revenue and 10% hike in paging during Q1.
- Rovio claims that as of Monday, its Angry Birds Space game has been downloaded more than 10 million times since it was made available on Thursday, reports AllThingsD. The game is available on iOS, Mac and PC, with a Windows mobile release in development; but in-game advertisers must opt for the Android version. Angry Birds Space is available for Android devices for free with advertising. Ad-free versions of Angry Birds Space will also be available on Android for $0.99, and an HD version for Android tablets for $2.99, according to the company’s website.
- Microsoft and Nokia are “trying to claw back market share from Apple Inc's iPhone and Google's Android” in the apps market, according to a Reuters story. On Monday, Microsoft and Nokia announced that they would invest $23.9 million into AppCampus, a new mobile application development program at Helsinki's Aalto University, over the next three years. Microsoft is late to the game: while there are 65,000 apps on the new-ish Windows Phone Marketplace, that falls far short of the 0.5 million available from the Apple App Store and Google Play. And at present, only 37% of developers have any interest in creating apps for the Windows Phone, according to IDC/Appcelerator survey, versus 89% interested in iPhone and 79% in Android phones.
- While the GOP slugfest rages on, President Barack Obama's reelection campaign continues to spend big on digital ads, according to ClickZ. Obama for America spent an additional $3 million on digital ads, including text messages, in February. Since Obama for America launched the 2012 campaign nearly a year ago, it has spent more than $11 million on web ads, according to ClickZ analysis of Federal Election Commission filings. If the campaign continues to spend $3 million on digital advertising monthly, it will have spent $35 million by November. OFA claims to have spent about $16 million in online ads during the 2008 campaign.
- The Audit Bureau of Circulations (ABC) has released a Consolidated Media Report (CMR) for Fine Cooking, only the second print-and-digital journal to undergo the audit, reports minOnline. The second-half-2011 audit went beyond newsstand and subscription sales to include the measured components from FineCooking.com. (Google Analytics was the foundation). Popular Science was the first magazine to have a CMR audit, and released which released its first-half 2011 data last October. According to ABC, the Fine Cooking e-newsletter reached 453,898 average monthly unique e-mail addresses; attracted an average 904,016 total average monthly website browsers; and combined with print, reaches a total “brand universe” of 1,702,518.
- Alongside those Twitter ads, marketers should encourage their CEOs and CMOs to tweet. As eMarketer reports (citing data from social-media branding firm BRANDfog), consumers and employees regard company leaders who engage on social media platforms positively. The majority of respondents in a survey at 78% believe that CEO participation in social media leads to better communication, while 71% said it leads to improved brand image and 64% said it provides more transparency.
Forbes’ Jeff Bercovici reports that the Huffington Post Media Group will launch “Huffington,” a digital magazine for the iPad and tablet format. “Huffington” will be available as an app, rather than as a mobile-optimized website.
Huffington Post Media has appointed its own executive editor Tim O’Brien to oversee the project. The company lured O’Brien away from The New York Times in 2010, to spearhead original journalism at the Huffington Post or “HuffPo.”
Huffington will be a weekly, though the company has yet to determine how it will monetize the magazine. Bercovici received dueling accounts by HuffPo insiders. But as he describes, News Corp.’s The Daily is available as a paid app ($39.99 per year, $.99 per issue), and is one of the top-grossing apps in the Apple store.
AOL has begun putting considerable resources into HuffPo, after a quiet first year (it acquired HuffPo in February, 2011). AOL will launch a video-HuffPo streaming network between Q2 and Q3, with 12 hours of programming running five days a week. Called “HuffPost Streaming Network,” it will sit on every available platform, including desktops, smartphones, tablets and “over-the-top TV,” that is, off network.
No launch date as yet. Assuming the same demographics as the HuffPo website, the magazine app and the streaming network can expect this market reach:
- 12.8M women every month, who HuffPo reminds advertisers “control 85% of household spending”
- HuffPo visitors are “more likely to have a [household income] of over 150K than average internet users”
- “More likely to have a post-graduate degree than average internet users”
- “More likely to be business decision-makers than average internet users”
Forbes Media and comScore, Inc. have announced an agreement to implement viewable impression measurement across all display ad campaigns appearing on Forbes.com as part of its validated Brand Increase Guarantee (vBIG) program. This offering from Forbes leverages the comScore validated Campaign Essentials (vCE) service to validate that the ad impressions delivered as part of an advertiser’s vBIG program are in-view, such that that advertisers will be charged only for ads that have delivered the desired advertising effect.
This program is consistent with the principles addressed as part of “Making Measurement Make Sense” (3MS), an industry-wide initiative led by the Association of National Advertisers (ANA), Interactive Advertising Bureau (IAB), and the American Association of Advertising Agencies (4A’s). The initiative calls for a set of standards across the industry and the need for a true measure of ‘viewable impressions’.
“Forbes is thrilled to be the first-to-market premium publisher using comScore vCE to guarantee viewable impressions to our advertisers as part of our vBIG program,” said Bruce Rogers, Chief Insights Officer, Forbes Media. “We see this as a game-changer for Forbes and a significant first step for the industry toward improved accountability for – and ultimately monetization of – digital ad inventory.” Rogers observes that for too long online, ad pricing has involved “significant guesswork, because while we knew that not all ads were delivered in-view, we weren’t always sure which ones.”
As EVP Erin Hunter of comScore describes the dilemma facing publishers and advertisers, they need analytics on the performance of every single ad, equally, to know its return on investment. “Premium publishers that offer highly engaging content often do not get the credit they deserve for below-the-fold placements on their web page, which may actually deliver results that are every bit as strong as the above-the-fold placements.”
As comScore describes the vCE service, “comScore vCE is helping premium publishers like Forbes clearly illustrate the value of their inventory and prove to advertisers why placements throughout their site have the ability to deliver the desired effect on audiences. The result is greater transparency and accountability on both sides of the media equation, representing a win-win scenario for both advertisers and publishers.”
Where do consumers get their news (and see the ads)? New research suggests that advertisers are better off advertising in a tablet edition of a newspaper, than in the newspaper itself. Also that those advertisers are guaranteed exposures on television, but perhaps wasting their ad spends on Facebook.
Just-released findings by the Pew Research Center suggest that mobile technology fueling news consumption, strengthening the appeal of traditional news brands and even boosting reading of long-form journalism. But, technology companies are strengthening their grip on who profits, according to the 2012 State of the News Media report by Pew Research Center’s Project for Excellence in Journalism.
More than a quarter of Americans (27%) now get news on mobile devices, and for the vast majority, this is increasing news consumption, the report finds. More than 80% of smartphone and tablet news consumers still get news on laptop or desktop computers. On mobile devices, news consumers also are more likely to go directly to a news site or use an app, rather than to rely on search — strengthening the bond with traditional news brands.
While technology may be adding to the appeal of traditional news, technology intermediaries are capturing even more of the digital revenue pie. In 2011, five technology giants generated 68% of all digital ad revenue, according to the market research firm eMarketer — and that does not include Amazon and Apple, which make their money from devices and downloads. By 2015, roughly one out of every five display ad dollars is expected to go to Facebook, according to the same source.
“Our analysis suggests that news is becoming a more important and pervasive part of people’s lives,” PEJ Director Tom Rosenstiel said. “But it remains unclear who will benefit economically from this growing appetite for news.”
Social media platforms, meanwhile, grew substantially over the last year, but still play a limited role in daily news consumption. Only about a third as many news consumers follow stories via Facebook as do so by going directly to news websites or apps or by using search, according to new PEJ survey data released here. For Twitter, the proportion drops to less than a sixth as many.
“News organizations have a big opportunity in the social and mobile realms,” PEJ Deputy Director Amy Mitchell said. “But they will need to do a better job than they did in the desktop realm of understanding audience behavior and developing effective technology and revenue models.”
These are some of the conclusions in the ninth edition of PEJ’s annual State of the News Mediareport. The report is a comprehensive analysis of the major trends in news over the last year and includes detailed chapters on eight major media sectors — digital, newspapers, cable news, network TV, local TV news, audio, magazines and ethnic media. This year’s study also includes two new national surveys examining how news is consumed on different devices and the impact of social media on news, a special report on the state of community media and an examination of Native American media.
Among the study’s findings:
- Americans are far more likely to get digital news by going directly to a news organization’s website or app than by following social media links. Just 9% of U.S. adults say they follow news recommendations from Facebook or Twitter “very often” on any digital device — compared with 36% who say the same about directly going to a news organization’s site or app; 32% who access news through search; and 29% who use news organizing sites like Topix or Flipboard.
- Even so, social media are an increasingly important driver of news, according to traffic data. According to PEJ’s analysis of traffic data from Hitwise, 9% of traffic to news sites now comes from Facebook, Twitter and smaller social media sites. That is up by more than half since 2009. The percentage coming from search engines, meanwhile, has dropped to 21% of news site traffic, from 23% in 2009.
- Facebook users follow news links shared by family and friends; Twitter users follow links from a range of sources. Fully 70% of Facebook news consumers get most of their story links from friends and family. Just 13% say most links that they follow come from news organizations. On Twitter, however, the mix is more even: 36% say most of the links they follow come from friends and family, 27% say most come from news organizations, and 18% mostly follow links from non-news entities such as think tanks. And most feel that the news they get on either network is news they would have seen elsewhere without that platform.
- Most media sectors saw audience growth in 2011 — with the exception of print publications. News websites saw the greatest audience growth (17%) for the year. In addition, thanks in part to the drama of events overseas, every sector of television news gained in 2011. Network news audiences grew 5%, the first uptick in a decade. Local news audiences grew in both morning and late evening, the first growth in five years. Cable news audiences also grew, by 1%, after falling the year before; in particular, MSNBC and CNN audiences grew in 2011, while Fox declined. Print newspapers, meanwhile, stood out for their continued decline, which nearly matched the previous year’s 5% drop. Magazines were flat.
- Despite audience gains, only the web and cable news enjoyed ad revenue growth in 2011. Online advertising increased 23%, and cable ads grew 9%. Most media sectors, however, saw ad revenues decline — network TV was down 3.7%; magazines ad pages, 5.6%; local news, 6.7%; and newspapers, 7.6%.
- As many as 100 newspapers are expected in coming months to join the roughly 150 dailies that have already moved to some kind of digital subscription model. In part, newspapers are making this move after witnessing the success of The New York Times, which now has roughly 390,000 online subscribers. The move is also driven by steep drops in ad revenue. Newspaper industry revenue — circulation and advertising combined — has shrunk 43% since 2000. In 2011, newspapers overall lost roughly $10 in print ad revenue for every new $1 gained online. (That suggests no improvement from what a separate PEJ study of 38 papers found regarding 2010, when the print losses to digital gains in the sample were a $7-to-$1 ratio.)
- The emerging landscape of community news sites is reaching a new level of maturity — and facing new challenges. As some seed grants begin to sunset, a shakeout in community news sites is beginning, along with a clearer model for success. NewWest.net and Chicago News Cooperative are among the prominent community news sites that ceased publishing in 2011 or early 2012. The model for success, epitomized by Texas Tribune and MinnPost, is to diversify funding sources and spend more resources on business—not just journalism.
- Dave Girouard, Google’s VP of apps, is leaving the company to launch a startup, reports AllThingsD. Girouard had overseen cloud applications including Gmail, Google Calendar and Google Docs. The parting is amicable, as Google Ventures will be investing in the company, called “Upstart.” No clear description of the company yet, but it appears to be a microinvestment firm, or some manner of matchmaking venture, with the tagline “The Startup is You.” Upstart “lets you raise capital in return for a small portion of your future income.” Girouard’s responsibilities will transfer to Chrome and apps-team lead Sundar Pichai.
- Starz Entertainment is banking on the drive-TV-viewership-from-the-web model. Starz is offering a multi-platform, nationwide sampling of the first three episodes of its highly original dramatic series "Magic City." The show premieres March 30 on STARZ, at 11 p.m. ET/PT; but select multichannel video affiliates will allow online and on-demand sampling of the next two episodes. "Magic City" will be on Friday, March 30, on STARZ at 11 p.m. ET/PT, immediately following the season finale of the series, "Spartacus: Vengeance" with a sneak preview of the series premiere episode. The "Magic City" three-episode sampling initiative is the first-ever at launch for a STARZ Original series, and follows the record on-line and on-demand sampling success of "Spartacus: Vengeance," which drew 8 million total views across both platforms. Affiliates offering the first three episodes free on demand starting March 31 include: Comcast's Xfinity TV, DIRECTV, DISH and Time Warner Cable, among others.
- NBC has chosen the Brightcove App Cloud content app platform to support the first-ever Emmy screener iPad app, “NBCU Screen It.” App Cloud is a comprehensive platform that enables organizations to use open Web standards like HTML5 to create and operate native apps for Apple iOS smartphones and tablets. The NBCU Screen It app makes the network's current-season programming available for screening by the 15,000 Television Academy members who vote on the Emmy awards each year. Featured content in the app includes NBC's primetime series, scripted series, reality series and late-night programming.
- In interactive TV news, TV producer Mark Burnett's company One Three Television LLC has purchased an ownership interest in Youtoo, reports Streaming Media. Burnett produces “Celebrity Apprentice,” “Survivor” and “Shark Tank,” among other unscripted series. Youtoo creates software for interactive and gaming TV experiences. Burnett plans to use the technology to integrate interactive experiences with his TV properties; viewers will be able to appear on the programs, share reactions, and play along with games on the programs. Youtoo launched in September, 2011, and Burnett’s VIMBY company produced 250 short videos for the launch.
- Kandy Magazine, a new independent lifestyle magazine focused on "social insight and activities for men," has partnered with iMirus to develop a Kandy branded iPad app. Issue 5 (which featured cover model DJ Colleen Shannon) was the first Kandy Magazine issue specifically designed with the new iPad in mind and its "retina" display. Kandy Magazine increased the resolution of the images in Colleen's pictorial, to maximize the benefits of the screen resolution of the new iPad. In addition to their in-app page ads, advertisers receive additional exposure in the ads category, accessible with a single tap of the screen by the reader.To celebrate the release of the iPad app, the first 100,000 in-app downloads of issue 5 of Kandy Magazine are complimentary.