Newspapers Losing Revenue: Time for a Change
March 30, 2012
Newspaper acquisition time? I was surprised by a headline I landed on while browsing Business Week; an article titled, “Newspapers Lose $10 in Print for Every Digital $1” grabbed my attention.
According to the article, newspapers in the United States lost $10 in print advertising revenue in 2011 for every dollar gained online. The article cites a study by Pew Research and blames the 7.9 percent ad revenue loss on competition from tech intermediaries. Newspapers are hurting tremendously in the online arena. Paid news sites and print copies are declining in revenue because consumers want their news fast and free, usually via mobile apps and free news blogs.
Newspaper groups have failed to capitalize on the volume of personalized data available online in the face of increased competition from companies including Google (GOOG) and Facebook, which are selling advertising targeted to consumers based on their interests and demographics, typically at higher ad rates, Rosenstiel said. Newspapers have slowly shifted their businesses online, led in part by the recent success of New York Times Co. (NYT)’s plan to charge readers for access to its newspapers’ websites. Pew’s study estimates as many as 100 newspapers are expected to offer a digital subscription model in the coming months.
No matter how one exercises ingenuity, the newspapers have a broken business model and a customer base indifferent to old information in print or online. Users are not likely to pay subscription fees, even for traditional and trusted organizations, if the material is available elsewhere for free. News groups should reconsider new business models or becoming partners with data-driven companies, or else it could be sell off and go fishing time.
Andrea Hayden, March 30, 2012
Sponsored by Pandia.com
Publishers Pose Threats to Text Mining Expansion
March 26, 2012
Text mining software is all the rage these days due to its ability to make significant connections by quickly scanning through thousands of documents. This software can recognize, extract and index scientific information from vast amounts of plain text, allowing computers to read and organize a body of knowledge that is expanding too fast for any human to keep up with. However, Nature.com recently reported on a some issues that have developed in this growing industry in the article “Trouble at the Text Mine.”
According to the article, text mining programmers Max Haeussler and Casey Bergman have run into trouble trying to get science publishers to agree to let them mine their content.
The article asserts:
Many publishers say that they will allow their subscribers to text-mine, subject to contract and the text-miners’ intentions, and point to a number of successful agreements. But like many early advocates of the technology, Haeussler and Bergman complain that publishers are failing to cope with requests, and so are holding up the progress of research. What is more, they point out, as text-mining expands, it will be impractical for individual academic teams to spend years each working out bilateral agreements with every publisher.
While some publishers are getting on board the text mining train, many are still trying to work out how to take advantage of the commercial value before signing on. Too bad it takes more than a degree in English to make text mining deliver useful results. Bummer.
Jasmine Ashton, March 26, 2012
Sponsored by Pandia.com
Long Live the Blog
March 25, 2012
Thought blogs were dead? Think again. Neilsen Wire reveals, “Buzz in the Blogosphere: Millions More Bloggers and Blog Readers.” The world is now graced with over 181 million blogs, up from 36 million in 2006, according to research by NM Incite. The study also found that 6.7 million bloggers write on blogging websites, while 12 million more publish through social networks.
Researchers broke bloggers down by category; the article reveals:
“* Women make up the majority of bloggers, and half of bloggers are aged 18-34
* Bloggers are well-educated: 7 out of 10 bloggers have gone to college, a majority of whom are graduates
* About 1 in 3 bloggers are Moms, and 52 percent of bloggers are parents with kids under 18 years-old in their household
* Bloggers are active across social media: they’re twice as likely to post/comment on consumer-generated video sites like YouTube, and nearly three times more likely to post in Message Boards/Forums within the last month”
Three forums, Blogger, WordPress, and Tumblr, when combined boast 80 million unique visitors. The write up posits, though, that the future lies in Pinterest, a fast-growing, visually oriented social media site whose audience inhabits the coveted 25- to 34- year age range.
NM Incite offers competitive advantage through social media analysis. Though headquartered in New York, the company has operations in twenty-five markets around the world.
Stephen E. Arnold, March 25, 2012
Sponsored by Pandia.com
More Data about Down Trends in Online Ads
March 23, 2012
This could spell bad news for those depending on online ad revenues. ClickZ reports, “Spending on Digital Ads Fell Sharply in Q4.” According to Kantar Media’s recent data, investments in both search and display ads fell by 6% in the last quarter of 2011. The decline is part of an overall trend, with advertising in all media drooping by 1% from the same time in 2010.
Writer Douglas Quenqua elaborates:
Paid search was down 6.4 percent from the same period in 2010, led by pullbacks from the financial, insurance and local sectors. Display spending dropped 5.9 percent as auto manufacturers, telecom providers and travel companies tightened their belts.
Advertising in television is faring better than in other markets, boosted mainly by investments in sports programming. Interestingly, ads during Fox’s X Factor singing show also significantly bolstered TV’s numbers during 2011’s final quarter.
Magazines and newspapers are faring poorly, particularly Sunday magazines. The article suggests that these dollars may be heading into the digital realm, perhaps into platforms not currently being measured. Television, however, looks like it will continue going strong for the foreseeable future. No surprise there.
Cynthia Murrell, March 23, 2012
Sponsored by Pandia.com
Online Ad Revenue Decline: Implications for Google?
March 17, 2012
The digital advertising industry took a hit in the last quarter of 2011, experiencing about a six percent decline in both display and search, recently released statistics from Kantar Media, which we learned about in ClickZ’s “Spending on Digital Ads Fell Sharply in Q4.”
The optimism of the alleged economic recovery seems to be false, if the Kantar data are accurate. The firm’s numbers show display ad revenue slipped 5.9 percent compared to the same quarter in 2010, while paid search dollars took a somewhat surprising 6.4 percent downturn. Leaner spending by telecommunications providers, automobile manufacturers and businesses in the local sector as a major factor, Kantar Media reports.
But display and search were not the only ad sectors hurt by the overall economic climate. Kantar’s statistics indicate the entire ad industry suffered a one percent revenue drop compared to 2010, marking the first time a quarter’s revenue declined since the end of 2009 and dashing the hopes of many for a recovery. Perhaps this trend is motivating Yahoo to outsource advertising and Google to take steps to enhance its advertising platform.
There were some bright spots. For example, there was a solid football season, the World Series’ seven games and Fox Networks’ new vocalists’ contest The X Factor. Each helped television advertising to couch potatoes growing in the vast wasteland to expand. grow. Kantar reports network TV advertising for Q4 grew 7.7 percent.
Advertising in beleaguered consumer magazines fell 5.2 percent. Sunday magazines’ ad spending dropped 9.8 percent and local newspapers spent 3.9 percent less than last year, marking a continuation of the downward spiral the print industry has been experiencing over the last several years.
Internet ad spending in general gained only slightly with a .4 percent increase in revenue, while online display advertising lost 2.8 percent of its revenue compared to last year, and display ad spending experienced a 5.5 percent decline.
Considering the fact that the revenue streams of search engines like Bing, Yahoo! and Google are made up largely of advertising revenue, some have speculated that these declines in ad spending may push these search engines to charge its users more, shotgun out more ads in hopes of producing clicks which will encourage advertisers to spend more, or saturate a market sector for big spenders who want to reach anyone who is looking for a hotel, airplane flight, or celebrity news item..
“If true, this is bad news for those depending on online ad revenues,” said Google expert Stephen E Arnold, who maintains the site www.arnoldit.com. “If Google revenues go south, the company will take immediate and direct action to pump up revenues and sustain growth. After 13 years of trying to diversify revenue, Google is living up to Steve Ballmer’s quip that ‘Google is a one trick pony.’ The pony is aging now.”
Jonathan Tressler, March 16, 2012
Sponsored by Pandia.com
Quote to Note: Publisher Strips the Internet Bare
March 15, 2012
Quote to Note. Interesting write up by a poobah fearful of losing his elephants. Point your vile browser thing at “John R. MacArthur: Internet Con Men Ravage Publishing.” Here is the quote I noted:
As far as I know, there isn’t a single profitable online-only magazine or newspaper in the United States and there isn’t a single profitable newspaper or magazine with an online edition that is seriously considering dropping its print edition.
The write up was free when I located the essay. I don’t have much of an opinion on the arguments in the poobah’s write up. Too late.
Stephen E Arnold, March 15, 2012
Sponsored by Pandia.com
More NASA Technical Excitement: Hackers in the Entity
March 13, 2012
One hopes that some good will come of this.
At one point last year, “Hackers Had ‘Full Functional Control’ of NASA Computers,” reports BBC News. NASA had 5,408 computer security incidents in 2010 and 2011. Furthermore, from April 2009 and April 2011, the agency lost track of 48 its own mobile computing devices through loss or theft. On top of that, this incident; the article reports:
“[NASA Inspector General Paul K.] said that the attackers had ‘full system access’ and would have been able to ‘modify, copy, or delete sensitive files’ or ‘upload hacking tools to steal user credentials and compromise other NASA systems’. . . . Mr. Martin said NASA was a ‘target-rich environment for cyber attacks’. He said that the motivation of the hackers ranged from ‘individuals testing their skill to break into NASA systems, to well-organized criminal enterprises hacking for profit, to intrusions that may have been sponsored by foreign intelligence services’”.
Graduated degrees of bad news for the agency. NASA has since claimed “significant progress to protect the agency’s IT systems.” Note they don’t claim it’s locked down tight.
Officials do insist that “at no point in time have operations of the International Space Station been in jeopardy due to a data breach.” That’s good to know.
NASA has been licensing nifty technology to help the agency “manage knowledge.” Let’s hope NASA gets its knowledge under control or there will be more unfortunate incidents at an agency which is supposed to be darned good at technology. I am beginning for formulate some doubts about NASA’s technical capabilities.
Cynthia Murrell, March 13, 2012
Sponsored by Pandia.com
Tools for Mobile Sites
March 9, 2012
The unstoppable adoption of smartphones has led to a need for drastic mobile web site optimization according to the article “Mobile Site Mania” on RetailSolutionsOnline.com. The push to develop either exclusively mobile sites or main pages that are simplified to view on a smartphone has almost reached a frantic pace as competitors race to be the first and best in mobile business.
This article suggests that growing use of phones and tablets have necessitated tweaks to sites in the form of simplification and tools especially intended for mobile users. Simple changes included confining menus to the margins and imbedding fewer photos and text on pages that once strove to be elaborate. Tools that are gaining more use include buttons to call or email the business directly and GPS to automatically provide the nearest relevant location.
Many are going a step further with software to ease the transition to mobile and allow for customization to fit specific customer needs.
From the article:
“Some vendors have released technology for mobile that provides interchangeable brand encounters across touchpoints to reduce frustration and accelerate cross-channel sales. For example, Oracle Endeca for Mobile allows your mobile customers to search and browse your entire product catalog, watch videos, create wish lists, download PDFs, read and write user reviews, and proceed through checkout — all from their mobile devices.”
Specialized software vendors like Endeca will allow for such ease of use that we will likely continue to see a merging of web and mobile features and functionality. It will be interesting to see if one platform overshadows another in the near future.
Derek Clark, March 9, 2012
Sponsored by Pandia.com
Exogenous Complexity 5: Fees for Online Content
March 7, 2012
I wanted to capture some thoughts sparked by some recent articles about traditional publishing. If you believe that the good old days are coming back for newspapers and magazines, stop reading. If you want to know my thoughts about the challenges many, many traditional publishers face, soldier on. Want to set me straight. Please, use the comments section of this Web log. —Stephen E Arnold
Introduction
I would have commented on the Wall Street Journal’s “Papers Put Faith in Pay Walls” on Monday, March 5, 2012. Unfortunately, the dead tree version of the newspaper did not arrive until this morning (March 6, 2012). I was waiting to find out how long it would take the estimable Wall Street Journal to get my print subscription to me in rural Kentucky. The answer? A day as in “a day late and a dollar short.”
Here’s what I learned on page B5:
As more newspapers close the door on free access to their websites [sic], some publishers are still waiting for paying customers to pour in.
No mention of the alleged calisthenics in which the News Corp.’s staff have undertaken in order to get a story. But the message for me was clear. Newspapers, like most of those dependent on resource rich, non digital methods of generating revenue, have to do something. In the case of the alleged actions of the News Corp. I am hypothesizing that almost anything seems to be worth considering.
Is online to blame? Are dark forces of 12 year olds who download content the root of the challenges? Is technology going to solve another problem or just add to the existing challenges?
Making money online is a tough, thankless task. A happy quack to http://www.calwatchdog.com/tag/sisyphus/
My view is that pay walls are just one manifestation of the wrenching dislocations demographic preferences, technology, financial larking, and plain old stubbornness unleash. The Wall Street Journal explains several pay wall plans; for example, the Wall Street Journal is $207 a year versus the New York Times’s fee of $195.
The answer for me is that I did not miss the hard copy Wall Street Journal too much. I dropped the New York Times print subscription and I seem to be doing okay without that environmentally-hostile bundle of cellulose and chemically-infused ink. Furthermore, I don’t use either the Wall Street Journal or the New York Times online. The reason is that edutainment, soft features, recycled news releases, and sensationalism do not add value to my day in Harrod’s Creek, Kentucky. When I look at an aggregation of stories, sometimes I click and see a full text article from one of these two newspapers. Sometimes I get the story. Sometimes I get asked to sign up. If the story displays, fine. If not, I click to another tab.
When I worked at Halliburton NUS and then at Booz, Allen & Hamilton, reading the Wall Street Journal and the New York Times was part of the “package”. Now I am no longer a blue chip “package.” I am okay with that repositioning. The upside is that I don’t fool with leather briefcases, ties, and white shirts unless I have to attend a funeral. At my own, The downside is that I am getting old, and at age 67 less and less interested in MBA wackiness. I have no doubt I will be decked out in my “real” job attire. For now, I am okay with tan pants, a cheap nylon shirt, a worn Reebok warm up jacket, and whatever information I can view on my computing device.
Newspaper publishing has not adjusted to age as I have. Here’s a factoid from my notes about online revenue:
When printed content shifts to digital form, the online version shifts from “must have” to “nice to have”. As a result, the revenues from online cost more to generate and despite the higher costs, the margins suck. Publishers don’t like to accept the fact that the shift to online alters the value of the content. Publishers have high fixed costs, and online thrives when costs are driven as low as possible.
Net net: Higher costs and lower revenue are the status quo for most traditional publishers. Sure, there are exceptions, but these are often on a knife edge of survival. Check out the hapless Thomson Corp. Just don’t take the job of CEO because it is a revolving door peppered with logos of Thomson and Reuters and financial results which are deteriorating. Think Thomson is a winner? Jump to Wolters Kluwer, Pearson, or almost any other “real” publishing outfit. These are interesting environment for lawyers and accountants. Journalists are not quite as sanguine as those with golden parachutes and a year or two to “fix up” the balance sheets.
Identity Theft and Social Media Scares
March 7, 2012
Ah, The Culture of Fear is finally reaching social media. With search morphing from precision and recall to asking one’s closest online pals, fear and search may now become unlikely bed fellows.
I came across an interesting article today (while taking a break from browsing my social media accounts on my smartphone) titled, “Smartphone, Social Media Users at Risk for Identity Fraud.” According to the piece, smartphone owners and social media users have an increased risk of becoming a victim of identity theft because of a lack of adequate security settings. A recent report on identity fraud by Javelin Strategy and Research found that 7 percent of smartphone users were victims of identity fraud last year, compared to the 4.9 percent rate among the general population. The article tells us more:
Around 62 percent [of smartphone owners] said they don’t use a password or a pin code to lock their devices. About 32 percent admitted to saving log-in information on their devices. Social media and mobile behaviors made users more vulnerable to fraud, according to the report. Users of social networking services, such as LinkedIn, Google+, Facebook and Twitter, had the highest incidence of fraud. Consumers who actively engage with social media and use a smartphone were found to have a disproportionate rate of identity fraud than consumers who do not use in these services.
Because of GPS-enabled location data and personal information shared over these networks, users are putting themselves at risk. However, when it comes to sharing information on smartphones and social media, users’ fear may be misdirected and misinformed. It seems to me that a 2 percent increase in identity theft possibilities might not be the biggest of our problems.
Andrea Hayden, March 7, 2012
Sponsored by Pandia.com
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