Submitted by: Ulbe Jelluma 02/05/2017
This year a number of publications is trying to correct the perception of the success of online newspapers. Yes, the circulation figures of printed newspapers are declining and indeed the ad revenues are slowing down each year. But somewhere in this industry discourse that is pro-digital and anti-print, realities are hidden. This article tries to unravel the paradox of the continuing positive news about digital media and the reality of digital performance of newspapers.
The newspaper organisation WAN-IFRA recently published a report on the print-online performance gap. This report uses the research done by Iris Chyi (Associate Professor and new media researcher at the University of Texas) on newspapers in the USA.
SELECTED US NEWSBRANDS: POOR ONLINE PERFORMANCE
The report paints the lack of performance of the digital editions of US newspapers. The study is based upon 51 regional US newspapers (excluding the newspapers with an international readership as NYT and WSJ). Within two years after the internet became publicly accessible, the first newspaper became online in 1995. Some 10 years later, while publishers had launched their digital news sites, publishers and media observers, were already discussing the “death of newspapers”. They were confident that the media future would be digital and that printed newspaper would not be part of that future.
Whereas digital became increasingly important for publishers, print revenues were and still are the dominant source of revenues for newspaper publishers as the above graph shows. Total advertising revenues are decreasing since 2006, with the strongest absolute decrease for advertising in the print editions. Advertising on the online versions of the newspapers do however not compensate this decrease. By far. In 2014 the online share of revenues is only at 18%, without any indications that it will quickly increase.
To the contrary, the report mentions that at least three out of five publicly traded newspaper companies declared decreases in digital ad spent in 2015. In fact, digital readership has not increased in reach from 2007 (9,8%) to 2015 (10%). On the basis of these data, newspapers will continue to exist when enough money is put behind the print edition instead of putting large sums behind adtech for the online edition.
READING TIME SELECTION BRITISH NEWSPAPERS
UK AND US NEWSPAPER PRINT READERS OUTNUMBER ONLINE READERS
A report from Neil Thurman (Munich and London City University) based upon 11 British newspapers might provide an explanation. On the basis of his research he shows that of the total time spent with a newspaper, 88,5% is with the print edition and only 11,5% with the online offering. And on top of that, the reading time of the print edition is five times longer (40 min/day) than the online version (0,49 min/day).
When taking the total reading time (or share of consumption), the difference between offline and online is huge. The chart above, from the study done by Thurman, shows for a selection of UK newspapers the print edition reading time and the PC and Mobile reading time (all for a full year). This measurement reveals an inconvenient truth, or as Denise Turner calls it, an unbelievable truth, about the performance of online performance and at the same time underlines the importance of the print edition. Or as Thurman says: "Scale those numbers and you can see why newspapers still rely on print for vast majority of the attention they receive". (Certain UK newspapers are extremely successful online because they attract an international audience,; Mail - 53 mio visitors and The Guardian- 42 mio).
In the USA, newspapers’ print audience outnumber the online audiences. The average print readership (expressed in reach) is 28,8%, whereas the reach of the online newsbrand is only 10%. This seems to be a poor result after 20 years digital innovation. This figure is also true for the youngest age group (18-14y): the average reach of the print editions is with 19,9% more than twice the reach of the online edition (7,8%). This is true for the 51 newspapers that were part of the Chyi study. This list does not include titles such as New York Times (70 mio online visitors), Washington Post (47 mio) or Wall Street Journal (40 mio).
In an analysis made by Thomas Baekdal, a Danish media strategist, two lines are added to the graph with the newspaper advertising revenues. The additional lines show the growth of Facebook advertising revenues and the spectacular growth of Google ad spent. This chart proves the point that online newsbrands are not generating the required advertising revenues to guarantee the future of newspapers. A few might do, but the majority should probably focus on their print edition.
THE INDUSTRY IS BLIND
The WAN-IFRA reports also discusses the narrative that ‘Print is dead’. This narrative continues to exist as the industry clearly favours the digital world. Advertisers and their agencies prefer the shiny, new, optimistic, innovative media, and often justify this decision by referring to the declining reach of newspapers. However, they might be working on a self-fulfilling prophecy. With less advertising or less valuable advertising, going into digital newspapers, it will indeed be very difficult for newspapers to survive. From $3,2 billion in 2007, the online advertising spent increased only to $3,5 billion 7 years later. Whereas during the same period the advertising in the print edition plummeted from $42,2 billion to $16,4 billion. It might look like the advertisers left the print editions before the readers did.
The good news in the US is that newspapers still reach 33,3% of their population and most (86%) of the readers are paying for a print edition at $300-500 a year. Clearly, they prefer print over online versions of the same newsbrand.
THE VALUES OF PRINT
The various researchers point at a number of strengths of the print edition: better resolution (absence of flicker, better contrast ratio); tangibility; layout based upon a decades-long, continuous process of optimisation; deeper brain impressions of information; information more easily recalled and finally encouraged prolonged attention (because of lack of offline nature).
ALTHOUGH DECLINE IN CIRCULATION, INCREASE OF EFFECTIVENESS
The UK-based organisation Newsworks refers to a study done by Peter Field that shows that campaigns including print were 39% more effective than campaigns without print (during the period 1998-2004). During the period 2010-2016, this difference in effectiveness rose to 67%. Demonstrating with actual facts that campaigns including print media have become more effective and increase the effectiveness of other channels in an ever more competitive media world.
Newsworks adds to this that newsbrands are also more likely to drive sustainable share growth, attract new customers and increase loyalty among existing customers. They reduce price sensitivity and therefore reduce the need to rely on short-term cost cutting promotions. Resulting in bigger profits.