Online And Offline - Federal Trade Commission
Newspaper economicsOnline and offlineHal VarianMarch 9, 2010(revised March 13, 2010)Google Confidential and Proprietary1
Economics of newspapers Review some of the economic facts about newspapers–Revenues and costs–Advertising level, change and composition–Examine how internet has impacted ad revenue–Examine how internet has impacted reader use patternsSpeculate about what might turn things around–Business opportunities–Technological opportunitiesData sources–US Statistical Abstract–Newspaper Association of America Trends and Numbers website–Pew Foundation–Academic books and publications
Revenue and costsCosts as % of revenueRevenue 9%Prodn & tribution14%Raw materials18%Total100%100Total87%Internet distributioncould cut productioncosts by at least half.Source: Vogel, H, Entertainment Industry Economics, 7th edition, page 34387%
Ad spend in US by medium: 1995-2008Note drop in newspaper and TV revenue, rise in cable TV, relative constancy ofdirect mail, and rise in internet spend. Note that newspaper ad revenue is 3times as large as internet ad revenue.Source: US Statistical Abstract
Media share of US Advertising 1959-2009Source: Martin Langeveld at Nieman Journalism Lab; data from NAA, TVB, IAB, McCann
Newspaper ad revenue and GDP (constant dollars) GDP and newspaper ad revenue drop during recessions. Inflation-adjustednewspaper ad revenue stagnated way before the internet became popular.Note: growth stopped pre-InternetSource: Newspaper Association of America
Ad revenue by type (constant dollars) Online ad revenue is about 8.2% of total newspaper ad revenue. Local retail adrevenue has grown, but national brand advertising and classified havedeclined.Source: Newspaper Association of America
Ad revenue by type (proportions) In the last 5 years, classified revenue has declined in relative terms and onlinehas grown, but is still a tiny fraction of total.Source: Newspaper Association of America
Revenue and circulationCirculation has declined since 1990 andcollapsed in the last 5 yearsCirculation per capita has been decliningfor decadesRevenue per paid circulation has increasedover time, but declined recentlyLong term problem: circulationShort term problem: ad pricesSource: Newspaper Association of America
Daily newspaper circulation (000)Source: Newspaper Association of America
Circulation per householdSource: Newspaper Association of America
Trends in news accessSource: Pew Research
Access to news via mobile phonesHow many get news by phones?26% of all Americans43% of those under 5015% of those over 50What do they look for?72% weather58% current eventsMultiple sources?60% get news from online and offline sources46% said they use 4-6 different media80% get news from emailed linksSource: Pew Research
Online and offline access to news Online for month of June 2009– Unique audience: 70 million– Web page views: 3.2 billion– Sessions: 600 million– Pages per person: 49– Sessions per person: 8.5– Time per person: 38 min Online page views of news areonly 3% of total news pageviews! Less than 1% of time spentonline is at newspaper sites. But people access online newsoften. Offline for 2008– Unique audience: 117 million (2.12 readers per copy) – Pages read per day: 24?– Page view per month: 87 billion per month– Online page view/Total page views 3.2%– Time spent online news/Time spent total news 3% ppensonline/
Online news consumption
Media usage by consumers
Daily Internet Activities
Online news accessed while working, offline newsaccessed during leisure timeweekendweekendweekend Good news: online news can reach people when they were not accessiblebefore Bad news: they don't have much time to read it Possible solution: turn online news into a leisure time activity (mobile phones,tablets, etc.) Source: Google
Value of clicks sent to newspapers According to comScore, searchengines drive 35%-40% of trafficto major US new sites Assuming that this monetizes aswell as other traffic, this meanssearch engines are driving aboutsame fraction of online adrevenue But online ad revenue is only 5%of the total The search click sent tonewspaper includes the querythat generated that click, so wecan classify the kinds of clicksthat newspapers receive fromsearch enginesSource: comScore
Search clicks to newspapers Recall that search is encoded in referrer URL–So you can see the query associated with news clicks–Compare queries that go to “newspapers” to general queries–Aggregate this up to categoriesWhere are the (proportional) differences?–Many more news clicks for Sports, News & Current Events, Local–Fewer news clicks for Travel, Health, Shopping–About the same for Entertainment, Computers & ElectronicsWhere's the money?–Travel, Health, Shopping, Computers & Electronics–Basically online world reflects offline: news, narrowly defined is hard tomonetize.–Despite the fact that it is frequently and widely accessed
Newspapers never made money from newsWhere did newspapers make money?Business page, Automotive, Home and Garden, Travel, Real Estate,TechnologyNot the front page – the newsWhere do consumers go now for this information?Yahoo Finance, Edmunds, Amazon, Orbitz, Zillow, etc.Contextual targeting works!People who visit the auto page are interested in autosBut what ad do you show next to an earthquake story?Three big problems for newspaper advertisingCross subsidization model no longer works: people go online to specializedsites for purchases, bypassing newspapersIt is hard to do contextual targeting for pure “news”People spend much less time reading online news compared to offline news
Revenue by advertising verticals for newspapersVerticalGeneral MerchandiseFinancialHome Supplies / FurnitureComputers / ElectronicsFoodCoupon Marketing OrganizationHobbies / Toys / SportsApparel & AccessoriesBuilding MaterialsPublic Service Utils/TelecomTransportation/Motion PicturesMiscellaneousAutomotive AftermarketPublishing/MediaAutomotivePolitical/ GovernmentMail OrderMedical/ToiletriesRecords / Books / CardsInsuranceApparelHH Equipment/AppliancesBusinessComputer : Newspaper Assoc of America
Value of news This doesn't mean that news isn't valuable to users Over half of internet users read news online But they don't spend much time on itCan you charge for news? Raw news may not be highly differentiatedProblem of Bertrand competition: with undifferentiated product, price gets competeddown to marginal costSo have to have significant product differentiation to be economically viable Local high school football scores (but what about twitter?) Specialized industry content Something that cannot easily be imitatedAnd (of course) news is hugely valuable from a societal point of view
ConclusionsNewspaper ad revenue is where it was in 1982 in inflation-adjusted dollars. Revenueper reader has grown, but number of readers has dropped dramatically: paidcirculation per capita is half what it was in the 60s.The medium with the largest increase in ad revenue since 1995 is cable TV, not theinternet. Total newspaper ad revenue is 4 times as large as online ad revenue.Online readership is only 3% of total readership in terms of time or pageviews; adonline revenue is only 8.2% of total newspaper revenue. Time spent per onlinenewspaper visit is a bit more than 1 minute per day, compared to 25 minutes perday for offline reading.Search engines provide 35-40% of traffic to major US newspapers sites, but ingeneral, clicks to newspapers are not in highly monetizable verticals.Newspapers used to cross-subsidize news with more commercial sections. However,this has become much more difficult to do because of the fact that online readerstend to access news narrowly defined, which is difficult to monetize.Access to online news is a labor-time activity, while traditional access to offline newsis a leisure time activity. Increasing leisure-time access to news may bepromising.
What can be done? Online newspapers need more user engagement–– Engagement is currently low, need to increase itExperiment, experiment, experiment!– Living Stories, Starred Stories, Fast FlipNew devices may affect reading habits–Computer access to online news happens at work–Tablets may make a big difference in engagement–Interactive graphics, video, unique content, etc–Merge TV, magazine, radio, newspaper experienceNewspapers should better exploit the information they have–Direct measures of what users seek and what they read–More product reviews, more video, more local news–Better ad effectiveness measurement–Better contextual targeting
General Sources Newspaper Association of America–Trends and US Statistical Abstract– http://www.census.gov/compendia/statab/Harold L. Vogel–Entertainment Industry Economics, Cambridge Pew Research, www.pewtrusts.org Martin Langeveld,–CIRClabs, www.circlabs.com–Nieman Journalism Lab, Harvard Univ, www.niemanlab.org
Sources by slide02: Vogel, H, Entertainment Industry Economics, 7th edition, page 34304: /10s1243.xls05: Martin Langeveld at Nieman Journalism ebsites.aspx06: penditures.aspx07: penditures.aspx08: penditures.aspx09: culation.aspx10: culation.aspx11: m.html#ht12: kes-newspapers-as-news-source13: ndia/statab/2009/2009edition.html18: Google ising-Expenditures.aspx
Newspapers used to cross-subsidize news with more commercial sections. However, this has become much more difficult to do because of the fact that online readers tend to access news narrowly defined, which is difficult to monetize. Access to online news is a labor-time activity, while traditional access to offline news is a leisure time activity.
most spread opinion about the online-offline marketing relation. By analysing different perceptions and opinions about online and offline marketing, this paper will elaborate the relationship between online and offline marketing. Firstly, both marketing terms have to be defined in order to create a comparable basis.
Basics Offline Lessons Mental Wellness Basics is accompanied by 8 offline extension lessons, discussion questions, and classroom activities that extend the concepts in each lesson. Each offline lesson can take approximately 25-75 minutes to complete. The offline lessons are scaffolded, building off of the digital lessons and extending learning .
From the Original Offline Computer: Within 24 hours, transfer the response file from the device to the original offline Local License Server. On the Complete Offline Activation tab, select 3 Use the response file to update licenses on the original offline server. Enter the location of the response file and then click Update Licenses.File Size: 831KB
Selecting "Intrastat application offline" menu (Fig. 4), the main window of the Intrastat offline application will open (Fig. 5). Figure 5. Intrastat offline application main window In 2013 the first operation to be executed in the offline Intrastat application after installing is uploading the 2013 Combined Nomenclature.
Once your ad account is set up, you can create an offline event to track your offline conversions: Next, you need to add your offline sales data into the system in order to match sales with Facebook ad campaigns. There are a few different ways to do this: 1. Add offline sales data manually by uploading a CSV file to Facebook Business Manager. 2.
enhance the brand image and use offline retailing as a marketing tool to reach a larger customer group and ultimately enhance the company's profit. The findings present several problems within each case that can be solved by expanding into offline retail. The first problem is about suppliers that protect offline retailers.
online payment and offline experience are supported. On the whole, the existing research on online and offline integration is fragmented and lack of systemic. 3. Online Sales and Physical Stores based on the Marketing Mix Support McKinsey's 4P is known as the traditional marketing portfolio, concise and easy to remember,
intersection of online and offline retail distribution. We first provide a brief overview of the effects of online distribution and the associated potential challenges for competition policy. In the first paper, we present a framework for the economic modelling of competition between online and offline retailers.
