HOME
          
LATEST STORY
A conversation with David Rose, little magazine veteran and publisher of Lapham’s Quarterly
ABOUT                    SUBSCRIBE
Nov. 13, 2008, 6:25 a.m.

Newspapers better hope Nick Denton’s wrong on advertising in ’09

Nick Denton, publisher of Gawker Media, has backed up his recent dire forecast of a potential 40-percent decline in advertising with a set of “doom-mongering” charts and graphs. His focus, naturally, is on Internet advertising — and he took his premonition to heart yesterday by consolidating two of his sites and putting a third up for sale. But if Denton is anywhere close to right, the most significant consequence will the be the death of many small newspapers in 2009.

An important caveat is that Denton’s 40-percent figure, no doubt intended to grab headlines, is based on a painful U.S. recession akin to Indonesia’s collapse in 1997. That’s unlikely, but even a milder recession — Denton points to Sweden between 1990 and 1993 — would lead to a 27-percent advertising decline under his model. (Actually, the model belongs to Mary Meeker, an analyst at Morgan Stanley, who hasn’t made such dramatic predictions and has recently been emphasizing the bright outlook for online advertising after the current recession lifts.)

So what does this all mean for small newspapers? Nothing good.

The tips that Denton offers for surviving the recession aren’t really applicable to most print publications, which can’t, for instance, “get out of categories such as politics to which advertisers are averse.” (That point is perhaps Denton’s most frustrating piece of realism; his entire business model is based on his ability to pick profitable niches in a way a print daily can’t. Denton sold his politics blog, Wonkette, in April.)

Newspapers, meanwhile, still suffer from what Scott Karp has called the “10% problem,” which is that just 10% of their readers but 90% of their revenue is in print. None of this is new, but the recession could make it fatal.

And what about those upsides highlighted by Meeker? Those are actually just further downsides for most newspapers, although I think there are some lessons in there, too. In a presentation earlier this month, Meeker laid out the “difficult near-term outlook” for Internet advertising but also pointed to three pieces of “good news.” Her most optimistic point was that search advertising continues to grow, both in CPM (how much advertisers pay per thousand impressions) and share of online advertising. These two slides she presented make the point well:

That’s not particularly helpful to newspapers that aren’t much in the search business, though it’s certainly a sign that they should be. It isn’t enough to offer searches of your own content. Local newspapers need to position themselves as the search engine of choice for their communities. Boston.com, the website of The Boston Globe, has had success with its local search function, which offers content from the Globe as well as other local news outlets and bloggers. (A search for the Nieman Foundation turns up our address, articles in the Globe and Harvard Crimson, posts by a local media blogger — and sponsored results.) It’s a good service that The New York Times Co. has rightfully touted as “forward thinking.” And it’s not like newspapers have much of a choice because look at whom Meeker expects search ads to continue taking revenue from:

POSTED     Nov. 13, 2008, 6:25 a.m.
SHARE THIS STORY
   
Show comments  
Show tags
 
Join the 15,000 who get the freshest future-of-journalism news in our daily email.
A conversation with David Rose, little magazine veteran and publisher of Lapham’s Quarterly
“I hear the argument, Oh, these poor little magazines with their tiny readerships, if only people appreciated them more. It’s partly true. But the bigger side of that is, well, if only you knew how to read a budget. If only you actually knew anything about publishing.”
The New Inquiry: Not another New York literary magazine
For New Inquiry publisher Rachel Rosenfelt, building cultural significance was easy — building a sustainable business is the hard part.
iOS 8: How 5 news orgs have updated their apps for Apple’s new operating system
ABC, the AP, Breaking News, The Guardian, and The New York Times have all updated apps (or introduced new ones) to take advantage of new features on iOS 8.
What to read next
753
tweets
How a Norwegian public radio station is using Snapchat to connect young listeners with news
“A lot of people check their phones before they get out of the bed in the morning, and they check social media before the news sites.”
727When it comes to chasing clicks, journalists say one thing but feel pressure to do another
Newsroom ethnographer Angèle Christin studied digital publications in France and the U.S. in order to compare how performance metrics influence culture.
714Wearables could make the “glance” a new subatomic unit of news
“The audience wants to go faster. This can’t be solved with responsive design; it demands an original approach, certainly at the start.”
These stories are our most popular on Twitter over the past 30 days.
See all our most recent pieces ➚
Encyclo is our encyclopedia of the future of news, chronicling the key players in journalism’s evolution.
Here are a few of the entries you’ll find in Encyclo.   Get the full Encyclo ➚
Las Vegas Sun
Wikipedia
Kaiser Health News
GateHouse Media
Franklin Center
USA Today
Amazon
Foursquare
Connecticut Mirror
Grist
Zonie Report
Chicago News Cooperative