The migration from print to online for news and business information has pushed down the money made from print ads.
Editor’s Note: Search engines are printing money, and even entering the print ad market in Google’s case. Has online advertising taken some of your print ad dollars? Copy us on your thoughts at WebProWorld.
In the distant past of 1995, InfoWorld was my primary source of technology information. I found that by following the magazine, and never missing a Bob Metcalfe or Stewart Alsop column, my tech education was progressing nicely. I even discovered that I was better informed than my superiors, and that helped me move up the IT food chain.
An InformationWeek article reminds me of how far the Internet has gained in importance for tech information. That article notes how revenue for the news and trade markets grew 8.7 percent in 2004, but will likely be half that in 2005.
That doesn’t come as much of a mystery to those following the online advertising industry. Jupiter Research noted last month that revenue from search engine ads will double within five years to nearly $19 billion.
Yahoo had more than $1 billion in online ad revenue in the first quarter of 2005; that rose to $1.25 billion for the second quarter. Google’s second quarter ad revenues were slightly higher at $1.36 billion. All that money comes at the expense of other media outlets, as the print world has seen.
Part of that change has happened as users switched from waiting for the weekly trade journal to arrive to going online for answers. Search engines like Google and Yahoo turn up multiple sources for pretty much every tech issue that exists.
Sites (besides the two mentioned) supported by advertising revenue, and blogs created by individual users, have picked up that traffic. According to research firm Outsell’s Market View report, individuals are spending 15 percent less on printed news and trade journals than they did in 2001.
The article discusses how the news and trade industries have seen print ad revenue drop, and that lower cost online ads aren’t covering those losses. As online ads gain in importance, a rise in their rates will eventually offset that print ad revenue loss.
InformationWeek doesn’t touch on one aspect of individuals and their purchasing habits, as they might relate to publications like themselves and InfoWorld. That aspect would be outsourcing. As tech companies have aggressively placed jobs in low-cost countries, American employees have found themselves changing fields. Why would someone keep buying tech magazines when embarking on a new career?
With fewer prospects for tech employment in the US, fewer students choose to enter the computer science fields in college. That leads to fewer tech trade readers, print or online, which now impacts print advertising to a much greater degree.
Broadband penetration in the US market has given more households the means to access high-bandwidth video content. News organizations like CBS and CNN have been racing with others to meet that demand, and monetize it via advertising. They can meet the higher expectations of an audience that no longer finds print as compelling a medium. Print media will have to adjust its revenue expectations to match the change in demand.
David Utter is a staff writer for Murdok covering technology and business. Email him here.