A common lament about efforts to develop new business models for news is that digital journalism can’t generate the revenue that newspapers used to.
Let’s set aside that digital journalism doesn’t have the production and distribution costs of newspapers. Let’s set aside that news media companies have barely started to explore the revenue possibilities of direct sales, local search and other possibilities I explored in explaining the revenue approach of my Blueprint for the Complete Community Connection.
In advertising alone, opportunities loom as promising as the revenue streams that historically supported newspapers.
In its 2010 U.S. Local Mobile Advertising & Promotions report, Borrell Associates projects that local mobile advertising will grow to $11.3 billion in 2014, up from in $200 million in 2009 and $500 million projected for this year. That’s potential annual growth of $10.8 billion, a huge opportunity for companies that become the leaders in local mobile advertising. Here’s how big that opportunity is:
- Bigger than the total drop in advertising in newspapers last year. Keep in mind that it was a historically disastrous year for newspapers, with print advertising revenue declining by $9.9 billion and 29 percent. And the local mobile advertising opportunity is bigger than that.
- Bigger than newspapers’ decline in retail advertising since 2005. From 2005 to 2009, newspapers’ retail advertising collapsed by $8 billion and 36 percent. And the local mobile advertising opportunity is bigger than that.
- Bigger than total newspaper classified advertising revenue in 2008. Classified advertising was in decline in 2008, a year that felt horrible at the time for newspapers, but looks pretty good now. Classified still accounted for 29 percent of newspapers’ print ad revenue that year. And the local mobile advertising opportunity is bigger than that.
- Bigger than any of the newspaper classified advertising verticals at their peaks. Real estate peaked at $5.2 billion in 2006. Autos peaked at $5.2 billion in 2003. Employment advertising peaked at $8.7 billion in 2000. And the local mobile advertising opportunity is bigger than any of those.
(All these figures come from the Newspaper Association of America. They are not adjusted for inflation.)
Now, competition for the local mobile advertising market will be fierce. News media companies with strong local brands and local sales staffs will have advantages in pursuing a share of the emerging market. But they will fritter away those advantages (again) if they don’t understand the mobile market and make its pursuit a top priority.
I will talk about these measurements of the mobile opportunity today in a webinar, Leading a Mobile-First Newsroom, for the American Society of News Editors. My slides for that presentation are here. Participants in the webinar may also want to read my earlier posts on mobile opportunities:
- News organizations need mobile-first strategy
- News companies need to help local businesses pursue mobile opportunities
- How news organizations need to change to pursue a mobile-first strategy
- A mobile-first project for your community on the go
- Students’ media use shows journalism’s future
- Tomi T. Ahonen’s view of the present and future of mobile
- Experts’ view of mobile: the opportunity of our lifetime