Lately the bad news has been piling up for traditional media giants such as McClatchy (newspapers) and RH Donnely (yellow pages), and their many counterparts of equal or lesser size. All of their ad revenue is quickly moving online and specifically to major players such as Google.
So what will ultimately happen? For the yellow pages, I think they will disappear from the landscape rather soon, probably within 3-4 years. The business model of publishing once a year, the massive printing and distribution costs, and the hassle of using, storing, and disposing of the book is simply antiquated. For a web design/marketing business like ours we were simply waiting for the right time to cancel all our ads and I feel many people are in the same position. By that, I mean that for several years we have known that very little business was gained through the yellow pages, but we have continued our ads because as a market leader we felt that it was important to be found everywhere. Now, however, we feel that customers that find us through traditional media are so far removed from the early adopter curve we probably would find it difficult to work with them anyway.
I have never really had a soft spot for the yellow pages since I have a fundamental disagreement with how their pricing is structured.
- Most media is targeted and the ad buyer’s decision to purchase is driven by the cost per impression/subscriber/book distribution, etc. The point I argued with Bellsouth/ATT was that more than 60% of the books they distribute are of no value to me. As opposed to a plumber who’s services could be valuable to homeowners and businesses alike we are only a B-to-B service provider so all of the residential books they tout in their distribution statistics are useless to us, so why should we pay for them?
- In our particular industry the book competes directly with us. There is nothing more frustrating than paying for a full year ad for $15-20k and having your ad trumped by none of your regular competitors, but by Bellsouth/ATT themselves pitching their crappy web services. When questioned about it they subscribe to the rouse that they pay for the ads just like everyone else and there are two separate companies, etc. Yeah, right.
Newspapers. The crystal ball is a little more hazy for this group. After all much of the quality content which we consume online originates from traditional sources. During the never-ending presidential campaign how many times did the New York Times or the Washington Post factor into the national discussion? I think the answer is they are still very much relevant. Likely the physical distribution will slacken over the next 5-10 years until it reaches a tipping point where it is no longer cost-effective to publish it. People still want good sources for news, so likely at that point many readers are simply consuming the same news online. The subscription model doesn’t seem to work well so likely most news will be free online. Newspapers will just need to be leaner and perhaps operate more virtually to contain costs.
TV. There will always be a place for TV but they also will probably have to get leaner or find different ways to deliver advertising. The TiVo/DVR trend is likely cutting heavily into their advertising. Aside from the Superbowl most people don’t like watching ads and will happily skip through them. The older viewers haven’t all adopted this technology but certainly most younger viewers (of purchasing age) have and will continue to do so. There is probably some fundamental shift in TV ad delivery coming in the next 2-3 years and maybe I’ll be lucky enough to think of it before everyone else. I’m talking about something fundamental like the pay-per-click model of online ad purchasing and delivery vs. traditional banner ad display. Without it the revenue will reach a tipping point where it is no longer lucrative to produce new TV content and we’ll be doomed to watch I Love Lucy and the A-Team for the next 30 years. To be fair I think the day of reckoning for TV is much further off than yellow pages and newspaper – I’d say 5-7 years before something really changes if a new ad mechanism isn’t introduced.
