Newspaper Web ad revenue won’t replace print dollars, says WAN
How much will consumers pay for online content? 62 percent
One more tidbit from last week’s World Association of Newspapers confab in Barcelona: a study by PricewaterhouseCoopers on exactly how much consumers will pay for news online.
The answer: 62 percent of what they pay for news in print. The interviews were done with 5,000 people in seven countries. The research found Americans willing to pay the most (68 percent) and Dutch the least (38 percent), with consumers in Canada, France, Germany, Switzerland and the UK falling in between.
The categories with the highest potential for charging online: financial (97 percent said they’d pay) and sports news (77 percent).
Surprisingly, mobile ranked low. According to PWC: consumers are currently unwilling to pay for online content on mobile devices. The respondents to our survey indicated that this was mainly due to the difficulty of reading the information on screen. However, additional studies also identify the data transfer charges made by telecom providers as a major factor.
Other findings:
– Since consumers “will choose the cheapest available product with comparable value,” the potential to capture even two-thirds of what’s charged for news in print is severely limited by widespread availability of free news online.
– Although most consumers say they’re most interested in general news, that’s not the news they’re inclined to pay for. Highest potential for paid-for news involves “specialized, targeted and relevant information.”
– Consumers are more inclined to pay for news provided by “high value, topic-specific publications (as opposed to) newspapers providing general news only.”
– Readers of online news “expect to be part of the intellectual debate and to be able to contribute to ‘their’ newspaper, both in terms of commenting on stories and in providing content.”
– Although there is a huge potential for growth online, print remains the largest source of revenue generation for newspaper publishers, and will continue to be so for some time.
– Use of video in online news sites gives the feel of a ‘TV-like’ experience (consumers’ favorite medium for news) giving newspaper brands the opportunity to secure online audiences beyond their print readership and into the television audience more generally.
The full report makes for fascinating reading – highly recommended. You can download it for free here.
U.K. online advertising to grow in 09, but less than 10 percent
We’ve been reporting on online ad spend estimates in the U.S. Now EMarketer weighs in on what’s happening in the U.K.
Earlier this year, the research firm’s prediction was that U.K. online advertising would hit £3.36 billion ($6.41 billion) in 2008—a rise of 27.1 percent over the previous year.
Indeed, according to the Internet Advertising Bureau U.K., PricewaterhouseCoopers, and the World Advertising Research Center, the Internet’s share of all U.K. ad spending rose from 2.5 percent to 18.7 percent in the last five years.
That was then. This is now.
The International Monetary Fund predicts that the U.K. will experience a deeper recession than any other developed nation in 2009, with the economy shrinking by 1.3 percent, and struggling to reach 0.4 percent growth in 2010.
As a result, EMarketer trimmed its projections for U.K. online ad spending in 2008 and 2009 to £3.34 billion ($6.15 billion) and £3.58 billion ($5.30 billion), respectively.
“The good news is that even though advertising in traditional media is down sharply, online is bucking the trend,” says Karin von Abrams, a senior analyst at EMarketer. Online ad spending will still grow in 2009, but at a lower rate of under 10 percent.
Ad spend up in H108…but where will the second half of the year find us?
The report was released yesterday but it already seems out of touch with the reality on Wall Street. The Interactive Advertising Bureau and PricewaterhouseCoopers released figures on ad spending for the first six months of 2008 and the results were positively glowing.
For H108, ad revenues reached $11.5 billion, a 15.2 percent increase over the nearly $10 billion during the same period last year. That was a gain of 26.6 percent over the first half of 2006.
Dig a little deeper and all is not rosy: Although Q2 grew 12.8 percent year-over-year, it showed a slight sequential decline of 0.3 percent from Q1.
Search ads did better than display. Revenue for search totaled almost $5.1 billion for the first six months of 2008. That’s a gain of 24 percent over last year’s $4.1 billion, although not as strong as last year when search ads were up 41 percent.
Display ads were strong though not quite as impressive: H108 saw revenue up to $3.8 billion from $3.2 billion in the same period in 2007, a 19 percent increase.
Performance based deals edged out CPM in 2008. The performance model grew 50 percent in the first half of 2008 while CPM deals’ growth declined slightly with 44 percent gains this year compared to a 45 percent increase the year.
What remains to be seen, of course, is how online advertising will fare in the second of half of 2008 when spending, due to the financials markets, is expected to be down.
The full report with graphs can be found here.
