Jon Dube, Forbes Contributor Digital Media Executive & Advisor
Technology companies such as Google, Amazon, Facebook, Apple “now control the future of news.”
That’s one of the take-aways from the 2012 State of the News Media report, released today by the Pew Research Center’s Project for Excellence in Journalism. The news industry, the report says, “finds itself more a follower than leader shaping its business.”
But I think there’s hope. The report touches on a number of opportunities for traditional media in the digital space – areas that are growing rapidly and still up for grabs. Those include targeted advertising, the mobile/tablet space, and digital video.
Winning in these areas will be tough, given the traditional media’s historical inability to rapidly evolve and the head start other companies have on them.
TARGETED ADVERTISING
A good example is the fast-growing opportunity of targeted advertising, where Google and Facebook dominate and news organizations lag far behind.
The Project for Excellence in Journalism (PEJ) report points out that even though targeted advertising is one of the forms of online advertising expected to grow most rapidly, only a few of the top news sites use it. Meanwhile, the report says, tech companies like Facebook and Google “are using personal data collected over the internet to direct ads to specific consumers to a far greater degree than ever before – and to a far greater degree than most news organizations are capable of.”
While Facebook and Google have taken the lead, news organizations could catch up, if they try. Most have the ability, and at least some data, that would enable them to engage in targeting. A PEJ study of digital advertising at 22 top news sites found that few of them do, however. Of the 22 sites, most did not contain any ads targeted to consumers based on their online behavior, according to the January study. Only three – CNN, The New York Times and Yahoo! News – employed high levels of targeting based on a user’s recent online activity. A handful of others employed limited targeting. (For more, see “Who Advertises on News Sites and How Much Those Ads Are Targeted.”)
While targeted display ads account for just 10% of local online ads, or $1.5 billion, right now, by 2016, they are expected to grow to $14.6 billion and make up more than half the market, according to Borrell Associates.
MOBILE
One of the bright spots in the PEJ report is the research on mobile and tablet usage. Readers spend far more time with news apps on the smartphone and tablet, visit more pages at a time, and return more frequently than they do on conventional computers, according to data from Localytics, a client-based mobile analytics firm. And most importantly, there are signs that mobile news consumption is actually increasing total news consumption – one report from comScore indicates mobile devices increase news site traffic by between 7 and 11 percent.
The good news is mobile and tablet usage are expected to continue skyrocketing. And the ad dollars will shift there as well. Mobile ad spending grew 89% in 2011, to $1.45 billion – and is expected to grow to $10.83 billion by 2016.
News organizations know this is an opportunity, and are investing resources in developing mobile and tablet apps and sites. Still, it’s not clear whether news organizations can capture these dollars. Google already earns more than half of mobile ad dollars in the U.S. and Facebook is expected to move aggressively into the mobile ad market after its IPO.
“Our analysis suggests that news is becoming a more important and pervasive part of people’s lives,” PEJ Director Tom Rosenstiel said, referring to the findings about mobile and tablet usage in particular. “But it remains unclear who will benefit economically from this growing appetite for news.”
RELATED: Mobile, tablet devices increase news consumption
DIGITAL VIDEO
Another big opportunity for news organizations is digital video, because video advertising earns much higher rates – and digital video viewing and advertising is expected to skyrocket in the next few years. While video advertising spend is only $2.02 billion now, it is projected to grow to $7.11 billion by 2015 — which would make it the most lucrative type of online ad after search and banner ads, according to eMarketer.
Despite that, video news and advertising still represents a small fraction of the content on most news sites, aside from those of major broadcasters. In a February PEJ study, none of the top stories on major news sites were in a video format — even on the sites of broadcast news organizations. Stand-alone video ads were also rare, making up only 1.3% of ads on the news websites studied.
The good news is we are starting to see increasing signs of life in digital news video. A few months ago Reuters launched a YouTube channel, dubbed Reuters TV, featuring 10 news shows. The Wall Street Journal has been one of the most aggressive newspapers in the video space, and is now producing more than four hours of video a day. (Check out WSJ’s fantastic video app for the iPhone and iPad)
One of the more interesting experiments to watch will be The Huffington Post Streaming Network, an online news channel AOL plans to launch later this year that will live-stream news video 12 hours a day. (Disclaimer: I used to be the SVP/GM of News & Information at AOL but left last year).
THE FUTURE
As the digital world becomes more mobile, social and targeted, media companies still have plenty of opportunity. They will have the chance to to attract new audiences and dollars. The question is whether news organizations can move nimbly enough to survive, and thrive.
RELATED: How Facebook, Twitter differ for news consumption
For the latest news from SXSW and general insights on digital media, please follow me on Twitter at @cyberjournalist and visit CyberJournalist.net for the latest digital media headlines.
Newscribe : get free news in real time
Technology companies such as Google, Amazon, Facebook, Apple “now control the future of news.”
That’s one of the take-aways from the 2012 State of the News Media report, released today by the Pew Research Center’s Project for Excellence in Journalism. The news industry, the report says, “finds itself more a follower than leader shaping its business.”
But I think there’s hope. The report touches on a number of opportunities for traditional media in the digital space – areas that are growing rapidly and still up for grabs. Those include targeted advertising, the mobile/tablet space, and digital video.
Winning in these areas will be tough, given the traditional media’s historical inability to rapidly evolve and the head start other companies have on them.
TARGETED ADVERTISING
A good example is the fast-growing opportunity of targeted advertising, where Google and Facebook dominate and news organizations lag far behind.
The Project for Excellence in Journalism (PEJ) report points out that even though targeted advertising is one of the forms of online advertising expected to grow most rapidly, only a few of the top news sites use it. Meanwhile, the report says, tech companies like Facebook and Google “are using personal data collected over the internet to direct ads to specific consumers to a far greater degree than ever before – and to a far greater degree than most news organizations are capable of.”
While Facebook and Google have taken the lead, news organizations could catch up, if they try. Most have the ability, and at least some data, that would enable them to engage in targeting. A PEJ study of digital advertising at 22 top news sites found that few of them do, however. Of the 22 sites, most did not contain any ads targeted to consumers based on their online behavior, according to the January study. Only three – CNN, The New York Times and Yahoo! News – employed high levels of targeting based on a user’s recent online activity. A handful of others employed limited targeting. (For more, see “Who Advertises on News Sites and How Much Those Ads Are Targeted.”)
While targeted display ads account for just 10% of local online ads, or $1.5 billion, right now, by 2016, they are expected to grow to $14.6 billion and make up more than half the market, according to Borrell Associates.
MOBILE
One of the bright spots in the PEJ report is the research on mobile and tablet usage. Readers spend far more time with news apps on the smartphone and tablet, visit more pages at a time, and return more frequently than they do on conventional computers, according to data from Localytics, a client-based mobile analytics firm. And most importantly, there are signs that mobile news consumption is actually increasing total news consumption – one report from comScore indicates mobile devices increase news site traffic by between 7 and 11 percent.
The good news is mobile and tablet usage are expected to continue skyrocketing. And the ad dollars will shift there as well. Mobile ad spending grew 89% in 2011, to $1.45 billion – and is expected to grow to $10.83 billion by 2016.
News organizations know this is an opportunity, and are investing resources in developing mobile and tablet apps and sites. Still, it’s not clear whether news organizations can capture these dollars. Google already earns more than half of mobile ad dollars in the U.S. and Facebook is expected to move aggressively into the mobile ad market after its IPO.
“Our analysis suggests that news is becoming a more important and pervasive part of people’s lives,” PEJ Director Tom Rosenstiel said, referring to the findings about mobile and tablet usage in particular. “But it remains unclear who will benefit economically from this growing appetite for news.”
RELATED: Mobile, tablet devices increase news consumption
DIGITAL VIDEO
Another big opportunity for news organizations is digital video, because video advertising earns much higher rates – and digital video viewing and advertising is expected to skyrocket in the next few years. While video advertising spend is only $2.02 billion now, it is projected to grow to $7.11 billion by 2015 — which would make it the most lucrative type of online ad after search and banner ads, according to eMarketer.
Despite that, video news and advertising still represents a small fraction of the content on most news sites, aside from those of major broadcasters. In a February PEJ study, none of the top stories on major news sites were in a video format — even on the sites of broadcast news organizations. Stand-alone video ads were also rare, making up only 1.3% of ads on the news websites studied.
The good news is we are starting to see increasing signs of life in digital news video. A few months ago Reuters launched a YouTube channel, dubbed Reuters TV, featuring 10 news shows. The Wall Street Journal has been one of the most aggressive newspapers in the video space, and is now producing more than four hours of video a day. (Check out WSJ’s fantastic video app for the iPhone and iPad)
One of the more interesting experiments to watch will be The Huffington Post Streaming Network, an online news channel AOL plans to launch later this year that will live-stream news video 12 hours a day. (Disclaimer: I used to be the SVP/GM of News & Information at AOL but left last year).
THE FUTURE
As the digital world becomes more mobile, social and targeted, media companies still have plenty of opportunity. They will have the chance to to attract new audiences and dollars. The question is whether news organizations can move nimbly enough to survive, and thrive.
RELATED: How Facebook, Twitter differ for news consumption
For the latest news from SXSW and general insights on digital media, please follow me on Twitter at @cyberjournalist and visit CyberJournalist.net for the latest digital media headlines.
Newscribe : get free news in real time
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