Companies everywhere are deepening their commitment to digital advertising in order to micro target their ideal, actionable consumer. Internet advertising revenues in the United States totaled $11.7 billion in the second quarter of 2014 alone, a steady increase of 2.3% from Q1 2014 and a 13.8% increase from Q2 2013. Year to date revenue through June 2014 totaled $23.1 billion, up 15.1% from 2013. Mobile is also continuing to rise, to capitalize on the digital-centric consumer.
However, despite these trends in digital, mobile, and social, print advertising remains a consistent winner in the overall media mix. Print revenues are expected to run flat or decline over the next few years, but this increase in digital advertising will actually help keep print advertising competitive. Print advertising continues to attract the bulk of ad revenue for newspapers and magazines, even though sales are declining.
One such reason for print holding the line is that print publications have more predictable and loyal readership. They are able to stay in circulation for a longer period of time and target local customers. While CPMs for digital ads make them more affordable than traditional print media, they also have more competition as they rotate with each page view and without proper targeting, may be reaching the wrong consumer. The opt-in nature of print readership decreases the risk of presenting your ads to the wrong audience. Print readers affection for the physical product has not waned, meaning we should expect more innovative solutions to attracting print consumers in the future, to compete with digital growth.
Print alone cannot grow in its current model. One way newspapers in particular are harnessing the growth of digital is through digital subscription models, or charging for content. Digital circulation revenue is forecasted to reach $493MM this year, a 27% increase from 2013. Although print advertising losses continue to exceed digital ad gains, paid subscription models are lessening the blow.
Publishers that are capitalizing on this “bundling” model are able to offset any print losses by adding targeted digital content to their mix. Paid digital circulation indicates audience strength and brand loyalty with these historic print publications. The types of models in the marketplace currently are paid online subscriptions, single copy sales on e-readers, and e-replica editions (full reproductions of the print product).
Wins in print also vary by industry. There has been steady growth among high-end lifestyle magazines like Conde Nast’s Vogue and Glamour, and Hearst’s Cosmopolitan and Esquire, but ad revenue for news pubs was down 18% with The Economist and The Week reporting 20%+ losses.
As digital continues to grow, print’s adoption of digital subscription models and engaging their core audience base are ways to sustain and actually grow their readership. Print advertising remains effective by engaging a captive, older audience with higher incomes. The majority of digital users fall in the 18-49 age brackets. Both are highly valuable consumer segments that respond to advertising differently, thereby forcing publishers to reexamine the most effective ways to communicate to their audience. Print and digital advertising success is not mutually exclusive. The opposite is actually true: they need take cues from each other in order to grow their market share.