The death of print publishing

…is due to advertising moving online, according to Cringely.

Okay, that’s not exactly an original idea. What I found interesting is his assumption that overall advertising revenue will shrink because of digital media and better feedback:

According to Forrester Research, online advertising totals only about five percent of the $400 billion spent on advertising of all types each year in the U.S., yet online consumption takes 30 percent of the media consumption time in most households. This is an interesting statistic that is generally interpreted to mean that the online ad market will eventually grow to $120 billion.

I don’t think so.

If this was the case, it would be a simple matter for print publishers to abandon paper and continue to grow as all-electronic media, but it doesn’t work that way.

Here’s a part of the problem that has been for the most part missed by media and business analysts: A website is not really an electronic magazine. It can contain all the stories of its print equivalent, but IT CAN’T CARRY AS MANY ADS.

For magazines to qualify in the U.S. for shipping by Second Class Mail, they must have a measured advertising-to-editorial space ratio of no greater than 75 percent. Second Class Mail is the difference between life and death for a print magazine, and to qualify for it, they carefully manage that ad-to-edit ratio so that just slightly less than three times as much space is taken for ads as for stories.

Now compare this to the edit-to-ad ratio for most web pages. The densest web page will have one banner ad at the top, eight to 10 Google ads down the right side, and maybe another Google ad or two at the bottom. That sounds like a lot, but on a strict real estate basis, it is very hard to exceed an ad-to-edit ratio of 50 percent, and most web pages have three times as much editorial content as ad space – the exact reciprocal of the experience with paper publications.

While this may not seem like a critical point, it is one, because it means that there is no way a print publisher can switch to all on-line without shrinking in just about every respect. Revenue drops because of fewer ads. You can make some of that up by simply producing more pages of content, but there is a limit to that effect. Ultimately, production and editorial standards falter under smaller budgets and what was once glamorous becomes just another job.

But wait, there’s more!

Back in 1994, I proposed to my employer at the time that we start a strictly online publication to cover just Microsoft. We called the e-magazine MicroSquish and took it so far as to make a dummy issue and do some very interesting market research. The World Wide Web was only a couple years old at the time, and I was unconvinced that it presented a suitable delivery platform in an era of dial-up Internet accounts and 2400 bps modems. So MicroSquish was conceived as a downloadable publication to be distributed in the new PDF format. It looked just like a print magazine, right down to the 75 percent ad-edit ratio. And just to be cool, we built into the technology the ability to report back data from readers. We could not only track who read each issue, but how many times it was read and which parts. We figured this data of who read what and in what order would be very useful to advertisers and ad agencies. But we were wrong.

Ad agencies 12 to 13 years ago didn’t want to know whether or not their ads had actually been read, they told us. This was simply because if an advertiser discovered that few, if any, people were actually reading their modem ad on page 113, they might just pull the ad and save their money. The entire ability to sell an ad-edit ratio of 75 percent was based on this deliberate ignorance. Ad agencies and publications alike knew that many – even most – advertising dollars were simply wasted, but it wasn’t in their interest to admit that, so they didn’t.

Contrast this to pay-per-click, which is brutally honest, where every successful ad has efficacy and advertisers have a pretty darned good idea what they are getting for their money. This reality is precisely why magazines, newspapers, and television are losing revenue to pay-per-click. It is a trend that is likely to continue, and can only result in a degradation of production standards on the print side to match the reduced revenue potential of the online business, where BS gives way to measurable, though impoverished, results.

It is not a pretty picture. More pay-per-click means more online content but ultimately less money for producing that content. Print publications fade from sight or continue primarily as art forms, rather than businesses. It will take another decade to happen, but happen it will.

Another sign of the imminent death of print mags: I’ve been trying to renew my CGM subscription for four weeks now without success.

CGM’s subscription service is even worse than that of other gaming mags. And they’re still not on Zinio, either. :(

I don’t completely agree that the online ads you have to click are the only that work, at least for me as a consumer. If I see say a Coke ad, I may never click on it, but I might go out and buy some. I don’t know why the ad system is so different than TV. You don’t expect the consumer watching the ad on TV to call the station or the company and tell them, hey nice ad and nice product you have there for sale, but they demand it for online.

in 2000 I read an article in Wired that said almost this exact same thing: Online advertising will overshadow traditional ads because of the immediate and measurable feedback. It has yet to happen almost 6 years later, and I don’t think it will, largely for the reason Efthimios G. points out. Marketing isn’t just about providing a service that people need, it’s also (perhaps mostly) creating brand identity, creating awareness that a product exists, and convincing people who don’t currently want a product to want it. You don’t HAVE to have people click through an ad for that unless the product is distributed digitally.

About ten years ago, the print industry, especially newspapers, panicked. It thought the internet would rapidly and totally render its business model obsolete.

So, every newspaper started giving away all their content for free online. Everyone panicked, and the doom and gloom of print’s death was upon us.

The internet had little immediate impact on publishing, however, so newspapers were now in a troublesome situation, giving away their only product for free online and relying on the public’s preference for a real rag in their hands over websites.

Enterprises supergeniuses realized that people were actually OK with PDF files and the like, and started charging for online content. Online readers could be counted in ABC circulation audits! The ratio of happy PDF readers to PDF whiners turns out to be about 25 to 1.

So, here’s the problem for this article: it assumes that the only way newspapers and magazines can make money from their online versions is through “new media” online advertising, and this will force them to shrink their markets, because they will never make as much money from online advertising as from print.

But we’re doing so well with our paid-only, full-price online subscriptions, we don’t even bother to try and sell online ads. The prints ones go directly to the web and make more money without us having to worry about it.

This latest wave of “sky is falling” stories might ultimately be true, inasfar as it will all eventually be online, with print as the afterthought run off for holdouts. But when you hear them talk about advertising, it immediately sounds like the voice of those publishers too cowardly to start charging for content online, and who are trying to route around their customers’ sense of entitlement. Remember: a print ad displayed online counts toward the print circulation total, so long as you charge your customers to see it, so this isn’t an argument that advertising doesn’t matter, or that subscription fees alone are enough.

We make a highly successfull magazine with an ad ratio of 5% at the most.
We make our millions selling subscribtions (and yes, we’re still talking millions plural if we exchange our local funnymoney to U$).
So this wouldn’t be a problem for us.
We also make money online, without selling articles and without giving them away - we offer different content online and make a (very) small profit.

So I’m sure everything will be online eventually, but I’ve yet to see anybody predict how and when. Robs analysis is much more spot on.

I don’t think it will ever be only online. I suppose I MAY be in the minority, but I like to be able to read things away from my PC and without holding a handheld of some sort. It’s easier on my eyes and I tend to remember what I read a bit better. Maybe I am fast becoming an anachronism, but I think there will always be some room for actual print.

Umm, that ad-to-edit crap, is that true of US magazines in general? That they’re 75% ads? Because if it is, holy fuck, why do you people even bother with them?

Depends on the magazine. GQ, for example, is probably close to that ratio, but then they are one big ad for clothes. The gaming magazines don’t have that ratio though, no. It might be 40% or so?

You don’t, unless you’re dumb.

F’r instance, Playboy isn’t like that. And, you know, most of their ads have hot women in them. CGW used to be a bit like that years ago, but they’ve slimmed down to a very manageable read.

But like the aforementioned GQ, as well as Maxim and all the other vacuous entertainment mags.

It’s the old joke: “Who reads GQ?” “Nobody.”

I find that I tend to skim online articles. This is no more true than of game reviews where I read little more than the final score online but read every last review in CGM and GI in its entirety.

Speaking of CGM, I love the console section! I resubscribed because of it.