Ad revenues and what it tells us about paywalls
There’s a well known fact about ad revenues for print vs internet: internet ad revenues are usually lower than print. This fact is one of the reasons given for why some websites are implementing paywalls. They’re trying to bring in more money to boost their website revenue to the same range as their print revenue.
I’ve had this idea for the longest time that print and magazines got more ad money not because of the influence they had but because they had convinced advertisers that they were worth more. I thought this was an artificial construct, and it was propped up because until the web came around, there was no real competition (besides TV).
It looks like I might be right.
The market research company eMarketer has been analyzing ad numbers lately and they found some interesting results. They compared the ad revenues of web, mobile, TV, and print vs the number of eyeballs each segment commanded.
Newspapers and magazines are getting about 3 times the ad revenue they should given the amount of time people use them. Radio and the web are both shortchanged, and the mobile segment is getting squat (opportunity there).
So media organizations see that their websites aren’t generating the kind of revenue of their print editions and some have decided to implement paywalls as a response.
Look at that graph. Doesn’t it suggest that their expectations are unreasonably high? I would think that the print media is actually used to operating in an artificial bubble. They have more revenues than they deserve based on the number of eyeballs.
If I’m right, then the real situation is that the print ad revenue bubble is going to burst. In fact, this might explain why so many papers have gone belly up in the past 5 years. They might have been used to an artificial situation which is going away.
What do you think? (If I misunderstand the situation, please feel free to tell me why I’m wrong.)