Online advertising

Dismal report on news industry offers insights on digital ads

March 19, 2013: 7:19 AM ET

Lots of grim statistics in a new report for magazines and newspapers from the Pew Project for Excellence in Journalism - with a few rays of hope.

<> on February 13, 2013 in New York City.FORTUNE -- The Pew Project for Excellence in Journalism's report, "The State of the News Media 2013" contains plenty of grim news about an industry that appears in some respects to be falling apart at the seams (along with a few rays of hope). But it also offers a few notable tidbits about the state of the online-advertising business:

  • Digital advertising continues to eat into the total share of advertising in the U.S. In 2012, digital ads represented 23% of all ad dollars spent, up from 20% in 2011. Digital ads generated $37.3 billion, a rise of 17% from 2011.
  • Mobile advertising, though it continues to be a challenge due to low prices, grew by 80% in 2012, to $2.6 billion.
  • The market for mobile display ads is growing fast and is expected to surpass search ads in terms of revenue by 2016. Six companies dominate the mobile-display market: Pandora (P), Google (GOOG), Millenial Media, Apple (AAPL), Facebook (FB), and Twitter.
  • Facebook ran its first mobile-only display ad only in August of 2012, but those ads generated nearly a quarter of its revenues in the fourth quarter of 2012.

MORE: Silicon Valley looks for love, at $50,000 a pop

While there are some signs of hope for the news media, the incursion of digital giants into the ad business -- particularly in local ads -- continues to diminish hopes that local and regional news organizations will see new growth in advertising revenue, which remains anemic at best. "Once again, in key revenue areas, it appears the news industry may have been outflanked by technology giants," the report states.

About 450 newspaper sites have erected paywalls, which have seen some success, but which are still far from proving to be a panacea for the industry. According to the report, the "rise of digital paid content could also have a positive impact on the quality of journalism as news organizations strive to produce unique and high-quality content that the public believes is worth paying for."

Coincidentally providing a case in point, Time magazine -- which like Fortune is owned by Time-Warner (TWX) -- says its March 4 issue featuring a 25,000-word report explaining why health care costs so much appears on track to being the magazine's top-selling issue in nearly two years, selling more than double the magazine's usual. Crucially (and perhaps somewhat surprisingly), the article apparently appealed as much to younger people as to older ones: It was shared 100 times more on social media than Time's average for 2013.

The question now is whether it is sinking in with print-news executives that people are hungry for serious, deeply reported coverage of public affairs, and that journalism aimed at mass audiences, such as celebrity coverage and other fluff, is best left to TV and to publications that specialize in such material.

  • Much like Google, Microsoft also scans your email

    Microsoft's ads make Google's email scanning sound sinister, but its own scanning - to block spam - isn't much different.

    FORTUNE -- Microsoft's anti-Google "Scroogled" campaign is based largely on the contention that rival Google "goes through" private email in order to target ads at users based on keywords. And that's technically true. It's also technically true that Microsoft, too, "goes through" private email, though its intent is different: Microsoft's Outlook.com MORE

    - Mar 5, 2013 4:03 PM ET
  • Why Do Not Track faces an uphill road

    'Do Not Track' sounds a lot like 'Do Not Call.' But unlike telemarketing, online ad-tracking takes place unobtrusively, behind the scenes.

    FORTUNE -- Legislation to give Internet users the right to prevent advertisers from tracking their online activities was re-introduced in the Senate on Thursday. It has little chance of passing.

    The proposed Do Not Track Online Act sounds a lot like the very popular federal Do Not Call legislation that was MORE

    - Mar 4, 2013 6:45 AM ET
  • Meet the man behind Facebook's ad revenue

    David Fischer, Facebook's vice president of business and marketing partnerships, has helped Facebook built its profit engine.

    FORTUNE -- At the beginning of 2012, Facebook's mobile ad revenues were literally non-existent. By the end of the year, they generated 23% of Facebook's total advertising revenue. With more users logging onto Facebook from mobile devices than ever before, a new search feature that competes with Google, and increased scrutiny from Wall Street, MORE

    - Feb 22, 2013 1:55 PM ET
  • Online privacy: What's at stake

    There are probably a set of policies that allow ad targeting to succeed while also letting users control what is associated with their real identities...the stakes are high.

    By Chris Dixon, contributor

    It is widely believed that a flourishing democracy requires an independent, diverse, and financially solvent press.  With print newspapers set to disappear in the next few years, the future of quality journalism is highly uncertain. This year, the online version of MORE

    - Oct 22, 2010 1:09 PM ET
  • Microsoft sweetens its pay-to-search deal

    By Yi-Wyn Yen

    It's been four months since Microsoft introduced its cashback rebate scheme that pays people to use its Internet search service. But Microsoft continues to fall behind Google in search.

    On Wednesday, Microsoft (MSFT) plans to unveil a new rewards program to get more consumers searching on the company's Live Search engine. While a company spokesperson would not discuss details of the latest rewards gimmick, a Microsoft executive says the MORE

    - Sep 24, 2008 12:00 AM ET
  • AOL and Yahoo plan to strike a deal, Microsoft retaliates

    By Yi-Wyn Yen

    Yahoo and Time Warner's AOL are negotiating a deal to combine their Internet operations, a source told Fortune.

    The news was initially reported in the Wall Street Journal, which stated that Time Warner (TWX) would fold AOL into Yahoo and make a large cash investment for a 20% stake of the combined company. In return, Yahoo would repurchase several billions of its shares in the mid-$30 range. Time Warner MORE

    - Apr 9, 2008 10:35 PM ET
  • Google wins approval for DoubleClick deal but faces EC challenge

    By Yi-Wyn Yen

    The Federal Trade Commission cleared Google's purchase of DoubleClick Thursday morning, bringing the search giant one step closer to closing the $3.1 billion deal.

    After reviewing complaints from Microsoft (MSFT) and AT&T (T) that Google's acquisition of  DoubleClick, which serves graphical ads, would create a monopolistic ad company, commissioners voted 4-1 in favor of Google. The antitrust regulators argued that despite Google's (GOOG) powerful hold in paid search and MORE

    - Dec 20, 2007 11:25 AM ET
  • AdBrite launches Facebook network

    By Lindsay Blakely

    With Facebook widely expected to unveil a big advertising initiative next week, ad network AdBrite today is launching its own way for advertisers to target consumers on the social networking site.

    The question, of course, is if Facebook gets into the ad game, will there be room for anyone else?

    "Facebook may have a brilliant new way to do ad targeting based on profiles," but that doesn't mean it will MORE

    - Oct 30, 2007 9:41 AM ET
  • Rethinking Online Ads 2.0

    image link

    Henry Blodget, who's been truly brilliant at Silicon Alley Insider, posts intelligently about Nielsen's report Wednesday that online advertising fell from August to September.

    We continue to believe that we may be in the
    first stages of a cyclical downturn for advertising and the Internet
    sector--one that could affect not only start-ups and second-tier players
    but majors like Google (GOOG), Yahoo (YHOO), AOL, et al. Such
    downturns do not begin suddenly, and MORE

    - Oct 12, 2007 2:38 PM ET
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