Statistical, Ecosystems and Competitiveness Analysis of the Media and Content Industries: The Newspaper Publishing Industry

Table 12: Global revenues from print and digital advertising, 2006-2010
2006 
2007 
2008 
2009 
2010 
Print advertising newspapers 
111962 
109732 
100341 
81525 
80885 
% Change 
-2,0 
-8,6 
-18,8 
-0,8 
Digital advertising newspapers 
4127 5369 5842 5634 6404 
% Change 
30,1 
8,8 
-3,6 
13,7 
% of total revenues 
2% 
3% 
3% 
4% 
4% 
Circulation newspapers 
69503 71756 73137 72534 72457 
% Change 
3,2 
1,9 
-0,8 
-0,1 
Total 
newspapers 
185592 186857 179320 159693 159746 
Source: PwC and Wilkofsky Gruen Associates, 2011. 
 
Nevertheless, the potential for digital online growth is widely recognized due to rising website 
traffic, and therefore, new online business models are incorporated by the traditional news 
industry as well as by new market entrants. There is little evidence for proven concepts of 
online business models for news. However, news providers continue to experiment with new 

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The Newspaper Publishing Industry 
63
 
and sometimes innovative business models, ranging from a focus on hyperlocal content to 
publicly supported not-for-profit journalism (News Innovation, 2009). 
3.3.1 Online 
advertising 
With the internet newspapers not only lost readers, but also advertisers. Especially classified 
advertisements, employment and real estate advertisements moved online, where transactions 
between sellers and buyers can more easily and directly be accommodated, for instance 
through the popular Graig’s list and eBay, or through local versions of market places, dating, 
employment and real estate sites. Online advertisers can also gain direct access to their clients 
instead of via advertising in a newspaper, which lowers the advertising income for classifieds 
in newspapers (Van der Wurff, 2005b) (Kung, Picard, & Towse, The Internet and the Mass 
Media, 2008). 
Online, news providers are looking for alternative revenue streams to compensate for lagging 
advertising revenue and declining subscriptions to their print newspapers. Downie Jr. & 
Schudson (2009) state that it is unlikely that all news organizations can be supported by 
online advertising revenues. Revenues from online advertising are growing, but not fast 
enough to fill the gap opened up by the decline in revenues from print advertising and 
circulation.
Because information online is often free and easily accessible, legacy news organizations are 
losing their power over audiences and advertisers. The audience for news has fragmented and 
this has a negative effect on advertising income. Some news paper publishers have tried to 
compensate for the loss of print advertising by launching or taking over successful websites 
(dating sites, online market places etc.). The case study on Sanoma provides examples of this 
strategy (see Appendix B). Sanoma’s acquisitions of popular online market places have partly 
compensated for losses in advertising revenues in their traditional newspapers and the 
company has thus managed to keep growing. But its news division has shrunk. So while the 
company as a whole benefitted from these acquisitions, profits did not necessarily feed back 
into the news publishing division. 2008 also marks a turning point in overall net sales, 
operating margins and employment figures for the company. 
Online news providers can expand their geographical reach with little extra costs, but online 
they are also confronted with much more competition. Grueskin and others (2011) explain 
how legacy news providers are loosing their grip on the platform and their role as aggregators 
of news to Google, Facebook and Twitter. This means that they are also becoming less 
interesting for advertisers. At the same time the prices for online advertisements (often 
expressed in CPM = costs per thousand page impressions) are much lower than those for print 
advertising. One reason for the relatively low prices is the vast volume of advertising space 
available on the internet. Online advertising typically brings in less than 20% of a 
newspaper’s advertising revenue, and rates on all but the most prominent pages are falling 
(Koen, 2011). There are billions of pages on the internet, so the value of an individual page is 
lower than that of a printed page. Another reason is that online audiences are more 
fragmented, spend only short time on news sites, easily click through to other sites and 
generally have a short attention span.
Also reliable metrics are still lacking, which makes it more difficult to convince advertisers to 
spend their money online. In a study about online metrics and ad spending, Graves & Kelly 
(2010) found that the uncertainty about audience measurement provides a threshold for online 
ad spending, with media buyers and sellers adhering to incompatible metrics. Although the 
internet, in theory, provides news publishers with almost unlimited access to data on news 
consumption, there is not yet an established, specific measure to analyse website visits, while 
audience measurement is crucial to understanding audiences, evaluating competitors and 

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