I sometimes wonder if attendees at media trade shows all are asking each other the same question: “Hey, who moved my cheese?”
That question was famously posed in a motivational book published 20 years ago by physician/writer Spencer Johnson. His book, “Who Moved My Cheese?” was on the bestseller list for over five years.
The question is clearly a good one to ask about the newspaper industry.
For a century or more, newspapers had it easy, bringing in a huge share of all advertising dollars —
Then along came competition: magazines, radio, broadcast television, cable television and billboards —
all of whom nibbled the cheese. While they had to share, newspapers remained prosperous, with profit margins often in the 30 and 40 percent range. It was the era when newspapers “printed money” — or for my purposes “cheese.”
There was enough “cheese” to provide jobs for thousands of journalists and related functions. The fundamental financing for core journalism at local, regional and national levels was provided by newspaper advertising, the plentiful cheese.
The critically important role of the Associated Press and many vendors shared the cheese.
But then the World Wide Web of the Internet came along and “moved the cheese.”
Total U.S. advertising spending in 2017 was over $205 billion, according to eMarketer. Digital advertising was over 42 percent of the total in 2017, and will likely be near 50 percent in the near future, maybe this year.
Today, the duopoly of Facebook and Google seem to have an ever-increasing monopoly on “the cheese.”
More than 42 percent of all U.S. digital ad spending goes to Google.That’s a whopping $35 billion —
more than twice of all newspaper advertising. Google is only 20 years old!
More than 31 percent of U.S. mobile ad spending will be paid to Google, tallying $18.9 billion.
Almost 21 percent of all U.S. digital ad dollars will go to Facebook, or $17.4 billion.
In 2017, newspaper advertising revenue totaled $16.5 billion, down from nearly $50 billion in 2005.
Pew Research says digital advertising accounted for 31 percent of newspaper advertising revenue in 2017, based on this same analysis of publicly traded newspaper companies. The portion stood at 29 percent in 2016 and 17 percent in 2011.
Pew also recently reported an 11 percent decline in daily newspaper circulation, and a 10 percent decline in Sunday circulation.
So, it’s safe to say “the cheese is moving.”