4 strategies for news companies as mobile ads displace desktop exposure

4 strategies for news companies as mobile ads displace desktop exposure
by Rick EdmondsPublishedJuly 24, 20127:20 am
There is fresh evidence that the migration of news readers to smart phones continues at a breakneck pace. Surely an ad bonanza for news providers will follow?
Unfortunately, maybe not.

Even without high-profile killer competitors like Monster, Craigslist and Google, news organizations are facing a potential disconnect with the growing base of smart phone advertising. Shoppers in stores, coupon clippers and online bargain hunters may find what they are looking for in visits altogether separate from checking the news.
David Payne, chief digital officer at Gannett, said in a recent interview with MediaPost, that USA Today now has “more people using our mobile products on a daily basis than looking at the newspaper.” So far so good, but transferring that to revenue growth will be trickier, Payne said, especially since tablets and smart phones are so different from each other, with phones shaping up as “a facilitator of m-commerce.”
The International Newsmedia Marketing Association (INMA) published a white paper in June highlighting the mobile publishing strategies of 15 news organizations, eight American and seven abroad. The lead finding was a consensus that by 2015 more news will be consumed on mobile devices than on desktops or in print.
But while the organizations have detailed and varied plans for capturing mobile audience, the path to advertising success is far sketchier. The report concludes only that “multimedia solution packages for advertisers will be crucial” and sales staffs should be pushing mobile hard.
As I monitor publicly-traded news company financial reports, statistics on mobile traffic increases are now a staple. However, I have yet to hear mobile advertising revenue quantified, or even a growth rate mentioned. Randy Bennett and Dena Levitz, who monitor digital matters for the Newspaper Association of America, agreed in an e-mail exchange: There is not enough mobile advertising yet for it to be significant financially.
Gordon Borrell, a leading analyst and forecaster of digital ad spending, had a particularly downbeat view. On the one hand, Borrell sees local mobile ad spending rising 65 percent this year from $2.6 billion in 2011 to $4.3 billion. And he expects that sharp rate of growth to continue through 2016, when “88 percent of all local advertising will be served up on a mobile device,” as advertising on desktops declines precipitously. (See charts below.)
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