I just got back from the SABEW conference of business writers, where BNET and Sales Machine won journalism awards. While there, I attended a session discussing the bleak future of newspapers, which are are folding up all over. Most attendees thought it was the economy but I’m not buying it. IMHO, the real reason is that advertisers have finally figured out that newspapers, in collusion with clueless marketers and unscrupulous ad execs, have been fleecing them for decades.
For me, the telling moment of the conference came when I asked a room full of newspaper writers a simple question: “Have you EVER read a newspaper advertisement?” Less than 5 percent admitted to having done so. Ever. In their whole lives.
Think about that for a minute. If newspaper writers aren’t reading newspaper ads, why would newspaper readers be reading them? And if nobody is reading newspaper ads, what’s the value of that ad? Not much, obviously.
The problem with newspaper advertising is that, in most cases, you have NO idea whether anyone is reading an ad, or whether that ad is driving buying behavior. And because nothing is being measured, newspapers and ad agencies have been able to artificially inflate the price of their space ads. Massively.
One way newspapers do this is to simply lie about circulation. For example, it’s not uncommon for a newspaper to claim that each distributed copy is read by 3 or 4 people. But that’s total BS. Many copies of most print publications don’t get cracked even once. And the ones that do, I’ll bet that only a fraction of the content ever actually wins the reader’s eye.
As for the ads themselves, only a tiny fraction of the circulation reads them, and the number of people who take action as result is probably in the single digits. (I’m talking the actual number here, not the percentage.)
Newspapers also cook the books is by setting the value of advertising based upon what other newspapers are asking. As if that made any difference. But it worked, in the past at least, because marketers (many of whom don’t want to be measured anyway) never asked the obvious question: how much revenue will this ad generate?
That obvious question also goes unasked because ad agencies have come up with all sorts of bogus ways to “measure” the impact of advertising. Unfortunately, many marketers lack the ability to differentiate between valid statistical research and pseudo-scientific guesstimation.
Online advertising is completely because it is measurable from the get-go. Once a click-through lands a prospect on the advertiser’s site, you can measure the financial value of that traffic and figure out what the ad placement was worth to you financially. You can even set up business relationships where the ad generates revenue if (and only if) the customer actually buys something.
At the conference, newspaper folk were complaining that online ads don’t generate as much income as print ads. Well, duh!
Online advertising reflects the reality that the supply of ad space (in all media) far outstrips the ability of that ad space to generate buying behavior. By contrast, print advertising is still living in the la-la land of brand marketing where advertising is a good idea “because Coke does it.”
What irks me about this is that the money that’s being WASTED on overpriced print advertising ends up in the SGA line of your company’s financial report. It’s counted as a “cost of sales” — even when it does absolutely NOTHING to help you sell ANYTHING.
That’s bordering on fraud, in my view. IMHO, the people who continue to support unmeasured and unmeasurable marketing are in a conspiracy to keep that fraud up and running. Meanwhile, more companies are getting savvy to the scam and choosing to put their marketing money where it can actually generate sales.
Unfortunately, the newspaper industry was built out under the false assumption that space ads had a much higher value than they actually should have. And this means that the entire financial superstructure of the modern newspaper is no longer viable. Which means that a LOT of newspaper writers are going to be out of work.
Sad, but true.
READERS: You still advertising in newspapers? Getting some value for it? Just curious.
