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20 April 2007 Blog Home : April 2007 : Permalink

An Advertising 'Recession'

Via Jeff Jarvis, who calls it "Bad News", I see that the New York Times reports on the dire fortunes of America's dead tree news industry. It's definitely bad news for purveyors of dead ideologies trees and those paid to fill them but I'm not so convinced it is necessarily bad for the rest of the world. However what I thought was amusing was the NYT's explanation of why the newpaper companies are in trouble:

Buffeted by an ongoing advertising recession, The New York Times Company and the Gannett Company announced yesterday that their first-quarter profits declined while the Tribune Company reported a loss.

The disappointing results underscored the increasingly tough economic times faced by the industry as advertisers continued to shift their focus away from print to the Internet. In particular, areas like real estate and classified, previously rich revenue generators for newspapers, continued to be weak.

The first paragraph makes it seem like it is a widespread problem. You know advertisers just aren't spending the money. But then the second paragraph explains that the problem is not exactly a recession so much as a change in where advertisers wish to spend their money. We can tell this because Google announced excellent results and Yahoo, while not so good, did report:

Revenue rose seven per cent to $1.67bn with a strong demand for display ads and sales of text-only contextual ads late in the quarter.

So er no this is not a recession, although I suppose it probably is a 'recession' in much the same way that an insurgent is not the same as an 'insurgent'. Anyway the NYT aricle then explains that:

While newspaper companies have been eager to highlight how fast their Internet advertising is growing, the Times Company decided to reduce its 2007 guidance for Internet revenue growth, suggesting that the transition from a print advertising model may be a long time coming.

Up to a point, Lord Copper. The transition from a print advertising model to an Internet one is clearly one that advertisers have embraced, unfortunately the dead tree purveyors haven't so yes the transition to Internet advertising for the NY Times may well be a long time coming. Unfortunately the transition from a print advertising model seems to be coming rather rapidly implying that the Times and co are going to transitioning to a "no advertising" model and hence to a no business model.

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