Not death of newspapers but death of advertising

As I mentioned earlier, there is a lot of response on the "who's killing the press?" theme. Because the theme has been so very heavily worked over in recent months, I'm not reposting much of this. But here is a note that reflects a theme in a number of messages: that the newspapers are only the first casualties in what will be a more sweeping elimination of ad revenue in general. It is a response from a reader named Hal:

Among my friends, we've had this discussion before.  Here's what I said then, edited to fit addressing you directly:
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The real problem is, advertising is dying. It's just pulling down newspapers along the way. Next up: TV, radio, and Google.

This is why I was warning anyone who would listen that traditional media's schadenfreude when the internet bubble popped in 2001 was probably misplaced. Because the reason it popped was one finally had the metrics to show Advertising Doesn't Work. Google has forestalled the inevitable by doing the Net equivalent of the "tiny little ads" schtick of a decade or two back, but I think they see the writing on the wall, which is why they keep trying so desperately to find something, anything, other than search that'll make money....

Perhaps the most widely read piece on the possible death of advertising is Bob Garfield's "Chaos Scenario" piece in Advertising Age.... One of the things he points out is how high the number is of people who use TiVo to skip the ads. Think of the Net equivalent -- Adblock Plus (and I've seen sites that won't let ABP users browse, which implies both a) a high ABP use rate, and b) that ABP is substantially cutting their revenues).

Here's a fun question: How long was it before Starbucks ran a TV ad? (answer here)

Direct mail response rate: Typically, 1%. Which is to say, within the margin of error.

Spam: "50 in every million people". And a massive whack at brand equity....

No, as far as I can figure out, American businesses still use advertising because "that's what our fathers did." Sooner or later, that won't be enough.

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(Hal in the present here:) ...  I still say the fundamental problem is, the link between advertising and increased sales has been shown to be very weak, and the advertisers are bailing out.  There's just no way they can justify the expense to their stockholders any more.

So did Craigslist kill classified advertising for newspapers?  Perhaps, but it was already dying, at least for some markets.  Did you ever see Los Angeles' The Recycler?  Basically, it was free to place ads, and then they charged readers $1.00 or so to buy the thing for a weekly edition.  During my last decade in LA, I don't think I ever used the classifieds of either the LA Times or the OC Register, except for job listings.  In that market, the move to Craigslist was one of means, not of category.

Now, I'll hedge a bit.  To me, there are two kinds of advertising:

* Ads that let you know a product you didn't previously know about exists.
* Ads about things you already know about, and either never buy, or buy regardless.

The first kind still has a future, albeit very informally.  I think it's the heart of the, "One person's piracy is another person's free advertising" argument. (See the music business, where tickets still sell like mad even if CDs are in the tank, or Cory Doctorow's thing about the main fight an author has is against obscurity.)

But the second kind -- the traditional Coke v. Pepsi, Bud Light v. Miller Lite, Tide v. Bold, Obama v. McCain -- that stuff is deader than a doornail.  Customers will actively delete those ads. And, yes, I absolutely think this has political implications.  Then again, I'm a guy who thinks The Cluetrain Manifesto has as much to say about politics as about marketing in the traditional sense.

In a related-though-different vein, from another reader:

The problem with newspapers is that they were a bundle of hard news, classifieds, sports, weather, financial information, comics, lifestyle, etc. People were willing to pay the cover price for the whole package, but were mostly interested in the non-news items.

All of those non-news categories have fled to the net, where they are done significantly better. Craigslist really is better in every way than the newspaper classifieds. Other categories are also covered in much greater depth out on the net.

The newspapers themselves thought of their reporters as the core, and the other sections as just fluff to fill out the paper. With the "fluff" gone, they are discovering there's not enough taste for hard news alone to pay the bills.

This is why micropayments or paywalls for online papers are not going to save the business. Hard news just doesn't pay for itself, not in advertising revenues or in subscriptions.