When will print’s advertising revenue slide end?

When will print’s advertising revenue slide end?

Mary Meeker’s Internet Trends Report

I look forward to Mary Meeker’s internet trends report each spring. It’s one of my favorite days of the year. And, unlike the now-annual release of a new Star Wars film, it never disappoints.

Regardless of professional or personal interests, there is information in the report that touches all of us. You just have to be willing to consume 294 slides of information.

You can view the full report, presented at Recode’s 2018 Code Conference, below, or check it out on recode.net here.

Slide 96: % of Time Spent in Media v % of Advertising Spending

The slide that I find most interesting, as it relates directly to my profession, is slide 96. Slide 96 shows the percentage of time spent in media and compares it to the percentage of advertising revenue spent in the same media.

2018’s slide 96

I’ve worked in local media since 2001 and I’ve been fixated on each year’s version of this slide since at least 2012. Nieman Lab has a great post that captures this slide from 2011 through this year, which got me thinking about print’s constant ad revenue woes – which have accelerated over the past two years.

Is there an end in sight and can Mary Meeker’s report show when?

Crunching the Numbers

I pulled numbers from a few sources to build my analysis, including from the aforementioned Digital Trends Report and Nieman Lab article, as well as a post from Venture Beat that shows US ad spending growth as projected by e-marketer. I also made several assumptions that I’m sure a lot of people will disagree with. For example, I’m assuming that the time spent in print will remain constant at 4%.

Since 2011 ad spending in print media has dropped from 25% to 9%. On average the market lost 3 points per year. The two worst years were 2013 and 2016 when they lost 4 points.

On a percentage basis, this equates to a 15% annual loss in print revenue. The most significant losses in terms of percentage are the past two years, where advertising revenue in print has dropped 25% in each year.

Between 2015 and 2017 the market share has dropped from $29.3B to $18.1B. A loss of $11.2B, or -38%.

In 2011, when the market share was 25%, time share for print was 7%. Between 2011 and 2014 this fell to 4%, where it has since remained. As the Nieman Lab article points out, this 4% could be as high as 4.4%, or as low as 3.5%. Regardless, we can say that the percentage of time spent has, at the very least, slowed.

As slide 96 illustrates, in media percentage of time spent and percentage of revenue generally correlate. Does that mean that the share of print revenue will drop to 4% of market share?

There is no real way to tell, but for purposes of  this article, I’m assuming so.

What Does a 4% Revenue Share Look Like?

If we assume that advertising revenue in print finds its low-water mark at 4%, how far away are we from seeing this, and what do the next few years look like?

If we assume that 2018 is average from a point loss basis, print should lose another three points, bringing the market share down to 6%. This is a 33% loss in revenue, which would dramatically accelerate the losses in 2016 and 2017.

In 2019 another two point loss would bring the market share down to 4%, matching the share of time spent. This would also represent a second straight year of 33% revenue loss.

This would put revenue in the print ad market around $8.9B, down $20.4B, an astonishing revenue loss of 70% since 2015.

Note: Using the percentage losses from the past two years, 25%, extends the time frame an additional year. Using the historical annual losses of 15% expends the time frame by three years.

On the Bright Side?

The bright side, regardless as to whether you look at revenue losses on a point, recent trend, or historical trend basis, is that once print advertising finds its low-water mark, it could show advertising revenue gains. However modest they might be.

Assuming the total advertising market continues to grow at 5% annually, print advertising should, at the very least, be able to maintain year-over-year revenue. Whether that’s in 2020, 2021 or 2022, it will be a welcome sight for an industry that has been beaten down for the past few decades.

Although, the media industry has yet to successfully monetize mobile to any real degree, relying on desktop for any signs of growth in recent years.

Hmm …

We may want to pay attention to the fourth column on that slide.


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