A report that UK internet advertising will overtake the share of national newspapers by the end of this year will have sent shivers down the spines of hacks watching the BBC’s ten o’clock news last night.
The figures reported rather earlier by emarketer.com predict a marginal lead with the internet taking 13.3% of the Â£12.2 billion market against 13.2% for national newspapers.
Group M, part of the WPP advertising giant, believes the margin will widen considerably in 2007.
The large newspaper groups have been seeing traditional markets slipping away. Rightmove, owned by some of the country’s biggest estate agents, has become the first choice of people looking for a new home and left advertising managers wondering what has hit them.
Rupert Murdoch and his News Group admit they have been slow off the internet mark. Time will tell whether paying Â£332.85 million for MySpace was a shrewd move or a panic too late.
Job advertising has traditionally been a big earner for the quality and mid-market papers and that is extremely vulnerable. Yet newspaper bosses were slow to react to the threat and find themselves scrabbling around to buy up existing site. The Daily Mail group which includes London’s only evening paper, the Standard, has spent Â£35 million on jobsite.co.uk.
While newspaper websites are moving into profit, as they attract more advertising,they are far from generating the revenue to replace that lost by the paper versions.
What is clear is that the directors of large newspaper corporations failed to recognise the impact of web. You can hear the exchange between the men in the leather armchairs of their London clubs — “Would you want to go through all the classifieds on a screen, old boy?” — “I can’t see its appeal but my grandson uses it.”
The crucial figures for traditional media business in the next year will be not the comparison between newspaper and internet advertising but the share of internet advertising won by those groups.
Since writing this I have seen Scott Karp’s post “Has the MySpace downturn begun?” on Publishing 2.0