Digital media barons just can’t get enough
Unsatiated by exponential revenue growth from the worldwide web, the internet’s money-makers are targeting the print media and cellphones to further fuel profits.
That was the message from a Google representative and experts on Yahoo and the digital media in general at the 60th World Newspaper Congress, which started in Cape Town at the weekend.
About 1 500 newspaper editors and media representatives gathered at the four-day conference to grapple with trends that could have an impact on the bottom lines of mostly print-based media organisations around the world.
While some industry watchers believe the days of newspapers are numbered thanks largely to the internet, print representatives are strategizing on how to embrace, in some instances, and fob off, in others, digital technology.
Google’s head of media and publishing for Europe, the Middle East and Africa, Rob Jonas, revealed that his company is eyeing potentially juicy opportunities in the print media.
The company, which has helped internet publishers around the world generate healthy ad revenues through its AdSense product, has ventured into putting advertisers in newspapers.
Just like you might see Google next to a web ad, Google’s name is on print ads in some newspapers.
In a fledgling project, Google has some "lightweight commercial agreements in place" based on a similar model to that on the internet.
Jonas said he was not prepared to share the details of the agreements with congress delegates because it is a "work in progress".
Google paid out about US$3,3bn to its AdSense partners around the world in 2006, he said.
Yahoo, meanwhile, is involved in a potentially lucrative new venture with more than 280 newspapers in the United States.
Yahoo’s emphasis is on being print companies’ digital partner, was the message from Mike Smith, executive director of the Media Management Center, Northwestern University in the US.
Smith said internet advertising still takes less spend than newspapers in the United States, but projections are that online advertising will be second only to direct marketing in terms of money spent on it by 2010.
Newspaper advertising, although much less, is still expected to grow, he said.
Newspapers provide content and an audience and also help market Yahoo products, like Yahoo "hotjobs".
In addition, Yahoo provides a "savvy national sales team", with local newspaper sales representatives complementing its efforts, as well as visitors to newspaper websites.
Its advertisements are appropriate for the location and interest of visitors.
Also very important for future media revenue, congress delegates heard, is the cellphone. It is set to become increasingly indispensable for communicating, information, entertainment, business and banking transactions, among other things.
As consumers turn increasingly to their cellphones as a primary source of content, they can expect Google to come up on the screen, offering for example telephone numbers and website addresses.
Erik Nord, deputy CEO of Telenor Broadcast, Norway, commented that Coca-Cola expects to devote at least 50% of its marketing budget to the cellphone within a decade.
This is in light of expectations that "more dramatic changes are to come to the mobile phone". Together with credit card and car keys, it will become a vital "personal item", commented Nord.
Martha Stone of the World Association of Newspapers said research indicates that "young people are not wanting paper in their hands as much as they want a digital device".
However, it is not just young people who have embraced cellphone technology; it is becoming increasingly popular across generations.
Holding back content providers will be technical user issues like download time. These will have to be ironed out by the companies developing the mobile technology, said Stone.
Other trends highlighted by Stone include that the media can expect to see a "huge ramp-up of search advertising".
Commoditised information, like breaking news, cannot be charged for, however, media companies should generate some money from paid-for content.
Some newspaper companies are starting to develop games for paying content, cited Stone as an example.
Blogging is also expected to draw more traffic and advertising as are sub – or niche – websites, where the latter can expect advertising to yield much more than advertising on more general sites.
Total media consumption is rising internationally, World Association of Newspapers research has found, but is "more fragmented than ever".
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