We knew it was only a matter of time, but it seems that Google's revenue from online advertising has surpassed the amount of money spent on traditional print ads. Since 2004, online advertising has been steadily growing while print publications have been struggling with falling subscriber numbers and increased costs of production. In less than a decade, people have started getting their news and entertainment from a variety of online sources and they have spent more time online than they have spent actually reading a magazine or newspaper.
Part of the reason for the change is the rise of mobile devices. As a former library employee and an avid reader, I was hesitant to think that any sort of electronic device could stem my need for books. I will freely admit that I love books. I like the way they smell, the way the print looks on the page and how they feel in my hands. I didn't think that there was any acceptable replacement for them and even though I spend a good portion of my time online, I still had to unplug and read. When I received the Amazon Kindle as a present a couple of years ago, all of that changed. Suddenly, I had my entire library at my fingertips and an easier reading experience. Although I still use my local library, I'm much more likely to check out ebooks than I am real ones.
It seems that I'm not the only one who prefers online content to actual print media. In fact, Newsweek made headlines recently when they announced that they were abandoning their print magazine, which had been in circulation for over 80 years, in order to switch to an all-digital version. The new digital version will be called Newsweek Global and will be available by subscription via tablets and computers. It was a shocking decision at first, but because they were able to restructure, they stand a good chance of being able to survive as a digital media company. In fact, one of the problems facing print media is plummeting advertising sales. For many advertisers, print media is pricey and isn't able to reach as large of an audience.
As our consumption of digital media grows, the demand for online advertising grows, making it a lucrative business. One of the biggest companies in the online ad game is Google. Their AdSense program evened the playing field for small companies and online marketplaces by making advertising affordable and result based. Instead of spending a lot of money sending out flyers that may or may not be seen by customers, business owners were able to target their ads to people who are actually looking for products like the ones they offer. Using AdSense and paying per click, these businesses are able to pay only for advertising that people actually see, which makes good business sense.
Here's a great graphic from Statista.com that shows how the advertising numbers stack up:
It's important to note that Google is a global company so the direct comparison here is a little unfair. In addition, the numbers used in this chart reflect gross revenue - which is revenue before taking out payments to publishers. According to Google's earning reports, they paid around $4 billion to publishers in the first half of 2012.
What do you think the future holds for print advertising? Please share your thoughts in the comments.
Image Sources: renjith krishnan / freedigitalphotos.net
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