By Ronan Lynch.
One of the best in-jokes among editors this year is that “desktop is the new print”. Four years ago, news websites had zero visitors arriving via mobile devices. This year, the Financial Times noted that almost two out of three visitors to its website came via mobile devices, and news websites expect mobile users to account for four in five online readers in two years time.
What’s driving all of this change? Step forward, the Circle. Sorry, Google.
Although not a news platform, Google is driving a staggering rate of change in the news business as the company captures more and more of the advertising revenue from print and online news media.
This change is being driven by the widespread adoption of smartphones and the increasing amounts of time we spend on our mobile phones and tablets.
A survey by US website emarketer shows that in 2013, adults spent an average of two hours and twelve minutes on mobile devices (such as smartphones and tablets) and the same time on desktops or laptops. By the end of 2014, Emarketer estimates that adults will spend just under three hours each day on their mobile devices, with laptop and desktop usage dropping to close to two hours.
Accordingly, mobile ad spending is set to increase 83% from 2013 to 2014, passing out radio, newspaper and magazine spending, and settling into third place behind television and desktop spending. Currently, advertisers spend twice as much on desktop advertising as on mobile, but that’s also set to change, with mobile revenue set to outpace desktop by 2016.
So, who ends up pocketing all of this advertising revenue? The five most-visited Irish websites are google.ie, google.com, facebook.com, Google-owned youtube.com, and wikipedia. In the US, Google takes around 11% of online ad revenue, followed by Facebook at 4%, and much of Google’s advertising revenue distribution goes to Facebook. This year, Google will take more than one-third of its revenue from mobile advertising, and that could increase to 66% within two years.
It’s not just that we’re spending more time on mobile devices. To their delight, advertisers are discovering that mobile devices, in the words of tech website pando.com, are turning us into “advertising hungry, nonstop retail monsters”.
A report by advertising agency Criteo found that users are far more likely to click on mobile ads than on desktop ads. On iPhones and iPads, we’re 55% more likely to click on an ad, while Android (by Google) users are 90% more likely to click through, and 85% of the world’s smartphones running on Google’s Android operating system.
There’s a mind-boggling cycle of information at work here. Our mobile devices are feeding great amounts of data back to Google about our habits and movements, enabling the company to deliver targeted and location-based advertising; with Apple devices, it’s possible to minimise the data fed back about location, but Android doesn’t offer such opt-outs. Yes, it seems that nothing makes us happier than shopping online with our mobiles.
We’ve wised up to banner ads, whose click-through rates were once more than 50%, but which have plummeted now to less than .1%, forcing advertisers to look for other ways to attract our attention. Enter ‘native advertising’, the online equivalent of newspaper pages discreetly marked out as ‘commercial features’.
The New York Times executive Meredith Levien notes that its readers now spend as much time on branded content as on news stories. Time CEO Joe Ripp is elevating ‘native advertising’ to a new level, announcing in July that his editors would now report to the advertising executives.
There has traditionally been a wall between editorial and advertising for ethical reasons, to prevent advertisers from directly influencing editorial matters. Brands are increasingly hiring journalists to create content for their native advertising divisions.
In recent years, we’ve seen the consequences of this blurring of the lines between editorial and advertising, and it hasn’t generally served us well. The division between editorial and advertising in newspapers is most slight in the property and motors sections of newspapers, where all cars are good, and all properties are interesting when they’re not exclusive.
Vast revenues accrued to newspapers from property advertising during the mid-2000s, and although newspaper insiders knew that the property advertising bubble indicated a market at its peak, they largely failed to flag the crash.
When Sunday Business Post property writer Carol Tallon suggested in July that buyers would be wise to wait a few years for an increase in the housing supply, it felt like a very edgy and radical thing for a property writer to say, though in fairness, the paper did need someone to counterbalance the recent if temporary elevation to go-to opinion writer Jim ‘soft-landing’ Power. •