Sunday, May 1, 2011

The Case of the Great Media Collapse

By Heather Turner


“You know my methods, Watson. There was not one of them which I did not apply to the inquiry. And it ended by my discovering traces, but very different ones from those which I had expected."
     The Memoirs of Sherlock Holmes (1893)

Walking out and about in any city I’ve ever visited is overwhelming and surprising ... not necessarily because of the strange people or the amazing architecture. Rather, being in a city is a rare opportunity for a rural person to be immersed in advertisements and mainstream traditional media. Ads are telling: where ads are placed and the audiences they target. These two things can tell you where you are. San Francisco, known for its political liberalness, is covered in ads which play into the hippie stereotype. Sprint Cellular ads tout, “Peace, Love and Coverage,” while its competitor Helio appeals to a “Mobile Utopia." In Las Vegas, nude pictures with cleverly placed stars and a phone number taunt tourists from a fleet of vans serving as billboards. Commuting in London’s underground tube system is where I spotted the first plastic surgery ad I had ever seen. But, what happens when the ads go away?

That is exactly what happened in early 2009. It has since been referred to as “the Great Media Collapse.” The Great Media Collapse was as severe as the name suggests and its repercussions are still felt today in the traditional media and PR industry. Major magazines and newspapers still struggle to recover ad revenue, while advertisers explore social networking and applications to communicate with target audiences.

In the short term, the real world implications for target audiences was the literal disappearance of ads for more than a month in early 2009. I had first noticed this in London around New Years Eve. The most notable difference was the appearance of the city’s underground system. The tube, normally covered in all manner of ads, was almost completely devoid of the stuff. Many display cases for ads remained empty or were filled with government sponsored public service messages. Upon flying back to America’s Heartland and picking up the latest Sunday editions of the Kansas City Star and the St. Louis Post-Dispatch, I found that each was about half the size they normally would have been. I realized then, that something big was going on in the advertising industry. Something that was big enough to affect the industry on a global scale.


While the media collapse did appear to happen overnight, it wasn’t really the case. The troubles in the traditional media had started long before the ads disappeared. The business model of major newspapers and magazines had been unravelling for years, even before online advertising became prominent. For starters, newspapers had suffered for decades from the “Wal-Mart phenomenon.” Poynter Institute researchers explained, “The retail juggernaut rarely runs newspaper advertising, and other big-box retailers like Home Depot and Circuit City have shifted from display advertising to inserts” (State of the News Media Report, 2006). By putting competing retail chain stores out of business, Wal-Mart effectively siphoned off a great deal of revenue from publishers.

On top of the pressures from declining retail ads, consumer’s reading habits were changing. A cultural shift was afoot as the booming US population shifted from urban to suburban housing, complicating the home delivery of afternoon papers. Long working days, along with the breakdown of the nuclear family had also contributed to declines in evening circulation. With the exception of retirees, all demographics were simply reading newspapers less. The Pew Project for Excellence in Journalism noted: “In 1950, 123 percent of households bought a newspaper (in other words there were 1.23 papers sold per household). By 1990, only 67 percent of households bought a newspaper. By 2000, it was 53 percent” (State of the News Media Report, 2004). Another blow to revenue came as a result of the 2001 recession, in which total advertising dropped by 9% (ibid).

These long term pressures coupled with the rise of the Internet had left the publishing industries decidedly more anemic looking by 2004. Amidst these trends, Bill Keller, the executive editor of the Times, captured the mood in the publishing industries, “At places where editors and publishers gather, the mood these days is funereal. Editors ask one another, ‘How are you?,’ in that sober tone one employs with friends who have just emerged from rehab or a messy divorce” (Alterman, 2008). Magazines were suffering, too. Between March of 2008 and 2009, Advertising Age found that more than 30 magazines, including Playgirl, had ceased publication (Ives, 2009).

While many papers still garnered strong profits in the mid-2000’s, the overall industry remained sluggish and was marked by sporadic revenue growth (State of the News Media Report, 2004).
For example, Gannett, the largest publishing chain in the US, was doing quite well. Its daily USA Today boasted a circulation of nearly 2.3 million along with a total readership of 4.3 million in print (Gannett Press Release, 2007). However, it too struggled with revenue losses due to major advertisers spending less (Gannett Press Release, 2007). The auto, pharmaceutical, and entertainment industries were all pulling back on their advertising budgets. Despite some bright spots here and there, after 2005, advertising expenditures industry wide became increasingly negative. In 2006, print advertising was down by 1.7%. By 2008, expenditures were down 17.7% from the previous year. By 2009, there was collapse: advertising expenditures had fallen by a whopping 28.6%, the most drastic decline the industry had ever experienced (Newspaper Association of America, 2011).

What all these numbers don’t tell you is what was going on behind the scenes in newsrooms, which universally faced cuts leading up to the Great Media Collapse. The fundamental changes to journalism that were occurring were not “just a flesh wound.” Rather, journalism as we know it was in crisis. For nearly twenty years, newsrooms had been shedding reporters. However, this trend accelerated in the 2000s. By the end of 2009, newspaper staff was down to the bare bones, having shed a quarter of its workforce over the course of the decade (State of the News Media Report, 2009). With roughly 14,000 less journalists working in print, inevitably, the quality of news was affected. The PEJ had noted that of 259 newspapers the organization surveyed in early 2008, “59 percent reported reductions in staff, but even more, 61 percent, said that less space was being devoted to news (State of the News Media Report, 2009).” From the largest publishers in the nation, including Gannett, McClatchy, New York Times, and Tribune Company, to Metro papers, such as the Oregonian, The Boston Sun and the Dallas Morning News, newsroom cuts were outright Draconian. The vast majority of daily papers saw their newsrooms cut by half.


With the content of papers degrading and overall circulation declining, PR practitioners were realizing that they could no longer rely solely on traditional media to appeal to consumers who, en masse, were seeking a fragmented media experience online. What alleged to be the death knell of print news appeared to be an exciting opportunity for the PR industry. However, advertising and PR firms across the board suffered even larger losses in staff and revenue than the anemic print industries. Since the beginning of the recession in 2007, US marketing and ad agencies have slashed some 100,000 jobs. Even the largest agencies, including WPP, Interpublic, and Publicis, collectively cut 8.6% of their worldwide staff. At the time of the Great Media Collapse of early 2009, employment in advertising had dropped to its lowest point since 1994 (ibid). PR firms, although representing a much smaller portion of agencies, had also lost more than 4,000 staff since the recession.

The issue was that new media platforms were developing rapidly, making it difficult for advertisers to get a handle on how to market successfully in a digital world in which the target audience was largely annoyed by too many ads. In this break-neck environment, experts in PR and advertising couldn’t quite agree on what to do. Survey research conducted by Yankelovich in association with Sequent Partners, revealed that most of the organization’s advertising clients still did not quite know how to develop ads for a digital platform. J. Walker Smith, the President of Yankelovich, said “There’s a lot of experimentation, and we’re probably not as good as we think” (Elliot, Stewart, 2008).

The heart of the problem was reaching target consumers whose attitudes about digital advertising were largely distrustful. Ad firms had to decide: should more effort be put into digital media and into annoying the piss out of people who use handheld devices? Or should there be a marriage of both traditional and new media platforms? On the one hand, getting an ad campaign right on the internet means creating word-of-mouth buzz that can become viral. On the other hand, research conducted in 2008 suggested that consumers were much more used to traditional media ads and generally received them more positively than digital ones (Elliot, Stewart, 2008). What’s more, some consumers had come to view digital ads as downright intrusive (Elliot, Stewart, 2008).

Cash strapped ad agencies had no alternative but to explore low-cost digital media, so they’ve done so with full force. Although the industry staff numbers and growth have not recovered from the Great Media Collapse, the experimentation and gambling in digital media is now more than paying off. Just one year after the Great Media Collapse, internet advertising has surpassed newspaper advertising, becoming the second largest advertising medium in the world behind television (Worden, Nat, 2011). According to the International Advertising Bureau, internet advertising spending last year reached $26 billion, an increase of 15% from 2009 (Worden, Nat, 2011). Key to the success of online marketing has been the innovation of customized search algorithms pioneered by Google Inc., and the explosion of video and display ads. Additionally, mobile advertising generated an extra $550 million in 2010, and is only expected to grow (Worden, Nat, 2011).


All the efforts by print publishers and ad firms seem to be paying off, as advertising on the internet has now fundamentally transformed not only the way consumers shop, but the attitudes of target audiences towards digital ads. As the online version of Advertising Age recently pointed out: consumers have upped their game. Recent research conducted by Yahoo and Universal McCann suggests that consumers now trust internet ads more than television. “When it comes to media, the Internet comes out on top as 2 in 3 people stated they trust the Internet for researching their purchases followed by 43% for magazines and 35% for TV” (Wong, Edwin … et al, 2011). Consumers using the internet to hunt for bargains and to research products before purchase account for this shift in attitude, as they can take it upon themselves “to act as their own filters, picking and choosing which sources to rely on and which to ignore” (Wong, Edwin … et al., 2011). Overall global internet ad spending is projected to exceed $72 billion this year alone, and will near the $100 billion mark by 2013 (Marshall, Jack, 2011).

The relevance of page views and sharing has also meant that the newspaper industry, while still seeing declining circulation numbers, can claim that their overall readership has improved (State of the News Media Report, 2011). Unfortunately, this online success has not yet translated into a fully recovering industry. Rather, advertising revenue is still on the decline, down 6.7% from 2009, in which ad revenue went into freefall, dropping more than 28% (State of the News Media Report, 2011). It appears that while the Great Media Collapse is slowing, the publishing industry is still a shadow of its former self, “With the losses of the three previous years, newspaper advertising is down roughly 48% total since 2006 – in other words, barely half what it was five years ago. Expenses are headed back up, especially for newsprint, whose prices are running 20% to 30% higher, compared to a year earlier” (State of the News Media Report, 2011). This has left an increasing amount of total revenue completely dependent on the success of internet advertising.


Thus, the case of the Great Media Collapse of 2009 is solved. A symbiotic relationship between traditional print media and the PR/advertising industries has lead to what is projected to be a golden age of digital ads. However, the internet boom has come with consequences. First and foremost has been the near-collapse of the traditional media revenue model. The decades build up to the Great Media Collapse has also meant that there are basically much fewer people working in both the print and PR industries. This factor along with an increasing tendency towards ever greater media mergers have contributed to a shift from traditional news values to market driven values.

On the other hand, the efforts of these two industries has lead to a drastic change in the way consumers consider digital ads, and even the way that consumers shop. The paradigm shift in reader habits has been a saving grace for print and PR. Within 2 years of the most devastating media collapse witnessed in history, advertising is as vibrant as ever. Even when the ads do disappear from the papers, from the billboards, and from magazines- there exists an intangible world, accessible to all, available instantly, and tailored-made to fit YOU.


2009. “Newspapers: News Investment,” State of the News Media Report, Pew Project For Excellence in Journalism. Retrieved: May, 2011. < -intro/news-investment/>.

2011. “Trends and Numbers: Advertising Expenditures,” Newspaper Association of America. Retrieved: May 2011. <>

2004. “Newspapers: Economics,” State of the News Media Report, Pew Project for Excellence in Journalism. Retrieved: May, 2011 < economics/>.

Alterman, Eric. 2008. “Out of Print The Life and Death of the American Newspaper,” The New Yorker, Mar. 31, retreived Apr. 2011.

Elliot, Stewart. “Traditional Media Not Dead Yet for Marketing, Study Says,” New York Times, June 18. Retreived: May 2011. < media-not-dead-yet-for-marketing-study-says/>.

Ives, Nat. 2009. “A Guide to Magazines that Have Ceased Publication,” AdAge. Dec. 15. Retrieved: April 2011. < publication/132779/>.

Marshall, Jack. 2011. “Global Ad Spend Hurt by Events in Japan and Middle East,” ClickZ Marketing News & Expert Advice,” April 11. Retrieved: May 2011. < /clickz/news/2042622/global-spend-hurt-events-japan-middle-east>.

Moon, Craig. 2007. “Mid Year Media Revue Conference Gannett Presentation,” Gannett Press Release. June 20. PDF.

Wong, Edwin, Ring, Karen. 2011. “More Shopers Trust the Internet than TV,” Advertising Age, May 24. Retrieved: May 2011. < 227736/>.

Worden, Nat. 2011. “Web Ads in the US resumed double digit growth in 2010 outpacing traditional media,” Down Jones Newswire, retrieved: May 2011.

No comments:

Post a Comment

No to the Status Quo! News and Opinion Blogs

Blogger Widgets