The US newspaper business has lost 50% of its advertising market in the last seven years. Google Adwords has taken over a large part of that market and takes parts of other publishers as well. How and why? My educated guesses:
Taking on the big guys
Smaller advertisers (i always use my dad’s business as an example) have money to spend, but the effort needed exceeds the profit for newspapers and publishers. The sales guy has targets to stay motivated and putting the same effort into larger deals is more interesting to them.
Google Adwords gives advertisers like my dad the option to compete with the big guys, within a small budget. Impossible when it comes to pull page advertising in newspapers and/or magazines.
Google Adwords doesn’t really care when:
- You cut your budget.
- End your campaign halfway.
- Optimize your campaign after two days.
- Change ads after just 24 hours.
- put more money into the same campaign.
Bottomline: Google has opened up to a market that is larger then traditional news media ever imagined. Local advertisers appear to be very lucrative as long as you have the option of shifting the responsibility into their laps. Google did that while newspapers were focussing on contracts with the big guys.
The big guys are now slowly leaving or opting for online advertising for lower CPM rates. The newspaper business has taken decades of effort to kill themselves.