The numbers make interesting reading.
- Out of a total ad spend in the UK of £11bn, newspapers take 13% or roughly £1.5bn.
- Internet advertising takes just less than half at about £5bn
- News ad revenue has been falling since 2001. It’s roughly half what it was then. Some forecasters say that the graph, that has been dropping like a stone since 2001, will now start to stabilise at it’s present level. Others, extrapolate the present trend and say UK news ad spend will be £500m by 2017.
- Internet advertising spend looks likely to grow at just over 10% for the next five years with mobile advertising growing at double that.
It’s against this back drop that Rupert Murdoch has decided to launch, this week, a new print paper, the Sun on Sunday. It defies the basic logic of doing everything you can to cut your print cost base whilst developing your web properties as fast as you can.
Regardless of circulation figures, if print ad revenue continues to fall as it has, the Sun on Sunday will be value destroying, however, if print ad revenue stabilises or starts to grow, it’s a brilliant move, timed to perfection.
The graphs and probabilities are against Mr Murdoch, but they have been before, and he has succeeded. Time will tell as to whether this is an act of sentimentality or an inspired judgement.