Re: How much advertising is there?

[Jan Szczepanski <jan.szczepanski@ub.gu.se>]

I think Mr Hodgkin is right. Just look at what Ryanair has
achieved. The goal is not just cheap flights, but free flights. A
lot of commercial TV-channels are for free. The OA model is on
the forefront of intelligent development if OA could be less
hostile to the advertising business.

Jan

adam hodgkin wrote:
> On the other hand advertising is getting much, much smarter and
> Google is at the leading edge of that. Web-based
> subscription-only businesses are on the whole getting less smart
> -- since it seems that publishers and aggregators can only offer
> an *aggregation model* for (not very efficient) access management
> to subscriptions.
>
> If consolidation is the only game the subscription publishers can
> offer, these access models will become increasingly ungainly and
> will inevitably lose market share to open access models which can
> leverage the value of a database of intentions across a domain of
> highly differentiated content. The global advertising markets are
> already vastly bigger than the markets for paid information
> services and there is a tendency for paid information services to
> slide to an Open Access model if that is a way of enlarging the
> scope for advertising reach. The Elsevier/Oncology and NYT moves
> of the last two weeks are both signs of that.....
>
> As to the size of the advertising market relative to that for
> information or content subscription services. The global
> advertising and promotion markets are measured in the low
> trillions $USD, and the total markets for electronic and print
> subscription information services (STM, financial and legal) is
> tiny in comparison.
>
> I would suggest that there is still quite a lot to play for in
> the growth of global advertising markets.
>
> adam
>
>
> On 9/21/07, Joseph J. Esposito <espositoj@gmail.com> wrote:
>
>> The recent announcement by the New York Times concerning the
>> termination of its Times Select premium subscription service
>> has deservedly attracted a great deal of attention, on this
>> list and all over the blogosphere and "mainstream media."  The
>> Times may or may not be successful with its new strategy (my
>> own view is that it was the right decision, but the Times's
>> future is by no means assured), but of course not all media
>> organizations have the brand and cultural centrality of the
>> Times; the Times thus is no model for anyone.  What I wonder
>> about is where all the advertising revenue is going to come
>> from to support all these media businesses, whether they are
>> the Times, Elsevier's new ad-supported oncology site, or any of
>> the two dozen new Silicon Valley social networking start-ups I
>> stumbled upon in just the past month (owners of pets, parents
>> of young children, human potential activists, financial
>> planners, etc., etc.), not to mention such academic publishing
>> services as Scholarly Exchange.
>>
>> So we step into the laboratory and ask this question:  How much
>> must the world's economy have to grow in order to support all
>> these media businesses? A media business aggregates audiences,
>> which in turn are sold to advertisers.  The advertisers have
>> their own products and services to sell (and not all of them
>> are media products, thank god).  If they can't sell their
>> products, the advertising dries up and the media businesses
>> scale back or disappear.
>>
>> Let's say a company budgets 10 percent of total revenue to
>> advertising. Thus, with sales of $10 million, the company
>> spends $1 million on advertising.  For every dollar thus spent
>> on advertising, the economy must grow by ten times that amount.
>> How many shirts, stents, time share condos, cars, and toilet
>> seat covers do we need?
>>
>> The market isn't there for all this advertising.  The world's
>> resources are not there to create the forecast volume of goods
>> and services to satisfy the demand created by the advertising.
>> We will run out of fossil fuel trying, and then have virtually
>> no economy left to advertise anything.
>>
>> The notion that the sale of advertising alone somehow can
>> support the full range of information businesses is crazy.  It
>> may work for the Times or South Park, and Elsevier has a shot
>> with its new portal, but the fate of most advertising-supported
>> businesses is oblivion.  Only the strong, the huge, and the
>> totally distinctive survive.  B-level players need not apply.
>>
>> Joe Esposito
>>

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Jan Szczepanski
Fuerste bibliotekarie
Goteborgs universitetsbibliotek
Box 222
SE 405 30 Goteborg, SWEDEN
Tel: +46 31 773 1164 Fax: +46 31 163797
E-mail: Jan.Szczepanski@ub.gu.se







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