USA Today Shift Reflects Compelling New Digital Data

The announced reorganization by Gannett's USA Today to shift its business model away from traditional print and to focus on digital operations reflects compelling new economic data published exclusively in this week's subscriber-only Jack MyersMedia Business Report (Compelling New Data on Digital vs. Traditional Media Economy.)Ad spending in traditional media will be the same in 2010 as it was a decade ago in 2000 ($162.5 billion before factoring in inflation), and will remain unchanged through 2012. Newspaper advertising peaked in 2000 at $48.4 billion and is projected by Myers to be only half that amount, $24.4 billion, in 2012. Full 1999-2012 economic data is available to subscribers to Jack MyersMedia Business Report.

The daunting economics of traditional advertising are stunning, with virtually all the growth in ad spending into the foreseeable future targeted to digital media applications. While display advertising is projected by Myers to increase only 5.0% annually between 2010 and 2012, and search advertising will also grow in the mid-single digits, emerging digital categories will increase between 26.2% (videogame ads) and +65.0% annually during this period (online video)). Social media and mobile will also grow in the mid-double digits (specific data is available at www.jackmyers.com).

As reported in this week's Jack MyersMedia Business Report, the percentage of their investment in advertising sales organizational resources devoted to digital is less than five percent. Compared to digital-only media companies, traditional media companies are at a distinct competitive disadvantage.

Traditional media companies' greatest advantage is the consumer equity value of their content brands, but to date most have only marginally mined this value in the digital ad world. The opportunity being mined by USA Today is to lead the market through investments in digital content, sales and marketing.

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