Media economist Robert Picard argues in his latest post ithe worst culprit in the economic decline of newspapers is not the loss of classified advertising to the Internet.
Wrong, he says. It's a myth and self-deception, more powerful than a lie.
Picard points out that classified advertising's growth has not come substantially in areas of direct newspaper competition. He notes that search and lead generation activity accounts for half of the online revenues, and that overall online classified advertising has never accounted for more than 20 per cent of total. Indeed, as a percentage of the total, it is in decline.
Picard says newspaper classified advertising held its own in recent years as the Internet grew. The recession in the last two years has eroded classified, but not diverted it to online.
"The Internet certainly is taking some money from newspapers, but it isn’t the worst culprit.," he writes. "The real competitor is direct mail and home delivery advertising that have taken much preprint and display advertising from newspapers in recent decades by delivering better household reach."
Picard believes newspapers have an opportunity to reclaim much of the lost ground through more effective print/online bundling and more effective direct marketing to those people and firms targeted by start-ups.