Comstock's magazine 0618 - June 2018 - Page 48

n MEDIA TOGETHER, FACEBOOK AND GOOGLE CONTROL MORE THAN 60 PERCENT OF THE U.S. DIGITAL AD MARKET answered morosely. “It’s hard to claim And while at no point in living it’s a good deal when you see the stock memory could the finances of news- performance.” papers be considered stable (there was By summer 2009, McClatchy had the competitive assault from radio in cut 35 percent of its workforce from the 1920s, television in the 1950s and the prior year. The Sac Bee reported at internet in the 1990s), the loss of digi- the time that the cutbacks were com- tal advertising to Google and Facebook mensurate with reductions at other may mark a fatal blow. Together, those newspaper chains, triggered by the companies control more than 60 per- recession. Pruitt stepped down from cent of the U.S. digital ad market — and McClatchy in early 2012. He took a job newspapers are no match for the adver- as president and CEO of the Associated tising rates of internet behemoths. Press, a position he still holds. (The A.P. Everything comes down to scale, did not respond to a request to inter- says Keith Herndon, a journalism pro- view Pruitt for this article.) fessor at the University of Georgia. “People eventually came to the con- “Google and Facebook can scale adver- clusion that Pruitt made a bad deal. He tising rates across hundreds of millions drove us in exactly the wrong direction, of users,” Herndon says. “If a local ad- and we’ve been dealing with it ever vertising publication has to meet that since,” says Ed Fletcher. “Some people rate, they cannot scale it.” are surprised that he is still working With the traditional revenue model in media, having such a failure on becoming obsolete, McClatchy is fol- his résumé.” lowing a more bountiful path that’s recently caught the public spotlight Dawn of a New Age for its surreptitious use by tech firms A successful digital pivot on the part like Facebook: using consumer data to of McClatchy will require a delicate tailor ads to targeted audiences. Mc- dance. Growth in its online audience is Clatchy’s newspaper ads department a point of encouragement. Executives is morphing into a more sophisticat- predict 2018 will mark the first year ed digital advertising and consulting that revenue from digital advertising agency. The company’s other highly eclipses newspaper advertising. News- paper ads make up a quarter of the company’s total revenue, down from two-thirds of the pie a decade ago. But while revenue from digital subscrip- tions is steadily rising, it doesn’t make up for the revenue losses resulting from the decline of newspapers. Daily print circulation has dropped 43 per- cent over the past decade and Sunday circulation 33 percent, according to McClatchy CFO Elaine Lintecum. Digi- tal subscriptions continue to grow, but print subscriptions combined with sin- gle-copy sales still make up more than two-thirds of all the com- pany’s revenues generated from readers. Meghan Sims, McClatchy's director of strategic video initatives photo : tom huyn 48 comstocksmag.com | June 2018