How is the media market structured and what business model for new media? In the information hubbub, it is difficult to measure the media impact, as well as the business success of models related to the information economy and visibility.
The rise of advertising as a means of financing the media
Since the 18th century with the birth of the first daily newspaper, access to information depends mainly on the print media, with the purchase of dedicated copies in order to know the information relayed. It is from the sale of these media that most of the media resources come from. With the proliferation of media, and then with easy access to information, the sources of income became less obvious.
At the same time, these changes have led to changes in the habits of the population, inducing the idea that information does not belong to the category of services for which it is paid, as if it were being produced at no apparent cost. Faced with this state of affairs, advertising has gradually taken a significant place in the media space, becoming the main mode of financing of the media and relegating the purchase and subscription to residual sources of income.
According to regular surveys conducted by IREP – the Institute for Research and Advertising Studies , media advertising revenues have been growing since 2015, and despite a decrease in these revenues in the first half of 2015, the following statistics show a continuous increase in subsequent years.
While media such as television, cinema and billboards experienced significant growth in the first half of 2016 with +2%, +11.8% and +4% respectively, digital experienced a significant evolution the following year, which slowed down the growth of more traditional media.
The saturation of information space for the benefit of advertising
To offset the expenses due to printing and to offer new offers to advertisers, the media have developed access to their content via the Internet, mimicking paper practices because they cannot grasp new trades and new uses.
However, with the democratization and trivialization of social networks and the use of search engines (search, especially via Google), the media space has been seized by new players and totally fragmented. The budgets for communication, in addition to being reduced, have split on the multitude of media, limiting the revenues for each space. Thus, in 2016, there was a slight (continuous) decline in investment in advertising in the press in France with a decrease of 6.7% compared to 2015, i.e. a budget of 2.286 billion euros.
Similarly, the radio station saw its cash flow cut by 1.3% to 712 million euros. On the other hand, cinema, television and the Internet are doing well by increasing their advertising revenues by 8.9% (€90 million), 0.4% (€3.254 billion) and 7% (€3.453 billion) respectively, putting spending on the internet in the lead for the first time.
Health crisis, drastic accelerator of changes in business models in media spaces
Of course, the health crisis is changing the situation and is massively slowing down investment in the media. Thus, in 2020, the turnover of the sector stands at 13.308 billion euros. This is a decrease of 11.6% compared to 2019. These figures include the scope observed by IREP (television, cinema, radio, press, outdoor advertising, directories, advertising mail, printed without address) as well as internet revenues (search, display, social and other levers calculated by the SRI e-pub Observatory in partnership with UDECAM).
Television finally posted the smallest regression with -11% compared to a relatively stable 2019. Radio also saw its revenues drop by 12.7%. In 2019, however, the media showed a slight growth of 1.7%. On the other hand, it is the press that is suffering the most from the health crisis, accentuating more than ever the downward trend in investment observed for several years. Thus, the revenues of the pqn, pqr, phr, magazines, specialized and free press fell by -23.7%. They were already down in 2019 with -4.1%.
In comparison, the digital television, radio and press media shows a very contained decline to -2.4% in 2020 compared to 2019. IREP figures consistent with the entire market, rather in favor of digital.
Media financing: the decline of traditional media in favour of digital
The various media generate revenue of 5.908 billion euros according to data from September 2017. The gap is widening between traditional media such as print and television, which are experiencing a worrying fall, and online advertising, which is constantly growing.
According to the 18th edition of the SRI e-pub Observatory, carried out by PwC, in partnership with UDECAM, the figures for 2017 were already regularly exceeding the forecasts made in 2016. In addition to exceeding television advertising revenues in 2016, digital continues to rise (33% of investments compared to 28.3 for television). Thus, even if in 2020 its growth experienced a sharp slowdown, it still continued. Digital revenue, driven by Social and Search, then increased by 4%. By way of comparison, the average annual growth rate has been 14% since 2013. Nevertheless, this decline is not permanent and was even made up in 2021. Compared to 2019, revenue increased by 29%.
Search, Social and Display, the new “kings” of advertising
Two digital levers have largely benefited for many years from these investments to the point of leaving only crumbs to others. Search (search engines) already represented in 2017 more than half (55%) of the global market for almost a billion euros; and display (graphic advertising on the internet, video advertising, links and sponsored pages…) 35% of the market and 644 million euros. The other levers then shared the remaining 10%, still increasing their revenues each year.
In the same way, 2017 marks by turning in digital media investments. Now, 41% of digital spending is reserved for search and display on mobile compared to 29% in the first half of 2016.
In 2021, despite the health crisis, all formats are doing well. Search recorded a growth of +28%. It accounts for 42% of the market with a turnover of 3,254 million euros. Social occupies 26% of the market with a growth of 22% over the year. Display, hit more brutally by the crisis, grew by 31% and stood at 20% of the market. Other formats, such as affiliation, emailing and comparators recorded an increase of 8% and weighed 12% of the market.
The use of mobile as an advertising medium is increasingly important. It should be noted that revenues generated through mobile are still increasing, from 66% in 2020 to 70% in 2021.
The monetization of access to information: the end of the traditional media business model?
The growth of these new media is leading to changes in the patterns of dissemination and consultation of information.
Indeed, many media outlets that have turned to digital ask the reader to subscribe and therefore pay to view articles. While some have wanted to keep reading free to maintain their readership, others offer a short excerpt of the article, or a free article per month, the aim being to develop subscriptions to have access to all articles. A return to the roots, where the reader paid to access the paper information. However, the mechanics have changed, as the reader is used to accessing all content for free. He then experiences a sense of frustration, leading to the opposite effect of that sought by the media.
In order to reconcile the reader with the paper press, the media propose more mixed solutions, with subscription subscription. Thanks to the latter, the reader has access to the information site, but also receives the paper support. In addition, advertisers once again have a space that gives them greater visibility than on the Internet.
A way to seduce the diehard paper readers as well as digital enthusiasts, while expanding the sources of income of these media.
The war on content and audience
The online press is trying to reinvent itself to include advertisers in its pages, offering interesting solutions at first glance to capture the reader’s attention. The use of very raucous titles is a good example. But when the reader wants to consult the article, he is confronted with advertisements that are sometimes untimely and not related to the content consulted. A tiring situation, because he can not read in optimal conditions, regularly causing the abandonment of the article.
Mobile is very affected by these new practices, making it impossible to read articles. Yet more than 50% of French people have been connecting to the Internet from their mobile since 2017. 55% in 2021. The media are therefore engaged in a real war head-on to capture the attention of the audience. Which manifests the need to be able to access the content, but does not want to be overwhelmed with repeated and untargeted advertisements.
In the face of falling advertising revenues, publishers are trying to diversify. The shift to the specialized press has emerged as the best solution, thanks to a market with strong potential and strength of brands. The multi-media projection also helps to gain a larger share of the audience, which needs innovation.
At a time when the renewal of its economic model appears to be an emergency, the media have every interest in looking for new sources of income. While using the tools available to return to a more sustainable growth.
Finally, in the face of excerpts from articles, from multiple sources, such as Google News, content seems consumable without audience acquisition. Old demons resurface… A very fragile bulwark to capture and retain the audience. What if things were approached from a different angle? A business approach: what does the pampered audience want to read/see? And who are the advertisers willing to pay to reach this audience precisely?
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