2012 State of the News Media: Tech companies now in control

Technology companies such as Google, Amazon, Facebook, Apple “now control the future of news.” It’s all about who is winning with generating ad revenue from news. A good example is the fast-growing opportunity of targeted advertising, where Google and Facebook dominate and news organizations lag far behind.

That’s among the take-aways from the 2012 State of the News Media report, released today by the Pew Research Center’s Project for Excellence in Journalism. The news industry, the report says, “finds itself more a follower than leader shaping its business.”

The Project for Excellence in Journalism (PEJ) report points out that even though targeted advertising is one of the forms of online advertising expected to grow most rapidly, only a few of the top news sites use it. Meanwhile, the report says, tech companies like Facebook and Google “are using personal data collected over the internet to direct ads to specific consumers to a far greater degree than ever before – and to a far greater degree than most news organizations are capable of.”

The annual survey by Pew points out that mainstream news organizations could catch up, if they try. Most have the ability but are not yet utilizing their resources at hand.

Only three – CNN, The New York Times and Yahoo! News – employed high levels of targeting based on a user’s recent online activity. While targeted display ads account for just 10% of local online ads, or $1.5 billion, right now, by 2016, they are expected to grow to $14.6 billion and make up more than half the market.

Mainstream media up for sale?

A year ago, the Pew State of the News Media reported: “The news industry, late to adapt and culturally more tied to content creation than engineering, finds itself more a follower than leader shaping its business.” In 2012, that phenomenon has grown.

All this raises the question of whether the technology giants will find it in their interest to acquire major legacy news brands — as part of the “everything” they offer consumers. Does there come a point, to ensure the much smaller media company’s survival, for instance, where Facebook considers buying a legacy media partner such as The Washington Post?

There are already signs of closer financial ties between technology giants and news. As a part of YouTube’s plans to become a producer of original television content, a direction it took strongly last year, it is funding Reuters to produce original news shows. Yahoo recently signed a content partnership with ABC News for the network to be its near sole provider of news video. AOL, after seeing less than stellar success with its attempts to produce its own original content, purchased The Huffington Post. With the launch of its Social Reader, Facebook has created partnerships with The Washington Post, The Wall Street Journal, The Guardian and others. In March 2012 Facebook co-founder Chris Hughes purchased the 98-year-old New Republic magazine.

Read the complete report … click here.


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