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Advertising slump continues

By on July 1, 2008

In the UK, the Financial Times reports falling advertising revenues hitting share prices across the media sector. Trinity Mirror fell 28% while other newspaper groups and ITV also saw substantial falls.

To an extent, the strong background economy has masked the impact on newspapers of the ongoing migration to online advertising. In a weak economy, as advertisers cut back on display spend and reduce classified advertising unless they can see clear metrics (which favours online), newspapers suffer.

The real risk for newspapers is that once we get through this slump the behaviour of a whole generation of media buyers (who tend to be young, hence with little institutional memory) will have been permanently shifted to online.

As one unnamed analyst put it in the FT, the risk is “that when you come out the other side of the downturn, a lot of that revenue will have disappeared forever online.”

And that will be good news for those of us betting on an advertising-funded online future.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: