Retail's black and white wake-up call

A long-term look at advertising revenues show just how disastrous the internet has been for newspapers. As we step into the age of mobile internet, more sectors – particularly retail – face a similar change.

Today I want to devote a graph to all chief executives and boards who think a technology-led revenue collapse can never happen to them.

In particular, I want retail chief executives to ponder the graph. There is no magic in bricks and mortar stores, just as there was no magic in printing presses.

image


As you can see its a graph of just what has happened to US newspaper advertising when adjusted for inflation.

Few in the newspaper business predicted this event 10 years ago.

In the US over the past decade, lots of big newspaper companies have gone bust. But given what's happened to newspaper advertising over that period, it's a wonder they all haven't collapsed.

In Australia newspaper trends are usually two or three years behind the US, so we may experience a similar curve.

But in my view this is just an opening change signal. Ahead of us is the mobile revolution which is going to suck advertising out of many areas including free-to-air television.

Advertisements on a smartphone cost a fraction of online, web-based display ads, and can be much more effective.

What happened to newspapers will be repeated in other areas.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles