Matthew Gentzkow New Study: Internet Did Not Destroy Newspapers

  • June 12, 2014
  • Science, Tech
  • Comments Off on Matthew Gentzkow New Study: Internet Did Not Destroy Newspapers

Matthew Gentzkow New Study: Internet Did Not Destroy Newspapers

In a new study by Professor Matthew Gentzkow University of Chicago’s Booth School of Business reveals that the Internet did not end newspapers.

There are assumptions about journalism based on false premises. These include that online advertising revenues have to be lower than print advertising, second the web has made advertising more competitive which drives down rates, and third the web is the culprite for the demise of the newspaper industry. Matthew Gentzkow says that people are not looking at online advertising rates correctly.

“Online ad rates are typically discussed in terms of “number of unique monthly visitors” the ad receives, while circulation numbers determine newspaper rates (Yahoo News).”

From Booth’s release on his study:

“This perception that online ads are cheaper to buy is all about people quoting things in units that are not comparable to each other—doing apples-to-oranges comparisons,” Gentzkow says. Online ad rates are typically discussed in terms of “number of unique monthly visitors” the ad receives, while circulation numbers determine newspaper rates… By comparing the amount of time people actually see an ad, Gentzkow finds that the price of attention for similar consumers is actually higher online. In 2008, he calculates, newspapers earned $2.78 per hour of attention in print, and $3.79 per hour of attention online. By 2012, the price of attention in print had fallen to $1.57, while the price for attention online had increased to $4.24

The popularity of newspapers was already declining between 1980 – 1995. Long before the rise of AOL.

This is definitely something to think about.

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