Digital Challenges for Ad-Financed News Media in the Nordic Countries on Media Financing, Specifically the Portion of Financing That Comes from Advertisers

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Digital Challenges for Ad-Financed News Media in the Nordic Countries on Media Financing, Specifically the Portion of Financing That Comes from Advertisers View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Göteborgs universitets publikationer - e-publicering och e-arkiv AD WARS AD Digitalisation has changed how we communicate with one another, how we search for in- formation, how we use media and, not least, how media are financed. This report focuses Digital Challenges for Ad-Financed News Media in the Nordic Countries on media financing, specifically the portion of financing that comes from advertisers. Global companies such as Google and Facebook are increasingly challenging domestic media companies’ position in their national advertising markets. The growing influence 3 Mediemarknadens of foreign advertising platforms is an expression of a more far-reaching transformation strukturella utveckling that encompasses both audience and advertisers and is being propelled by technological developments in the media area. This book presents an analysis of how the digitalisation of the advertising market has im- I det här kapitlet analyseras utvecklingen på den svenska mediemarknaden ur ett pacted the business model of Nordic news media companies. As the competition for the strukturellt perspektiv. I tur och ordning redogörs för de huvudsakliga ägarförändring- advertising investments has been increasing, many media companies have been forced to arna inom dagspress, tv och radio. Liksom i det föregående kapitlet är tidsramen åren see their ad revenues decline, in some cases dramatically. Is the financing model that has 2000 till 2015. Kapitlet avrundas med en uppsummerande diskussion. supported Nordic commercial news journalism for at least 150 years breaking up? Or are there differences between the Nordic countries that mean the situation is different in dif- ferent places and in different media? 2000-talet har så här långt varit en högst händelserik period för mediebranschen. Den accelererande tekniska utvecklingen har drivit fram helt nya publik- och annonsörsbe- teenden, alltmedan mediepolitiken kommit att få ett gradvis minskat inflytande över marknadsutvecklingen. Det är i denna kontext som dagens svenska mediestruktur Ad Wars builds on a rich empirical dataset from Denmark, Finland, Iceland, Norway, and ADfått sin form. I det här kapitlet diskuteras några av de huvudsakliga konsekvenser Sweden, which includes both industry statistics and interviews with a large number of för mediestrukturen som följt av de förändringar i medieföretagens omvärld som actors on and around the Nordic advertising markets. The study has been commissioned diskuterades i det föregående kapitlet. and financed by the Nordic Council of Ministers and the Norwegian Ministry of Culture. The data collection and the analysis have been conducted by Jonas Ohlsson and Ulrika | Stiftelserna flyttar fram positionerna Jonas Facht at Nordicom. på tidningsmarknaden OHLSSON & & OHLSSON Som redan nämnts hör dagspressen till de mediegrenar som allra tydligast kommit WARSatt påverkas av de förändringar av medielandskapet som de nya medieteknikerna fört DIGITALmed sig. Oavsett CHALLENGES hur vi mäter är dagspressen somFOR näringsgren AD-FINANCED en bransch på tillba- NEWSkagång. DagstidningsbranschensMEDIA IN THE samlade NORDICintäkter sjönk mellan COUNTRIES åren 2006 och 2014 med 3,5 miljarder i fasta priser. Det motsvarar ett intäktsbortfall på knappt 20 procent. Ulrika Den fallande omsättningen har i ökad utsträckning gått ut över tidningsföretagens lönsamhet. 2013 och 2014 var de sämsta åren i modern tid – sannolikt någonsin – FACHT Jonasför OHLSSON dagspressen i fråga & om Ulrika vinstnivåer FACHT (se tabell A2 i appendix). Den genomsnittliga University of Gothenburg rörelsemarginalen för de tidningsföretag som helt eller i huvudsak finansierar sin Box 713, SE 405 30 Göteborg, Sweden Telephone +46 31 786 00 00 • Fax + 46 31 786 46 55 verksamhet utan statlig hjälp (driftsstöd) uppgick dessa år till -0,8 respektive +0,9 E-mail [email protected] procent. För de stödberoende tidningarna var resultatnivåerna betydligt lägre än så www.nordicom.gu.se (Myndigheten för radio och tv, 2015a). I takt med att intäkterna minskat har tidningsföretagen tvingats till allt större be- NORDICOM 1 sparingsåtgärder. I ökad utsträckning gäller neddragningarna även den redaktionella 1 6 7 5 personalen. En sammanställning genomförd vid Södertörns högskola visar att antalet 9 7 8 Nordicom 1 9 8 7 9 University of Gothenburg ISBN 978-91-87957-61-1 33 AD WARS DIGITAL CHALLENGES FOR AD-FINANCED NEWS MEDIA IN THE NORDIC COUNTRIES Jonas OHLSSON & Ulrika FACHT NORDICOM AD WARS Digital Challenges for Ad-Financed News Media in the Nordic Countries Jonas Ohlsson & Ulrika Facht © Nordicom 2017 ISBN 978-91-87957-61-1 (pdf) Published by: Nordicom University of Gothenburg Box 713 SE 405 30 GÖTEBORG Sweden Translation: Språkservice Sverige AB Typesetting: Henny Östlund Cover: Per Nilsson Content Preface 5 Executive Summary 7 1. Introduction 13 1.1 Various perspectives on the development of the advertising market 14 1.2 The study’s constraints, data and limitations 15 1.3 Outline of the report 19 2. Advertising’s Digital Transformation 21 2.1 Digitalisation is changing the rules of play 21 2.2 Game-changer 1: New advertising platforms 22 2.3 Game-changer 2: New consumer behaviours 25 2.4 Game-changer 3: New advertising solutions 31 2.5 Game-changer 4: New advertiser behaviours 37 2.6 Game-changer 5: New infrastructures for distributing advertising 41 2.7 Summary and conclusions 46 3. The Nordic Advertising Markets 49 3.1 The importance of advertising in different media systems 49 3.2 Advertising investments lag behind GNP 51 3.3 Large differences in digital advertising sales 55 3.4 Summary and conclusions 56 4. The Nordic News Media Companies’ Position in the Advertising Market, 2011–2016 57 4.1 Denmark 58 4.1.1 The digital advertising market 59 4.1.2 The newspaper market 61 4.1.3 The broadcast media market 64 4.1.4 Independent news sites 68 4.1.5 Conclusions 69 4.2 Finland 71 4.2.1 The digital advertising market 72 4.2.2 The newspaper market 75 4.2.3 The broadcast media market 78 4.2.4 Independent news sites 80 4.2.5 Conclusions 81 4.3 Iceland 82 4.3.1 The Icelandic advertising market 83 4.3.2 The Icelandic media market 86 4.3.3 Media companies’ market position and economic development 88 4.3.4 Conclusions 92 4.4 Norway 94 4.4.1 The digital advertising market 96 4.4.2 The newspaper market 98 4.4.3 The broadcast media market 101 4.4.4 Independent news sites 105 4.4.5 Conclusions 106 4.5 Sweden 109 4.5.1 The digital advertising market 111 4.5.2 The newspaper market 113 4.5.3 The broadcast media market 118 4.5.4 Independent news sites 119 4.5.5 Conclusions 120 4.6 Summary and conclusions 121 4.6.1 The digital advertising markets 122 4.6.2 The newspaper markets 124 4.6.3 Commercial TV markets 127 4.6.4 The commercial radio markets 129 4.6.5 The markets for independent news sites 131 4.6.6 Some concluding comments 133 5. Concluding discussion 135 5.1 Similarities and differences between the Nordic countries 136 5.2 Similarities and differences between different forms of media 139 5.3 Similarities and differences between different types of media companies 142 5.4 Strategic considerations 147 5.5 Political considerations 150 References 154 Appendix 1. IRM’s Calculation of the Advertising Market’s Turnover 161 Appendix 2. Media in the Nordic Countries 169 Appendix 3. Studies of the Nordic Advertising Market 209 Appendix 4. Regulation of Advertising in the Media 223 Preface Digitalisation has changed how we communicate with one another, how we search for information, how we use media and, not least, how media are financed. This report focuses on media financing, specifically the portion of financing that comes from advertisers. Global companies such as Google and Facebook are increasingly chal- lenging domestic media companies’ position in their national advertising markets. The growing influence of foreign advertising platforms is one expression of a more far-reaching transformation that encompasses both audience and advertisers and is being propelled by technological developments in the media area. The change that follows in the footsteps of digitalisation is affecting the entire media market, but this study is restricted to analysing the media that contain news and cur- rent affairs journalism. These are the cornerstones of democracy, both nationally and locally. Freedom of expression and democracy require free and independent media, with financing though advertising being an important basis. A large proportion of the journalism that is produced nationally and locally in the Nordic countries comes from newspapers. At the same time, it is the newspaper companies that have been hardest hit by the fall in advertising revenues, which has been expressed through substantial cut-backs in editorial staff. All in all, this makes the financing of news journalism an issue that is extremely pertinent – not just for the Nordic media companies, but also for the Nordic societies as a whole. Nordicom was commissioned to conduct an analysis of the changes to the adver- tising market and its consequences for advertising-financed news journalism in the Nordic countries by the Nordic Council of Ministers and the Norwegian Ministry of Culture in autumn 2016 and this has been a challenging assignment. No similar comparative study of the Nordic advertising markets has been undertaken previously. The assignment was made more difficult by the fact that it is currently difficult to gain access to the type of material that is required in order to illustrate the development of individual industries and individual companies in the advertising market – particularly the digital market. The transparency of the companies that sell advertising is limited as regards the reporting of digital revenues. This applies to companies in the Nordic countries to the same extent as those based outside of the region.
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