First Click: Jeff Bezos is taking his newspaper where the ads are

September 23rd, 2015

By Thomas Ricker
on September 23, 2015 07:30 am
@Trixxy

Jeff Bezos, the Amazon CEO who surprisingly took ownership of The Washington Post two years ago is quietly, but aggressively, making big moves in digital. His push away from The Post's print and .com business comes at a time when ad blocking the web is de rigueur and newspaper advertising revenue from both print and digital is in the toilet. Cue the Pew:

Before the internet, advertising at big newspapers accounted for about 80 percent of revenues. That dropped to an average of 57 percent, according to Pew Research’s 2015 State of the News Media report. "For the past five years, newspaper ad revenue has maintained a consistent trajectory: Print ads have produced less revenue (down 5 percent), while digital ads have produced more revenue (up 3 percent) – but not enough to make up for the fall in print revenue."

And it’s only getting worse: digital ads, once thought to be the savior of print, are increasingly being blocked.

The chart above from an oft-quoted study by Adobe and PageFair (a company that shows ads to adblockers) reflects life before iOS 9 enabled content blockers on the world's vast population of iPhones and iPads. According to PageFair, ad blocking grew by 48 percent to reach 45 million active users in the US alone in the year leading up to June 2015.

This is the publishing environment Bezos chose to enter. "I didn’t know anything about the newspaper business, but I did know something about the Internet," Bezos said last year. "That, combined with the financial runway that I can provide, is the reason why I bought The Post."

So here we are, two years down the runway and Bezos’ Washington Post is practically free for Amazon Prime subscribers and Kindle owners; is partnered with Flipboard and Apple News; and, as of yesterday, will publish 100 percent of its stories to Facebook as Instant Articles. "It is important for The Washington Post to be available everywhere a reader may turn to get news," said Fred Ryan, of the The Post last week.

What's notable is that all these platforms are immune to the current spate of ad blockers, and track reader habits more effectively than any ad network executive would have ever dreamed possible on the web. In other words, Bezos is taking his ad-supported business to places where eyeballs will actually see the ads.

It’s too early to say whether Bezos’ off-platform strategy will work. But with print circulation and ad revenues in decline, and ad blocking on .com sites only accelerating, what choice does he have?

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