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1. Shaping the Future of the Newspaper SPECIAL REPORT
ANALYSING STRATEGIC DEVELOPMENTS AND OPPORTUNITIES IN THE PRESS INDUSTRY MAY 2007 © WAN
2007 This yearbook serves as
World a digital compass for the world’s
media strategists, by providing
Digital
more than 160 data sets
from more than 35 sources,
and analysis, about the
Media revenue-making and media
usage trends for the Internet
and mobile industries,
Trends and compared with that
of established media
www.futureofthenewspaper.com
All the strategy reports are available to WAN members and subscribers at the SFN website

2. Shaping
the Future
of the Newspaper
www.wan-press.org
A WORLD ASSOCIATION OF NEWSPAPERS PROJECT,
SUPPORTED BY WORLD’S LEADING BUSINESS PARTNERS
www.man-roland.com/en/p0001/index.jsp
A LEADING COMPANY FOR NEWSPAPER PRODUCTION SYSTEMS
www.publigroupe.com/en/hom.cfm
THE SWITZERLAND-BASED INTERNATIONAL ADVERTISING
AND PROMOTION GROUP
http://w3.upm-kymmene.com/
ONE OF THE WORLD’S LEADING PRINTING PAPER PRODUCERS
www.telenor.com/
THE LEADING NORWEGIAN TELECOMMUNICATIONS, IT AND MEDIA GROUP
© WORLD ASSOCIATION OF NEWSPAPERS, 2007

3. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
TABLE OF CONTENTS
Introduction 5
Executive Summary 9
1 The multiple media advertising landscape 15
Introduction 15
Global media revenues market 17
Global advertising spending 18
Advertising spending in North America 19
Advertising spending in the United States 20
Advertising spending in Canada 21
Advertising spending in EMEA 22
Adspend share in the EU 23
Advertising spending in Western Europe 24
Advertising spending in Asia Pacific 24
Advertising spending in Latin America 25
Adspend change in EU, USA and Japan 26
Conclusion 27
Appendix 28
2 Digital media usage trends 39
Media usage trends 39
Internet 44
Mobile 52
Video online 64
3 Impact on newspaper industry 67
Newspapers advertising expenditure 69
News sources 70
Online newspapers users 73
Mobile phones 76
Newsblogs 77
4 Newspaper industry digital trends 81
Internet usage 82
Revenues 82
Video advertising 83
Subscriptions 84
Banner format 85
Mobile revenues 86
Digital content 86
5 Conclusion 89
6 Appendix 93
Links to research content partners 93
3

4. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
4

5. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
Introduction: A digital compass
Across the spectrum of industries worldwide, companies for the 21st Century. Around the
statistical trends and projections have world, digital media usage and revenue are
traditionally served as key ingredients for growing at a double-digit pace, while traditional
business plans and new product proposals. media like print, TV and radio develop strongly
Business development gurus use this research in numerous countries, though they are coming
to plot their long-term strategies and devise under pressure in some mature markets.
new products. In the media sector, newspaper
companies are navigating the uncharted Meanwhile, the growth of new digital immigrants
territories of mobile, Internet and other digital to Internet and mobile is starting to level off in
media, armed with data and forecasts from a some parts of the world. For example, the UK-
variety of disparate sources. based Informa research company projects that
between 2006 and 2011, the number of unique
The World Association of Newspapers has mobile subscribers will rise 42.2 percent to almost
compiled these important digital media studies 3 billion, but in 2011, the annual growth rate of
into World Digital Media Trends to provide a new subscribers will slow to a mere 3.03 percent.
digital compass for the world’s media
strategists, to assist them in tapping into the By 2004, mobile subscription revenue in the
tremendous opportunity of digital media. 30 OECD* countries had reached US$376.6
million. After its heyday in the mid-1990s –
World Digital Media Trends, in its inaugural mobile revenue growth rates peaked at 63
year, explores global and regional trends in percent in 1995 – mobile revenue growth
digital media for revenue-making, usage started to slow down. Since 2001, it has
patterns, and comparisons to that of other remained at less than 20 percent. So the
media. The data include projected trajectories mobile phone industry has supplemented
of these media trends. subscription rates with a variety of download
The mobile and Internet channels represent far- and subscription add-ons, which have made
reaching business opportunities to media the telecom industry a more lucrative business.
5

6. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
Percentage of U.S. adults online
%
80
70
60
50
40
30
20
10
0
5
6
7
8
0
01
01
02
02
04
04
05
05
05
06
6
0
3
-9
-9
-9
-9
-0
-0
-0
-0
b-
p-
n-
p-
b-
e-
n-
e-
p-
n-
e
ly
ov
ay
ug
ril
ch
ay
un
un
un
Ja
Ja
Ja
Fe
Se
Se
Fe
Se
Ju
Ap
M
-M
N
ar
-A
-J
-J
-J
g-
il-
M
b-
ly
ch
ay
ay
ay
r
Au
Ju
Fe
Ap
ar
M
M
M
M
Source: Pew Internet & American Life Project Surveys, March 2000-April 2006
Meanwhile, in Scandinavia and North slowdown in growth of online advertising in the
America, broadband penetration and Internet coming years. While double-digit increases have
subscription penetration are tapering off. The been the norm starting with 2002, the trend will
implications are clear: As the throngs of new slow significantly after 2008, the IAB/PwC
Internet and mobile users plateau, traffic forecasts.
growth also will likely slow down. As the
From 2008 to 2009, online advertising spending
traffic slows, so will revenue growth.
growth will likely slow to 9.8 percent from 17.5
Indeed, the Interactive Advertising Bureau / percent, and from 2009 to 2010, the rate will
PricewaterhouseCoopers projects a significant slow to 6.8 percent.
Global mobile revenue
US$ millions
400
376.6
350
332.17
300
279.43
250 256.32
231.64
200
190.65
150
143.8
131.39
100 105.9
72.87
50
44.64
29.10
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Note : 2003 instead of 2004 data were used for Finland, the Netherlands and Japan.
Source: OECD Key ICT Indicators [www.oecd.org/sti/ICTindicators]
6

7. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
Mobile subscriber growth U.S. online advertising spending
by regions growth, 2000 to 2010
Subscriptions Growth
(millions) (%) Percent increase/decrease from prior year
1000 02 2005 02 2006 Growth 70
-11.8 2000
900 62 60 -15.8 2001
800
700 56 50 2002 20.9
600 39 40 2004 32.5
500
30 2005 30.3
400 33
300 26 2006 26.8
20
200 2007 15.1
11 12 10
100 2008 17.5
0 0 2009 9.8
Africa Americas Asia Europe Europe Middle US /
Pacific Eastern Western East Canada 2010 6.8
Source: Informa Telecom & Media, Mobile Industry Outlook 2007 Source: IAB/PricewaterhouseCoopers data, eMarketer, September 2006
As these media channels mature, the trends in
usage patterns also should stabilize over time. Global Internet advertising spend
That should make strategic development more (US$ billions)
manageable, since consumer targets
2005 2006e 2007e 2008e 2009e
presumably will become more predictable. PwC 19.2 22.8 26.1 29.3 32.2
Until then, new segments of the digital Zenith 18.7 24.5 31.3 36.9 42.7
landscape will continue to emerge without Piper Jaffray 22.0 31.2 41.3 51.4 61.3
warning, and many will become popular Sources: Shaping the Future of the Newspaper comparison of 2006
PriceWaterhouseCoopers, Zenith Optimedia, Piper Jaffray statistics
havens for users. In the past few years alone,
the growth of specialized forms of digital
Media markets continue to attract more ad
communications include SMS, instant
expenditure during the century’s first decade.
messaging, online video, podcasting, and
However, market share for ad expenditure is
blogging. These draw millions of users and
shrinking for some media, including
contributors worldwide each day.
newspapers, as the Internet is pulling a higher
According to American Association of percentage of share each year. According to
Advertising Agencies research published PriceWaterhouseCoopers, from 2001 to 2010,
in 2006, the three fastest growing forms of the global newspaper industry ad spend is
Internet media between 2005 and 2006 in projected to grow from about US$100 billion
the U.S. are podcasting (20.2 percent), blogs to US$140 billion. Meanwhile, though the
(29.6 percent) and video (50.2 percent). Internet ad spend is still small compared to
newspapers, its market share is increasing
The rapid growth of the digital marketplace has
dramatically, from 3 percent in 2001 to 10
created a challenge for multimedia publishers.
percent in 2010.
Digital media is difficult to track both because of
the speed of growth and its fragmented nature. The research chronicled in WDMT runs a
While research houses attempt to accurately broad gamut:
capture the trends, statistics often don’t jibe with
• Ad spending across media channels
other published research. For instance revenue
• Consumer use of multiple media
forecasts can quickly become out of date as the
• Mobile phone revenue opportunities
marketplace shifts unexpectedly. Some
• Simultaneous media consumption
discrepancies in data can stem from differences
• Youth media consumption trends
in research methodology, sample sizes or target
• Video online growth
groups. Still, the result can be radically divergent
• Local online advertising trends.
numbers for the same category of research.
One example is Internet advertising spend. The World Association of Newspapers
Since 2000, actual statistics and projections wishes to thank a long list of esteemed global
from a variety of companies have varied widely. and country-specific research organizations
Publishers should study these discrepancies in that have shared their data for the purposes
statistical trends with a discriminating eye. of this compilation. The World Association
7

8. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
Global advertising spending and market share, newspapers vs. Internet
US$ millions Newspapers ad expenditure (US$ millions) Internet ad expenditure (US$ millions) (%)
160,000 Newspapers market share (%) Internet market share (%) 35
140,000 30
120,000
25
100,000
20
80,000
15
60,000
10
40,000
20,000 5
0 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
of Newspapers hopes this collection provides We rely on the sources of data and the
the reader a clearer picture of the digital generosity of the research houses in order to
landscape by analyzing the context of the act on our commitment to bring the widest
data, and the opportunities the trends may array of information to our publisher
represent. Web addresses have been provided colleagues.
so readers can access a wealth of data that
To contribute research to this compilation,
goes well beyond the published charts in
please contact Martha Stone, Director of the
WDMT. Further, the World Association of
Shaping the Future of the Newspaper project,
Newspapers will continue to publish news
at mstone@wan.asso.fr
items on www.FutureoftheNewspaper.com
as new studies appear throughout the year. Web sites can be found on Page 93.
The new Web site will provide a variety of
* The 30 OECD Countries are Australia,
research reports and analysis on issues that
Austria, Belgium, Canada, Czech Republic,
affect our industry.
Denmark, Finland, France, Germany, Greece,
WDMT is a work in progress. Next year’s Hungary, Iceland, Ireland, Italy, Japan, Korea,
volume will be expanded, with many more Luxembourg, Mexico, the Netherlands, New
sources of data. As years go on, we will Zealand, Norway, Poland, Portugal, Slovak
continue to illuminate the emergence of many Republic, Spain, Switzerland, Sweden, Turkey,
more digital channel frontiers. United States and United Kingdom.
8

9. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
Executive Summary
The media landscape has changed forever. For In order to regain mindshare and market share,
media consumers, digitalization has expanded many media companies are launching new
the daily media usage options from traditional products on a variety of media channels. The
media including print, TV, and radio, to research compiled for the World Digital Media
include a vast array of digital choices like Trends show clearly that each individual
Internet, podcasting, blogging, interactive TV, consumer demands these new channels in
short messaging, instant messaging, video, different ways and at different times. In the
digital radio, and much more. final analysis, it behooves media companies to
take advantage of the emerging opportunities
For media companies, these seismic shifts in in their marketplace by investing in new
the media landscape have caused the definition methods of publishing and exploring revenue
of competition to change. No longer are local options for these new channels.
newspapers just competing against other local
newspapers. They are now vying for Of course, new digital trends emerge on a
advertising spend and subscriptions in an regular basis. Only ten years ago, the Internet
increasingly crowded media marketplace. In and mobile phones carried text and voice data,
fact, they may be competing with companies respectively. Thanks to digitalization and
that are not traditional media firms at all. technology advancements, each media has
morphed into a multimedia channel. Media
Now, local media companies are competing content has become interchangeable among
with international digital brands like Yahoo! digital media. New technologies allow for the
and Google for local advertising. In these days rapid deployment of multimedia content across
of increasingly busy lifestyles, multitasking channels. For example, the same video used on
and multisensory overload, established media television can be converted for publishing on
companies also are frequently losing the battle smaller screens like computers, video iPods
for mindshare, or time and attention. and mobile phones. Depending on the viewer,
9

10. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
user, reader or listener’s preferences, video, WAN employs a methodology based on well-
graphics, text and sound can be accessed on established, credible data provided by the CIA
almost any digital medium. WorldFactbook 2007 and OECD statistics
about broadband, mobile and Internet
Digital media trends are not created equally,
penetration. In all, 35 countries are profiled,
country by country. In order to make sense of
encompassing every major region in the world.
the country-by-country and regional trends in
digital consumption and revenue-making, the By indexing the key digital media categories,
World Association of Newspapers has created WDMT has found that the Scandinavian
the WDMT Index, which allows us to show countries, the United Kingdom, the United
digital “hotspots” around the world. States, Germany, Luxembourg, the
Netherlands, Australia, New Zealand,
Some markets are more engaged than others
Portugal, Switzerland, Korea and Japan, all
when it comes to digital channel usage,
rate as the World’s Hot Spots, with more than
broadband penetration and mobile telephony
60 percent Internet penetration and 70 percent
consumption. The WDMT Index ranks
mobile penetration.
countries based on an equal weighting of
mobile penetration and Internet penetration in In addition to the WDMT Index, this WDMT
each country. yearbook is filled with trends from a variety of
Digital Hot Spots
World Association of Newspapers digital index shows countries
with combined highest mobile and Internet penetrations
Hotter Internet 60%+ Mobile 70% +
Australia, Denmark, Finland, Germany, Iceland, Japan, Korea, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Sweden,
Switzerland, United Kingdom, United States
Warmer Internet 40-60% Mobile 65-70%
Austria, Belgium, Czech Republic, France, Ireland, Italy, Slovak Republic, Spain
Cooler Internet <40% Mobile <65%
Argentina, Brazil, Canada, Chile, China & HK, Colombia, Greece, Hungary, India, Mexico, Poland, Russia, South Africa, Turkey,
Venezuela
Source: 2005 OECD and Central Intelligence Agency statistics, equally weighted for mobile and Internet
10

11. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
Media usage during an average week
% (% of U.S. population)
120
During an average WEEK (MONDAY-SUNDAY), do you… Age 18-34 35-54 55+
100
80
60
40
20
0
Listen Listen to Listen Watch Surf the Read/ Read Read Read Instant Blog? Video
to the satellite to web TV? Internet? send magazines? the the mail? message? gaming?
radio? radio? radio? E-mail? newspapers?
Source: BIGresearch, SIMM9, Dec 2006
reputable and established sources. Not only do blogs are among the biggest names in
the data showcase a variety of mobile newspapers online, including the New York
consumption patterns, but also show the Times, Asahi Shimbun, Yomiuri Shimbun,
individual trend patterns for individual media Times of London, and Guardian Unlimited.
elements, like blogging, video and visiting
• More than 1 trillion SMS messages were sent
specific types of content, by country. In the
worldwide 2006. The mobile SMS market has
U.S., for example, BIG Research shows the
become a multi-billion dollar industry More
usage patterns of three age groups for all types
than 90 percent of the non-voice revenue from
of media, during the course of a week.
mobile industry come from SMS. More than
The research shows, for example, that more 80 percent of all mobile phone usage
than 80 percent of the respondents accessed worldwide is from voice transmissions.
the Internet in a given week, and the
percentage was higher as the age groups • In 2005, podcasting emerged on the media
become younger. However, those using email scene, and since, has become a popular
during the space of a week were more likely to medium for news reports and infotainment.
be in the older age categories. Podcasting is emerging as a revenue channel
for some of the world’s media through
Every year, segments of the digital channels advertising and subscriptions such as iTunes.
emerge and quickly grow in popularity.
Consider: • In 2006 and 2007, video advertising emerged
as the hot new channel for advertising online.
• In 2004, weblogs became a mainstream
Around the world, video advertising is
online media form, and as of mid-2006, an
growing at double-digit rates, according to the
estimated 50 million blogs existed. About
Interactive Advertising Bureau and Borrell
175,000 new blogs are created each day, with
Associates, in separate reports. Online
about 1.6 million postings per day, according
advertising also is led by search advertising,
to Technorati, a blog aggregation Web site.
classifieds and banner ads, according to these
Blogs drive a tremendous amount of traffic to
research houses.
news Web sites. Items from blogs outside of
news Web sites frequently reference and link • The once-burgeoning Web population is
to news blogs, thereby driving traffic to them. starting to slow down in terms of new users.
Among the most linked-to news Web sites with While Internet advertising continues to grow at
11

12. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
a quick clip, there are signs of a slowdown, the majority of the Internet population has
especially in the West. Meanwhile, the outlook regularly accessed news and information sites
for mobile phone advertising sales, in the world’s most Internet savvy countries,
subscriptions and handset sales are robust, but led by the United States, France, Switzerland
new subscribers are projected to slow down and the United Kingdom. The world’s most
significantly in 2011, according to Informa. popular news Web sites are led by the biggest
brands online, including Yahoo!, MSNBC and
These are just some of the overarching themes
CNN. Among the Top 10 are several
that the World Digital Media Trends data show
newspaper companies, including the New York
us. Around the world, the consumption of
Times, Gannett and USA Today.
online video and audio is growing. From 2005
to 2006, upwards of half of the Internet According to Pew Research Center,
populations in Spain, the UK, Australia, significantly more time is spent on traditional
Brazil, France and Germany have accessed media on news in terms of frequency and
audio and video online. For example, news is a length of time, compared with that of the
popular destination for Internet and mobile Internet in the United States. An average of 40
phone users. According to Nielsen NetRatings, minutes is spent per user on news with
newspapers per session, compared with 32
minutes online. Only 23 percent reported
getting their news online “yesterday,” while 40
Online video/Audio viewership percent got news in newspapers, and 57
% of internet population 16+ percent got news from television yesterday.
looked at video/audio content online
% News also is among the three most paid-for
50 Q3 2006
Growth since Q3 2005
types of information in the countries with the
47
40 highest penetrations of mobile usership across
40 38 38
34
Asia and Europe.
30
30
20
27 Meanwhile, new forms of revenues are
emerging online. Paid search and streaming
10 15
9 9
11 video are the fastest growing forms of local
7
0 online advertising in the U.S., according to
Spain United Australia Brazil France Germany
Kingdom Borrell Associates. Online commerce also has
Source: Nielsen//NetRatings GNETT, September 2005-2006 taken off around the world.
Percentage of Internet population visiting news
and information news sites
%
80
70 74 74
69
67
60 64 64 63
61 60 59
50
40
30
20
10
0
United France Switzerland United Germany Australia Brazil Spain Japan Italy
States Kingdom
Source: Nielsen//NetRatings NetView. September 2006. Home & work data, and home-only data for Brazil, Japan, Spain and Switzerland
12

13. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
The world’s most popular News sources by medium
news sites and the time spent, U.S.
Rank Brand Active Unique (% of audience who)
Channel Reach Audience
Got news there yesterday
(%) (millions) %
60 For 30 minutes or more
1 Yahoo! News 12.2 36.9
2 MSNBC 9.0 27.3 Average minutes spent per user
50 57 53
3 CNN 8.8 26.7
4 AOL News 7.4 22.3 48 43
40
5 Google News 5.7 17.4 40 40
6 NYTimes 4.5 13.7 30 36 32
7 BBC News 4.3 13.1
8 Gannett Newspapers 4.3 13.0 20 24 23
22
9 Internet Broadcasting 3.9 12.0 10
Websites 9
10 USA TODAY 3.7 11.3 0
Television Newspaper Radio Internet
Source: Nielsen//NetRatings Global Index September 2006.
Home & work data. Global statistics, except Japan Source: Pew Research Center Biennial News Consumption Survey 2006
Most frequent use of mobile commerce in selected countries
Japan Korea Hong Kong, Chinese Greece Finland
China Taipei
Sample (persons) 2,146 4,581 1,375 1,809 497 66
First place Download Download Reading Download News Download
services services services services
28.8% 60% 58% 36.1% 12.1% 31.8%
Second place News Games Deliver News Download News
services services
16.2% 17.2% 21.6% 14.1% 9.9% 24.2%
Third place Location Ticketing for Games Investment Weather Financial
information movie/music info/trans report services
14.9% 12.7% 16.9% 10.2% 9.1% 9.1%
Source: ECOM (2004b) Survey of Mobile Internet Use, Tables 3-5 and 3-7
According to Nielsen NetRatings, a significant According to Arbitron research, online users
increase of purchases online was reported in report spending less time with traditional
the UK, Germany, Australia, France, Spain and media because of their time spent online. For
Brazil between 2005 and 2006. Despite the example, 30 percent of online users report they
new revenue channels of advertising and e- spend less time with newspapers and
commerce, the growth of the Internet appears magazines, while 33 percent of online users
to have had a negative impact in some respects report spending less time with television
on traditional media. because of their online usage.
U.S. local online advertising in 2007 Percentage of Internet population
(US$ millions) who have purchased online
Banners & Paid search in last six months
Listings $1,837 Base: 16+ who have ever used the internet
$5,272 24% %
50 Q3 2006
48 47 Growth since Q3 2005
40 45
43
Streaming
68% 5% video 30
31
$371
3% 20
E-mail ads 19 21 19
$233 10 12
9 10
2 2
0
United Germany Australia France Spain Brazil
Kingdom
Source: Borrell Associates Inc. Source: Nielsen//NetRatings GNETT, September 2005-2006
13

14. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
Meanwhile, Internet advertising revenue
continues to grow, seemingly at the expense of
some established media. According to Zenith
Global ad spending growth
Optimedia, Internet advertising is set to grow % by medium, 2006-2009
80
an estimated 75 percent, from US$18.7 billion Total
70 74.55
in 2005 to US$42.7 billion in 2009, while Newspapers
newspapers will grow 9.5 percent during the 60 Magazines
same period, from US$119.2 billion in 2005 to TV
50
Radio
US$135.2 billion in 2009. 40 Cinema
Outdoor
The ever-changing dynamics among 30
Internet
established and emerging media has kept 20 25.39 24.08
media executives focused on plotting the 16.89
10 13.27 15.03 11.58
future development of their existing media 9.53
0
holdings, and the future investment in Source: Zenith Optimedia
emerging media.
The World Association of Newspapers has
created World Digital Media Trends in 2007 to
provide a digital compass for the world’s Percentage of U.S. online population
media strategists, to assist them in tapping into spending less time with medium
the tremendous growth of the digital due to time spent online, 2006
%
opportunity with a compilation of these 35
important digital media studies. To see the 33
30
latest releases of new research, go to 30 30
25
www.FutureoftheNewspaper.com.
20
19
15
10
5
0
Radio Magazines Newspapers Television
Source: Arbitron Inc./Edison Media Research
14

15. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
1. The multiple media advertising
landscape
Introduction Internet market for almost a decade, while in
Central and Eastern Europe, the market is just
In every region of the world, online advertising starting to take off.
is the fastest-growing category of adspend.
Latin America’s lagging Internet growth
In virtually every region of the world,
is caused by a variety of factors, but mostly,
newspapers and TV by far represent the lion’s
low Internet consumption compounded by
share of media adspend, and will continue to
low literacy rates.
do so for the foreseeable future. These are the
key conclusions of global research detailed in While statistics vary considerably between
this chapter, provided by Zenith Optimedia, PwC and Zenith, the trends are similar: TV
PriceWaterhouseCoopers and other research and newspapers media are losing ground to the
houses. Internet in terms of adspend, but remain far
and away the number one and number two
Between 2006 and 2009, Zenith Optimedia
media for adspend, worldwide, and will
projects that Internet advertising will grow in
continue to reign for years to come. A notable
the double digits in every region of the world,
trend is that projections for both PwC and
with the fastest growth happening in Central
World Advertising Research Center (WARC),
and Eastern Europe (194 percent), Western
show that TV has become the dominant
Europe (94.33 percent) and Asia (71.69
advertising medium worldwide. Even in places
percent). The slowest growth is occuring in
where newspapers are the number one adspend
Latin America, with 29.68 percent, followed
media today, TV will surpass it in the near
by North America with 64.86 percent.
future, if the predicted trajectories continue.
A variety of factors affect growth rates. For example, PwC found that in 2001,
Perhaps the most important factor is the Newspapers were the top ad spending medium
maturity of the Internet market in each region. in the U.S., in fact, almost double that of the
For example, North America has had a robust number two, TV Networks Broadcast and
15

16. DECEMBER 2006 SHAPING THE FUTURE OF THE NEWSPAPER
Cable. PwC projects, however, that by the end overtake Newspaper adspend this year.
of 2010, TV Networks Broadcast and Cable
Meanwhile, the share of Internet adspend will
will pull nearly even with newspapers, and
shift significantly in the coming years, mostly
then overtake it a few years later.
plucking adspend from traditional media
Separately, data from World Advertising budgets. By 2009, the largest share of Internet
Research Center (WARC), 2006, showed that adspend will occur in North America, (10.54
Newspaper adspend in the top 15 markets in percent), followed closely by Western Europe
the European Union was almost 50 percent (9.41 percent), according to ZenithOptimedia.
of total adspend in 1985, with Magazines The world Internet adspend will jump from
ranked second. In 1990, TV adspend just 2.84 percent in 2002 to 8.5 percent in
supplanted Magazines, and TV is poised to 2009.
Global media market (US$ millions)
Video games Magazine publishing
Recorded music Book publishing
Radio/out-of-home advertising TV distribution
1,500,000 Filmed entertainement Newspapers publishing
Internet advertising and access spending TV networks broadcast and cable 46,462
47,927
86,799
104,060
1,200,000
31,116 285,561
36,965
68,503
82,848
900,000
169,444 117,585
20,631
39,009
54,482 130,533
64,169 102,005
65,617 230,282
600,000 114,382
92,759
103,419 168,202
109,953 206,129
300,000 184,045
167,775
230,262
177,067
127,049
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Note: Beginning in 2003, newspaper Web site advertising in the United States is included in both the newspaper and Internet segments
but is counted only once in the overall total. Prior to 2003, newspaper Web site advertising in the U.S. is included only in the Internet segment.
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Share of internet adspend (%)
2002 2003 2004 2005 2006 2007 2008 2009
North America 4.74 5.00 5.32 6.01 7.18 8.89 9.71 10.54
Western Europe 1.44 1.98 2.80 4.11 5.46 6.72 8.02 9.41
Central & Eastern Europe 0.28 0.38 0.69 0.93 1.31 1.61 1.98 2.51
Asia Pacific 1.57 2.09 3.00 4.39 5.60 6.64 7.43 7.95
Latin America 0.04 0.57 0.69 0.80 0.85 0.89 0.93 0.97
World 2.84 3.21 3.75 4.64 5.71 6.95 7.74 8.50
Source: Zenith Optimedia
16

17. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
Global media revenues market digital music. PwC projects the Internet
market will grow from US$6.6 billion in
Double-digit growth is the balliwick of 2001 to US$16.9 billion in 2006, and will
digital media, while traditional media are reach US$ 28.6 billion in 2010, which is
growing at a significantly slower pace. It’s more than fourfold expansion in 10 years.
important to note that traditional media, led The video game market is projected to
by newspapers, television and radio, still double from US$2.6 million to US$4.5
command the vast majority of the media million in 2010. Meanwhile, traditional
market revenues, worldwide. media markets such as newspapers,
The global media revenues market has grown magazine, cable, radio and book publishing
steadily each year from US$ 1.1 trillion in are growing at single-digital compounded
2001 to a projected US$ 1.8 trillion in 2010. In annual growth rates (CAGR).
ten years, the global media market will grow a
According to the PwC in 2006, the Internet
projected 28.3 percent, according to
advertising and access spending market has
PricewaterhouseCoopers Global Entertainment
the highest CAGR from 2006 to 2010, of
and Media Overview 2006-2010.
12.9 percent. Following Internet are video
The fastest-growing media markets are games (11.4 percent) and TV distribution
decidedly digital, particularly Internet and (8.3 percent), and separated from TV
entertainment-oriented, including video network, broadcast and cable, which is
games, filmed entertainment cinema and projected to grow at a 6.6 percent rate.
Global media market, by media: 2006-2010 CAGR
Video games Magazine publishing
% Recorded music Book publishing
Radio/out-of-home advertising TV distribution
15 Filmed entertainement Newspapers publishing
Internet advertising and access spending TV networks broadcast and cable
12 12.9
11,4
9
8.3
6 6.6
6.2
5.2 5.3
3 3.6
2.9 3.1
0
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
17

18. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
Global advertising spending Global ad spending growth
% by medium, 2006-2009
According to Zenith Optimedia, TV, 80
newspapers and magazines are still the Top 3 70
Total 74.55
media for adspend, while the Internet is by far Newspapers
60 Magazines
the fastest growing recipient of adspend, with TV
a projected growth rate of 75 percent from 50
Radio
2005 to 2009. 40 Cinema
Outdoor
30
According to Zenith Optimedia, global Internet
20 25.39 24.08
advertising spend is estimated to grow 23.9
16.89
percent from 2005 to 2009, from US$399.9 10 13.27 15.03 11.58
9.53
billion to US$495.4 billion. 0
Source: Zenith Optimedia
Internet advertising spending is growing
fastest, at an estimated 75 percent rate from
US$ 18.7 billion in 2005 to an estimated US$ Advertising spending worldwide,
42.7 billion in 2009. Zenith has forecasted that by media, 2005-2009
cinema and outdoor will grow 25 percent, TV Internet
while newspaper, radio, and magazine ad Newspapers Outdoor/Others
Magazines Cinema
spend are projected to grow less than 14 Radio
percent each.
% of total adspending
In terms of the media composition of total ad 40
37.8 37.2
spending, TV, newspapers, and magazines 35
remain the top three media for ad spending 30 29.8
27.3
globally, but their percentages will slip slightly 25
from 2005 to 2009. The Internet is projected to 20
surpass radio and outdoor/others in 2008 in ad
15 13.3
spend. Radio and outdoor used to be number 12,5
10 8.6 8.6
four and number five; respectively. Ad 5.4
8.0
5.9
5
spending on cinema has been always a niche 4.7
0 0.4 0.5
market compared with other media. 2005 2006 2007 2008 2009
Source: ZenithOptimedia, December 2006
Advertising spending worldwide,
by media, 2005-2009
Cinema Radio TV
Internet Magazines
Outdoor/Others Newspapers
US$ millions
2,272
500,000
42,685
29,126
1,697 39,548
400,000 18,712
21,769 62,078
34,348
300,000 52,993 135,228
119,178
200,000
184,502
151,187
100,000
0
2005 2006 2007 2008 2009
Note: Currency conversion at 2005 average
Source: ZenithOptimedia, December 2006
18

19. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
Advertising spending in North America
(US$ millions)
250,000
Cinema
Internet
Outdoor/Others
699
200,000 Radio 21,680
Magazines
Newspapers 9,076
TV 23,792
150,000
29,458
57,243
100
100,000 3,486
12,087
12,457
37,323
63,740
50,000
37,206
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Zenith Optimedia
Advertising spending
in North America North America ad spending growth
% by medium, 2006-2009
TV and newspapers are still the biggest 80
adspend beneficiaries, but are threatened by Total
70
the fast-growing Internet, cinema and outdoor. Newspapers
60 Magazines 64.86
In North America, advertising spending has 50
TV
Radio 52.09
steadily grown every year, except between
40 Cinema
2001 to 2003, when ad spending was stagnant, Outdoor 36.52
due to the impact on the world economy of 30
Internet
events surrounding 9/11, according to Zenith 20
Optimedia. 10 12.29
16.13
7.85
5 4.53
While TV, newspapers, and magazines sit atop 0
Source: Zenith Optimedia
the North American market for advertising
spending and will do so for years to come,
they are now slow-growth markets. Where
huge increases are expected in Internet, cinema
and outdoor advertising between now and the
end of the decade, newspapers and TV in
North America are growing at only a 5 percent
and 4.3 percent rate, respectively. Meanwhile,
Internet, cinema, and outdoor are projected to
grow at rates of 65 percent, 52 percent, and 37
percent, respectively.
19

20. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
Advertising spending in U.S. (US$ millions)
Out-of-home TV distribution
Radio Newspapers 9,400
Internet TV networks broadcast and cable 24,695
Magazines
200,000 6,840 25,500
20,760
29,230
5,193 15,550
150,000
17,861 24,550 37,160
7,210
32,510
22,325
100,000 58,700
25,438
51,160
44,304
50,000
51,960
39,850
26,962
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Note: Beginning in 2003, newspaper Web site advertising in the United States is included in both the newspaper and Internet segments
but is counted only once in the overall total. Prior to 2003, newspaper Web site advertising in the U.S. is included only in the Internet segment.
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Advertising spending Advertising spending in U.S.:
in the United States 2006-2010 CAGR
Out-of-home TV distribution
The ad spending statistics projected from Radio Newspapers
PricewaterhouseCoopers tell a slightly Internet TV networks broadcast and cable
different story than those from Zenith. % Magazines
20
Advertising spending in United States has
grown from US$149.3 million in 2001 to 15
US$230.4 million in 2010, a growth of 15.2
54.35 percent in ten years. From 2006 to 2010, 10
the overall U.S. advertising spending CAGR is 8.3
5 7.1
5.4 percent. 4.3 4.5 4.1 3.5
In terms of ad spending for each medium, 0
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
PwC found that in 2001, newspapers were
the number one ad spending medium in the
U.S., and almost double that of number two,
TV networks, broadcast and cable.
2007 advertising spending
PwC projects, however, that in 2010, TV
% growth in U.S.
20
networks, broadcast and cable will have
17.9
almost caught up in adspend, and if the 15
trajectories continue, will overtake
newspapers a few years later. Meanwhile, 10
the Internet has grown from a niche medium
(US$7.2 billion in 2001) to a major player 5 5.8
(US$25.5 billion in 2010), an increase of
2.7 2.3
more than threefold. 0
Print Online Events Other media
media media -3.5 including PR
-5 TV, radio &
Source: Outsell’s Advertising other media
Tracking Database
20

21. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
Advertising spending in Canada
2007 U.S. advertising spending
In Canada, the Internet is experiencing an
forecast almost 20 percent compounded annual growth
Other media including PR
14.6%
rate in adspend. TV networks and newspapers
still remain the main players.
TV, radio and
other media Print media
5.2% 40.1% According to the Global Entertainment
and Media Overview from
PricewaterhouseCoopers, 2006, advertising
spending in Canada will grow from US$6
Events billion in 2001 to a projected US$8.9 billion
19.7%
in 2010, a 47.3 percent growth in ten years.
TV networks, newspapers, and radio are still
the top three ad spending media.
Online media
20.4%
Source: Outsell’s Advertising Tracking Database
Advertising spending in Canada:
2007 U.S. ADVERTISING SPENDING 2006-2010 CAGR
FORECAST Out-of-home Magazines
Radio Newspapers
According to Outsell’s Advertising Tracking % Internet TV networks broadcast and cable
Database 2007, Print Media is forecasted as 20
the leader in the U.S. with 40 percent of 18.8
15
overall ad spending; however, its growth rate is
only 2.7 percent in 2007. 10
5 6.6
4.7
3.8
2.9 2.5
0
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Advertising spending in Canada (US$ millions)
10,000
Out-of-home
Radio 363
Internet
Magazines 1,312
8,000
Newspapers
TV networks broadcast and cable
821
232 854
6,000
875
2,488
80
673
4,000 2,064
3,053
2,000
2,112
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
21

22. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
However, Internet ad spend is projected to In terms of 2006-2010 CAGR in EMEA,
grow tenfold between 2001 and 2010, from Internet will exert the most aggressive growth,
US$ 80 million in 2001 to US$ 821 million in with a 21.2 percent CAGR, according to PwC.
2010. Meanwhile, traditional media ad spend growth
is slow by comparison.
As one might expect, in terms of 2006-2010
CAGR, Internet is the leader, with 18.8
percent compounded growth. Meanwhile, the
various print media have a sluggish growth
of between 2.5 and 2.9 percent CAGR from
2006-2010.
Advertising spending in Europe,
Middle East and Africa (EMEA)
PwC predicts that Internet spending will grow
about tenfold in Europe, the Middle East and Advertising spending in EMEA:
Africa, or 21.2 percent CAGR, from 2006 to 2006-2010 CAGR
2010. Despite slower growth, TV networks
Out-of-home Magazines
and newspapers, will remain by far the number Radio Newspapers
one and number two recipients of adspend in % Internet TV networks broadcast and cable
2010. 25
20
Advertising Spending in EMEA was 21.2
US$101.4 billion in 2001, and will be 15
US$157.7 billion in 2010, with a 55.45 percent 10
growth over that ten-year period. TV networks,
5 7.4 7
newspapers and magazines will continue to be 5.7
4 3.3
the top three recipients of adspend among 0
media. Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Advertising spending in EMEA
(US$ millions)
200,000
Out-of-home
Radio
Internet
Magazines
150,000 Newspapers 11,157
TV networks broadcast and cable 8,681
14,896
8,385
24,838
6,968
1,536 7,745
100,000 6,413 21,164
5,325 44,369
19,739
38,846
36,846
50,000 53,751
41,733
31,581
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
22

23. VOLUME 6 REPORT N° 2 WORLD DIGITAL MEDIA TRENDS
Adspend share in the EU Ad expenditures in the EU-15 saw consistent
growth between1985 and 2000, hitting almost
According to the Year-End Advertising 90 billion Euros in 2000. It then declined
Expenditure Statistics from World Advertising between 2001 and 2003, during the worldwide
Research Center (WARC), 2006, newspaper advertising downturn, and has yet to hit that
adspend in the top 15 markets in the European level again.
Union was almost 50 percent of total adspend
in 1985, while magazines ranked second. In
1990, TV adspend supplanted magazines and
is expected to overtake newspapers this year.
Meanwhile, adspend for a variety of other
media (including directories, radio, outdoor,
cinema, and Internet) has experienced steady
growth since 1999.
Percentage share of adspend by medium in the EU-15, 1985-2005
% share
50
Newspapers Magazines TV Other media*
45
40
35
30
25
20
15
10
5
0
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
* Other Media” includes directories, radio, outdoor, cinema, and internet advertising. Direct mail Expenditure is not included.
Source: World Advertising Research Center, Year End Advertising Expenditure Statistics, Apr 2006
Advertising Expenditure Trend in the EU-15, 1985-2005
% change (at constant 2000 prices) Euro (2000) m
14 100,000
% change Euro (2000) m
12 90,000
10 80,000
8
70,000
6
60,000
4
50,000
2
40,000
0
30,000
-2
-4 20,000
-6 10,000
-8 0
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
Source: World Advertising Research Center, Year End Advertising Expenditure Statistics, Apr 2006
23

24. MAY 2007 SHAPING THE FUTURE OF THE NEWSPAPER
Advertising spending Advertising spending in Asia Pacific
in Western Europe Media adspend in Asia Pacific will expand 90
In Western Europe, the Internet has the percent from 1995 to 2009, according to Zenith
greatest growth potential with a 94.33 Optimedia. The huge increase will be led by
projected percent growth rate, according to Internet and cinema adspend increases of 72 percent
Zenith Optimedia projections for 2006 to and 41 percent, respectively. It projects magazine
2000. Other media will grow at a rate of about adspend will see a growth rate of only 8 percent.
10 percent, including the top three media: TV, Advertising spending in Asia fell or flattened
newspapers, and magazines, according to the twice in the last decade, mostly because of the
projections. Asian Currency Crisis in 1997 and 9/11 in
In Western Europe, advertising spending will 2001. However, it is estimated that in 2009 the
grow from US$66.8 billion in 1995 to advertising spending will achieve US$109.4
US$114.4 billion in 2009. billion, which represents a 90 percent growth
from 1995. TV and newspapers are the Top
Although TV, newspapers and magazines still two recipients of advertising spent in Asia
garner the most adspend, their growth rates are
slowing. TV remains the fastest growing of the
these three, and Zenith forecasts that TV will Western Europe ad spending growth
overtake newspapers to become the top % by medium, 2006-2009
advertising medium in Western Europe, this 100
year. Meanwhile, the Internet is the most Total 94.33
dramatically growing media in the region, and 80 Newspapers
Magazines
is estimated to reach US$10.8 billion in
TV
adspend by 2009. 60 Radio
Cinema
Zenith Optimedia estimates that Internet ad 40 Outdoor
spending CAGR will far exceed that of any Internet
other media in Western Europe, with a 20
projected 94.33 percent growth rates from
12.7 9.79 10.42
2006 to 2009. Meanwhile other media have 6.49 6.11 9.12 6
0
growth rates near 10 percent or lower Source: Zenith Optimedia
Advertising spending in Western Europe
(US$ millions)
140,000
Cinema
Internet
120,000 Radio 927
Outdoor/Others 10,849
Magazines
100,000 6,263
Newspapers 7,474
TV
19,208
80,000
515
3,269 34,349
60,000 3,728
13,576
40,000 26,762
35,371
20,000
18,911
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Zenith Optimedia
24