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Watch Out for Big-Sounding Percentages

Posted on Tuesday, November 16, 2010 at 2:08 PM

Digital Hype Watch: Misleading numbers often have percent signs.

"Some have referred to the current marketplace as the 'golden age' of online advertising..." So proclaimed a recent Foliomag.com article. It went on, "That's the story at Hearst's Popular Mechanics." The story cited the publication's online advertising as being up 46 percent over last year! It was pointed out that online outpaced print, which was only up 25 percent.

Flying in the face of that buildup is that "print represents 89 percent of the magazine's total revenue." The reader is left to do the math that online constitutes only 11 percent of all revenue. But then again, it may be less. If print is 89 percent of "the magazine's total revenue," what about circulation and list revenue? If there's some of that, it means that online revenue would be less than 11 percent.

Confusingly, the story also states that "most advertisers take an integrated approach of using both print and online advertising." Even accepting the 11 percent online revenue postulation, it means there's a 9 to 1 ratio of ad spending, print to online. Some golden age! What's more, when we calculated out the stated online growth increment, the numbers suggest that it will take at least 15 years before online will even equal print, much less surpass it.

Now, we don't know how factual any of those numbers and resultant calculations might be. But, regardless, they seem to have very little meaning for publishers who are now planning their own online strategies. There is no doubt that online advertising is growing and that publishers need to position themselves accordingly. But the "print is dead" and "tomorrow everything will be digital" predictions found in many quarters deserve some scrutiny. Otherwise, publishers could be led astray as they make important decisions regarding their ascent into multichannel publishing.

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