Australian Media Landscape Trends

Australian Media
Landscape Trends
September 2020
Infographic 03
Executive summary 04
What caused the decline in Australian newspaper revenues? 06
Where did the growth of online search revenues come from? 12
How have reader preferences changed over time? 17
Appendix 21
This report was commissioned by Google and prepared by AlphaBeta Australia. All
information in this report is derived or estimated by AlphaBeta analysis using both
proprietary and publicly available information. Google has not supplied any
additional data, nor does it endorse any estimates made in the report. Where
information has been obtained from third party sources and proprietary research,
this is clearly referenced in the footnotes.
Note: All dollar figures are Australian dollars (AUD).
Contents
αlphaβeta | 3
Newspaper revenues have declined
-$0.3B
circulation revenues
+$0.1B
display revenues
-$1.3B
$1.4B
Online search revenues have grown
$3.5B
In the past two decades, the overall
advertising market has grown
$7.7B
+$0.8B
captured revenues from
print directories
+$2.7B
from overall advertising
market growth
from $4.4B in 2002 to $3.0B in 2018 in nominal terms
Australian media landscape trends
from $0.1B in 2002 to $3.6B in 2018
classified revenues
(92% of overall decline)
αlphaβeta | 4
Executive summary
EXECUTIVE SUMMARY
The Australian media landscape has fundamentally changed in the past two
decades. The internet democratised how content is created and consumed,
enabling new channels of communication between businesses and
consumers.
These changes have significantly disrupted traditional newspaper revenues,
which have fallen by almost a third as the market for printed classified
advertisements dissolved.
Between 2002 and 2018, newspaper revenues fell $1.4 billion, from $4.4 billion
to $3.0 billion. Ninety-two percent of the decline was from the loss of
classifieds, which contributed $1.5 billion of newspaper revenues in 2002, but
just $0.2 billion by 2018. Most of these classified revenues have been captured
by online pure plays: digital-only businesses that target specific niches such as
job advertisements, second-hand goods, or real estate listings. Almost none was
captured by Google.
Compared with classifieds, other newspaper revenue streams – circulation and
display advertising – have been relatively stable, with most (78%) of the losses
from print offset by gains in online over the past two decades. While print
circulation revenues fell $0.5 billion in the 16 years to 2018, this was offset by a
$0.2 billion increase in online circulation. And while print display advertising
revenues fell $0.4 billion, online display revenues grew $0.5 billion.
αlphaβeta | 5
Executive summary
EXECUTIVE SUMMARY
Australian advertising revenues – including display,
classifieds, search, television, radio and other
categories – have grown overall despite the fall in
newspaper advertising. The total Australian
advertising market grew $7.7 billion in 16 years to
reach $16.6 billion in 2018. This equated to an
average annual growth rate of 4.0% (CAGR) over
the period.
Online search advertising grew from $0.1 billion in
2002 to $3.6 billion in 2018. Three-quarters of that
was captured from new opportunities as the
overall advertising market grew. The remaining
24% of online search revenues was captured from
traditional print directories ($0.8 billion).
Classified revenues grew from $1.6 billion to $1.9
billion between 2002 and 2018. However,
newspapers yielded share in the classified market
to online ‘pure plays’: real estate listings sites;
online job boards; automotive classifieds and
others.
Advertising and search revenues
Globally, the demand for news has remained
strong. Print circulation has remained stable in the
five years to 2018, while paying digital audiences
have grown rapidly. Global print circulation fell by
just 0.5% between 2013 and 2018. In the same
period, digital circulation volumes increased by
307% to reach 31.5 million paying subscribers.
Overall, the slight dip in print circulation volumes
of 3 million was more than offset by the 26 million
increase in paid digital subscriptions.
More Australians are reading the news, and are
doing so more frequently than in the past. Total
news readership – including readers of print and
online publications – is higher than in 2002 and
82% of news readers say they access news at least
once a day, with 56% of people doing so more
frequently.
A majority of Australians (52%) still prefer to
access their news offline, including via TV, radio
and printed newspapers. But consumer
preferences are shifting. The share of Australians
who prefer offline news has fallen 4ppt from 56%
in 2017. Social media is also becoming an
increasingly prominent source of news. More than
1 in 5 (21%) Australian adults now use social media
as their primary source of news (+5ppt from 2017).
Reader preferences
αlphaβeta | 6
αlphaβeta | 6
What caused the decline in
Australian newspaper revenues?
1
αlphaβeta | 7
Australian newspaper revenues
have declined significantly over
the last two decades
OPPORTUNITY
Australian newspaper revenues have fallen
by almost a third from $4.4 billion in 2002 to
$3.0 billion in 2018.
1
In 2002, newspaper revenues totalled $4.4
billion across online circulation, print
circulation, online advertising, and print
advertising. Revenues peaked in 2008 at $5.5
billion, before falling significantly during the
global financial crisis.
Between 2002 and 2018 total newspaper
revenues fell by $1.4 billion, to $3.0 billion.
This amounted to a 32% fall.
This period was characterised by significant
innovation in the media sector. New
advertising developments included Google
AdSense which launched in 2003, YouTube in
2005 and Facebook ads in 2007. There were
also changes in consumer behaviour
associated with the launch of the iPhone in
2007, the growth of mobile technologies and
devices and the advent of ubiquitous high
speed mobile broadband.
03 04 05 07 08 09 15 16
$5.1
10 11 12 14
$3.2
$3.7
17 2018
Online circulation
2002
Online advertising
$4.7
Print advertising
06
Print circulation
$4.4
$3.4
$4.6
13
$5.1
$5.5 $5.5
$4.8 $4.9
$4.0 $3.9
$3.6
$3.0
$5.0
Launch of
YouTube
Launch of
the iPhone
Facebook
Ads launch
GFC
Mobile 4G
launched in
Australia
Launch of
Google
AdSense Facebook buys
Instagram
+ >
Online ad revenues
overtake news
publishers’ print ad
revenues
-32%
NEWSPAPER REVENUE
Fairfax
introduces
paywall for
SMH and
The Age News Corp moves
The Australian
behind paywall 1 (2019) PwC, Entertainment and Media Outlook 2019 – 2023; (2013) Franco
Papandrea, State of the Newspaper Industry in Australia.
Sources: IAB; PwC; AlphaBeta analysis.
Australian newspaper revenues over time
Nominal $AUD billions, 2002-2018
αlphaβeta | 8
The loss of classifieds accounts for
92% of the overall newspaper
revenue decline
OPPORTUNITY
$1.5
$0.2
$1.6
$1.2
$1.3
$0.5
$0.8
$0.2
Print classified2
2002
Print display
2018
Online circulation
Print circulation
Online display
Circulation
$4.4
Display
Classified
$3.0
-$1.3B
-$1.4B
NEWSPAPER REVENUE
1 (2019) PwC, Entertainment and Media Outlook 2019 – 2023; (2013) Franco
Papandrea, State of the Newspaper Industry in Australia; AlphaBeta analysis.
2 Newspaper classified revenues are assumed to include print classifieds only,
although some offer free digital classifieds or have readers advertise on
affiliated digital classifieds businesses such as Domain and Seek.
Note: Components may not sum exactly to totals due to rounding.
Sources: IAB Online Advertising Expenditure Report; PwC Entertainment and Media Outlook; AlphaBeta analysis.
Australian newspaper revenues
Nominal $AUD billions, 2002-2018
The total decline of $1.4 billion between 2002
and 2018 involves a significant change across
the segments of newspaper revenues.1
Circulation revenues declined from $1.3 billion
to $1.0 billion between 2002 and 2018. Print
circulation declined from $1.3 billion to $0.8
billion, which was partially offset by an
increase in online circulation of $0.2 billion.
Display advertising revenues increased from
$1.6 billion to $1.7 billion between 2002 and
2018. This involved a $0.4 billion decrease in
print display advertising, offset by an
additional $0.5 billion from advertising on
online news sites.
Most of the overall $1.4 billion decline has
come from the loss of newspaper classifieds.
These small, pay-per-line advertisements
contributed $1.5 billion – over a third – of
newspaper revenues in 2002. But by 2018,
newspaper classifieds generated just $0.2
billion, accounting for 92% of newspapers’
total revenue decline over the period.
αlphaβeta | 9
$1.30
$0.83
$0.09
$0.13
$0.24
Circulation revenues have fallen $0.24B due to losses in print, and lower per-reader digital subscription fees
Circulation revenues for newspapers fell $0.24
billion between 2002 and 2018, reflecting a fall in
print revenue offset by digital growth.
Print circulation fell $0.48 billion, of which almost
80% was due to readers switching from print to
digital subscriptions.2 The remaining $0.1 billion
was lost to a general decline in print readership.
Meanwhile, digital circulation revenue grew $0.24
billion, offsetting half of the print decline. This
includes $0.01 billion from new online readers and
$0.13 billion from dual readers, who subscribe to
both digital and print.3
The remaining $0.09 billion was gained from the
print readers transferring to digital subscriptions.3
This was lower than the loss of print circulation
revenue because the average price is lower for
digital subscriptions.
Newspaper circulation revenues totalled $1.06
billion in 2018, comprising $0.24 billion (24%)
from digital and $0.83 billion (76%) from print.
Changes in newspaper circulation revenues
Nominal $AUD billions, 2002-2018
Decline in print
circulation
2002
$0.01
-$0.38
-$0.10
Print readership
transfer to digital
Net readership
increase
Dual readership1
Print readership
transfer to digital
2018
$1.06
Print circulation Digital circulation
The decline in print circulation comes in
addition to the print readership decline.
This suggests that each printed copy is
read by a larger number of people, driving
down the average revenue per reader.
-$0.24B
NEWSPAPER REVENUE
αlphaβeta | 9
1 Dual readership refers to people who read both digital and print newspapers, and accounts for the additional revenue from adding digital subscriptions to readers’ print subscriptions. 2 (2019) PwC, Entertainment and Media Outlook 2019 –
2023; (2013) Franco Papandrea, State of the Newspaper Industry in Australia. 3 (2008) Australian Press Council, State of the News Print Media in Australia; (2018) Roy Morgan, ‘Newspaper masthead readership grows to 15.9 million’; (2019) Roy
Morgan, ‘Over 15.7 million Australians read newspapers in print or online’.
Note: Decomposition of circulation revenue is indicative due to data limitations. Components may not sum exactly to totals due to rounding.
Exhibit sources: PwC; Roy Morgan; AlphaBeta analysis.
~6.7m people are reading
digital & print newspapers
~5m people read newspapers online only
αlphaβeta | 10
$1.6
$1.2
$0.5
Newspaper display advertising
revenues have grown overall due to
digital gains Newspaper display advertising revenues
Nominal $AUD billions, 2002-2018
OPPORTUNITY
2002
Print
2018
Digital
$1.7
Newspaper display advertising revenues
have grown modestly since 2002, increasing a
total of $0.1 billion in the 16 years to 2018.
As of 2018, newspapers generated a total of
$1.7 billion in display advertising revenues,
including print advertisements and
advertisements displayed on their websites.
Revenue from print display advertising fell by
a quarter ($0.4 billion) during the period, from
$1.6 billion in 2002 to $1.2 billion in 2018.1
However, these losses have been more than
offset by early gains in digital display. As more
consumers access the news on their
computers and mobile devices, newspapers’
online audiences and digital advertising
revenues have grown.
Digital newspaper display advertisements
have grown from nascency in 2002 to a market
that generated $0.5 billion in 2018. Online
advertisements now account for 29% of
newspaper display advertising revenues.1
+$0.1B
NEWSPAPER REVENUE
1 (2019) PwC, Entertainment and Media Outlook 2019 – 2023; (2013) Franco
Papandrea, State of the Newspaper Industry in Australia; AlphaBeta analysis.
Sources: PwC Entertainment and Media Outlook; State of the Newspaper Industry in Australia; AlphaBeta analysis.
αlphaβeta | 11
Online, ‘pure play’ sites have captured
the majority of classified revenues
The loss of classified advertising has been a major
driver of total newspaper revenue decline.
Classified advertisements include short, highly targeted
advertisements that may be posted by either businesses
or individuals in a specific section of newspapers or on
specialised listings sites such as Domain, Carsales and
seek.
In 2002, newspapers had 96% of classified revenues. By
2018 the total classified advertising market had grown
to $1.9 billion, but newspapers accounted for only 12%
of the market.1
Newspapers yielded share in the classified market to
online pure plays – digital-only businesses like Seek,
Domain and Carsales that focus on specific vertical
markets.
Real estate classifieds moved from print newspapers to
REA and Domain which gained a combined 40% share of
total classified advertising revenues by 2018.2 A
significant share of job advertisements moved from
print classifieds to online, with the largest online player
Seek capturing a fifth of the total classified advertising
market between 2002 and 2018.3 Automotive classifieds
also moved online, with Carsales capturing 12% of the
total classified market. Other online players including
eBay captured 16% of classified revenues in 2018.
As of 2018, newspaper classified revenues amounted to
$0.2 billion.
Classified advertising revenues, print newspaper vs online
Nominal $AUD billions, 2002-2018
96%
4%
Total
classifieds
$1.6B
12%
31%
20%
12%
9%
2% 14%
Total
classifieds
$1.9B
2002: Newspaper share 96% 2018: Newspaper share 12%
Online Other online

NEWSPAPER REVENUE
1 (2019) PwC, Entertainment and Media Outlook 2019 – 2023; (2019); IAB, ‘Online
Advertising Expenditure Report – Quarter Ended Dec. 2019 (CY18)’; (2013) Franco
Papandrea, State of the Newspaper Industry in Australia; AlphaBeta analysis. 2 (2019)
REA, Annual Report 2018; (2019) Domain, 2018 Annual Report; AlphaBeta analysis. 3
(2018) Seek, Seek Limited FY18 Results Presentation; (2019) Seek, 2018 Annual Report;
AlphaBeta analysis
Note: Newspaper classified revenues are assumed to include print classifieds only, although some offer free digital classifieds or have readers advertise on affiliated
digital classifieds businesses such as Domain and Seek. Classified revenues from pure play sites have been sourced from financial disclosures and exclude other sources
of advertising revenue such as display advertising. Seek’s classified revenue has been estimated from its total advertising revenue as no advertising split is available.
Components may not sum exactly to totals due to rounding.
Sources: IAB Online Advertising Report; REA; Domain; Seek; Carsales; AlphaBeta analysis.
αlphaβeta | 12
αlphaβeta | 12
Where did the growth of online
search revenues come from?
2
αlphaβeta | 13
$3.0
$1.9
$2.7
$3.6
$1.2 $0.7 $1.2
$1.1
$1.6
$2.8
$3.6
0
2
4
6
8
10
12
14
16
18
$0.6
$0.5
$8.9
The advertising market grew
significantly despite print
revenue declines
Australian advertising revenues
Nominal $AUD billions, 2002-2018
The total Australian advertising market grew
$7.7 billion from $8.9 billion in 2002 to $16.6
billion in 2018. This equated to 4.0% average
year-on-year growth (CAGR) over the period.
Underneath this headline growth rate there
was substantial reallocation across the major
components.
Many of the established broadcast segments
such as television and radio grew modestly.
Television advertising revenues grew from $2.7
billion to $3.6 billion (2% CAGR). Radio
advertising revenues grew from $0.7 billion to
$1.2 billion (3% CAGR).
The established print segments fell over time.
Magazines fell from $0.6 billion to $0.5 billion
(-0.6% CAGR). Newspaper advertising revenues
fell from $3.0 billion to $1.9 billion
(-2.9% CAGR).
This was offset by rapid growth in online
segments. Online search revenues grew from
$0.1 billion to $3.6 billion (30% CAGR). Online
display revenues grew from $0.1 billion to $2.8
billion (28% CAGR) and online classifieds grew
from $0.1 billion to $1.6 billion (23% CAGR).
Online search has captured 35% of all
advertising growth between 2002 and 2018, to
be 21% of the overall market.
Note: ‘Newspapers’ category includes print classifieds, and display advertising both in print and on newspapers’ online sites. Online search, display and classified
revenues exclude online newspaper advertising. Sources: IAB Online Advertising Expenditure Report; PwC Entertainment and Media Outlook; AlphaBeta analysis.
$0.5
TV
2002
Online classifieds
Print directories
$0.3
$0
2018
Online search
Online display
Online directories1
Other2
Magazines
Radio
Newspapers
$16.6
$0.7
+$7.7B
ONLINE GROWTH
$0.1B each from
online search,
online display
and online
classifieds; $0
from online
directories
1 Online directories are sites such as TrueLocal and Yelp, which list business names,
reviews and other details. 2 ‘Other’ category includes outdoor/out-of-home and cinema
advertising.
αlphaβeta | 14
Online search, display and classified
advertising revenues totalled $8.5B
in 2018
Online search, display (including social display) and classifieds
accounted for just over half (51%) of the overall advertising
market in 2018.
Of the total $8.5 billion spent on these online advertising
categories in 2018, search accounted for $3.6 billion.1 Most of
Australia’s online search revenues go to Google, which has a 96%
share of the online search market. This is not an area that has
traditionally competed with news publishers.
Regular online display advertising – in which advertisers display
content on third-party websites – was valued at $1.8 billion.2
Newspapers accounted for 29% of this market, and Google has a
small share via its AdSense revenue (4%).3
Online display advertising on social media platforms was valued at
$1.5 billion in 2018. Google accounts for a small share of this,
primarily through its YouTube platform which makes up 8% of this
component. Note YouTube’s share reflects net revenue, excluding
payments to publishers.
Online classifieds were valued at $1.6 billion in 2018 in Australia.4
Google has virtually no presence in this market which has been the
largest source of newspaper revenue loss.
ONLINE GROWTH
1 (2019) IAB, ‘Online Advertising Expenditure Report – Quarter Ended Dec. 2018 (CY18)’. $8.5
billion figure excludes online directories. 2 (2019) PwC, Entertainment and Media Outlook 2019 –
2023; (2016) Morgan Stanley, Australia Media, internet and Technology; AlphaBeta analysis.
Includes statistics for online and social display advertising categories. 3 (2018) Alphabet Inc,
United States Securities and Exchange Commission: Form 10-K for the fiscal year ended 31
December 2018; Google, ‘AdSense revenue share’; (2011) Doubleclick (Google), What’s Trending
in Display for Publishers?; AlphaBeta analysis. 4 See footnote 1 above.
αlphaβeta | 15
Online search, display and classified advertising revenues totalled $8.5B in 2018
Estimated online advertising market share1
% of market revenue, 2018
1 Excludes online directories. 2 Online classifieds account for $1.6B of the total $1.9B generated by print newspaper and online classifieds. Components may not sum exactly to totals due to rounding. 3 The market share of social media platforms such as Facebook, LinkedIn and
Twitter are estimated based on secondary research that is not explicit about how payments made to content creators are treated; 4 Google’s display ad revenues are expressed in net terms, excluding payments to content creators; 5 Non-social media display, largely traditional
websites and content publishers; 6 Facebook includes all other social media platforms that it owns (e.g. Instagram); 7 Other websites include all other websites excluding Google, Facebook, Domain, REA, Seek, Carsales, eBay, newspapers and social media.
Sources: Alphabet Inc. Form 10-K; REA 2018 Annual Report; Seek 2018 Annual Report; Domain 2018 Annual Report; Carsales 2018 Annual Report; IAB Online Advertising Expenditure Report; Morgan Stanley Research; Statista; DoubleClick; AlphaBeta analysis
Online video advertising generated $1.4B in 2018, and sits
predominantly in the $3.3B of display ads (regular and social)
$1.8B
4%
64%
96%
Search Online Classifieds
11%
29%
27%3
65%3
$3.6B
Display – Regular5 Display – Social
3%
15%
14%
3%
23%
35%
$1.5B $1.6B
2
Google Seek Domain REA eBay Carsales Newspapers (digital) Facebook Other social media 6 Other websites7
4%4 8%4

ONLINE GROWTH
αlphaβeta | 16
Search advertising has grown to $3.6B,
predominantly from new opportunities
The value of online search advertising has
grown significantly from less than $0.1 billion in
2002 to $3.6 billion in 2018. Google captured a
large share of this market over this time period.
Online search advertising grew $3.5 billion in the
16-year period, which amounts to a CAGR of
30%. Just over three-quarters ($2.7 billion) of the
growth came from new opportunities as the
overall advertising market grew. In other words,
search won market share over other categories
of advertising, but did not actually reduce the
absolute value of advertising spend in these
other categories.
Online search has captured 35% of all advertising
growth since 2002.
The remaining $0.8 billion of online search
revenue growth was captured from print
directories such as the Yellow Pages and other
sources of information. Advertising revenues for
print directories have ultimately declined to
zero, losing a total of $1.1 billion since 2002. Of
this, $0.8 billion was captured by online search
and $0.3 billion was captured by online
directories such as TrueLocal and Yelp, which list
business names, reviews and other details.1
No other category of media advertising has
declined materially in absolute value since 2002
that is attributable to online search.
Online search (2002) $0.1B Captured from
print directories1
$0.8B
$2.7B Captured from
market growth2
Total
$3.6B
1 This value reflects that the absolute value of advertising dollars from print directories declined by $1.1B post 2002 (ultimately to zero), with $0.3B captured by
online directories and the remaining $0.8B captured by online search. No other category of media advertising has declined materially in absolute value since 2002
that is attributable to online search; 2 This value reflects market growth capture resulting from share gain vs. other media advertising categories (i.e. relates to
growth other media could have captured if they held share, but does not include any actual reduction in absolute value of ad spend in other media
Sources: IAB Online Advertising Expenditure Report; PwC Entertainment and Media Outlook; AlphaBeta analysis
ONLINE GROWTH
1 (2019) IAB, ‘Online Advertising Expenditure Report – Quarter Ended Dec. 2018 (CY18)’; (2019)
PwC, Entertainment and Media Outlook 2019 – 2023; AlphaBeta analysis.
Online search advertising revenues – estimate of sources
Nominal $AUD billions, 2018
αlphaβeta | 17
αlphaβeta | 17
How have reader preferences
changed over time?
3
αlphaβeta | 18
Globally, paying audiences for
news continue to grow, driven
primarily by digital circulation
Globally, the demand for news has remained
strong. Print circulation has remained stable
over the five years to 2018, while paying
digital audiences have grown rapidly.
1
Global print circulation figures remained
relatively stable between 2013 and 2018,
falling by just 0.5%.
However, paid digital circulation has grown
rapidly as publications deploy new payment
models and content strategies. Data shows
that consumers are willing to pay for digital
news. Between 2013 and 2018, digital
circulation volumes increased by 307% to
reach 31.5 million paying subscribers.
Across all news publications globally, the fall in
paid print subscriptions has been more than
offset by growth in paid digital news
subscriptions. Between 2013 and 2018, the
number of paid print subscriptions fell
approximately 3 million while paid digital
subscriptions increased by 26 million.
Sources: World Association of News Publishers, World Press Trends 2019
READER PREFERENCES
1 (2019) World Association of News Publishers, ‘World Press Trends 2019’.
0
35
550
560
5
10
15
20
565
555
25
30
40
25.7
31.5
20.3
2013 2014 2015 2016 2017 2018
7.7
12.0
15.9
-0.5%
307%
Print
Digital
Global average daily print and digital circulation
Millions of units daily, 2013-2018
αlphaβeta | 19
41%
56%
36%
26%
23% 18%
More Australians are reading the
news, and doing so more
frequently than in the past Net readership of Australian newspapers
Millions of readers, 2002-2018
The underlying demand for news is strong.
Data shows that more Australians are reading
news, and are doing so more frequently than
in the past.
Total newspaper readership has grown, with
Australian newspapers serving a total of 15.7
million readers as of 2018, up from 15.0 million
in 2002.1
The frequency at which Australians access the
news is also rapidly increasing. In the two years
to 2018, the number of people who accessed
news multiple times a day a day increased
15%.2
More than eight in ten (82%) of news readers
now say they access news at least once a day,
while 56% say they access news more
frequently.
Sources: Roy Morgan; University of Canberra; AlphaBeta analysis.
15.0
15.7
2002 2018
+5%
2016 2018
+15%
Less than once a day
More than once a day
Once a day
Frequency of Australians accessing news
% of online adults, 2016-2018
READER PREFERENCES
1 (2019) Roy Morgan, ‘Over 15.7 million Australians read newspapers in print or online’; (2008)
Australian Press Council, State of the News Print Media in Australia; (2007) Australian Press Council,
State of the News Print Media in Australia; AlphaBeta analysis. 2 (2018) University of Canberra,
Digital News Report: Australia 2018.
αlphaβeta | 20
Australian news preferences have
changed over time, with social
media playing a bigger role
A majority of Australians still prefer to access
their news offline, including via TV, radio and
printed newspapers. But consumer
preferences are shifting, with 1 in 5 adults
now using social media as their primary
source of news.
For most Australians, offline news channels –
TV, radio, newspapers and others – are still
their preferred method of consuming news. In
2020, 52% of Australian adults said they
preferred to access news offline.1 However,
this is 4 percentage points lower than in 2017,
as some consumers move to online
alternatives such as news websites, social
media and other platforms.
Social media has become an increasingly
prominent source of news. In the 5 years to
2020, the share of Australians who access
news primarily through social media increased
5 percentage points. More than 1 in 5 (21%)
Australian adults now use social media as their
primary source of news, up from 16% in 2017.1
Sources: Digital News Report 2018, Digital News Report 2020
READER PREFERENCES
1 (2020) University of Canberra, Digital News Report 2020; (2019) University of Canberra, Digital
News Report 2019; (2018) University of Canberra, Digital News Report 2018.
Preferred method of consuming news in
Australia
% of online adults, 2017-2020
Social media as primary source of news in
Australia
% of online adults, 2017-2020
56%
2018
44% 47%
2017
53%
2020
48%
57%
43%
2019
52%
-4ppts
Online (e.g. social media, news sites, etc)
Offline (e.g. TV, radio, newspapers, etc)
16% 17% 18%
21%
2017 2018 2019 2020
+5ppts
Appendix: Methodology
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Key Assumptions:
▪ Total net readership remained relatively flat between 2002
and 2008
▪ Community newspapers net readership declined by ~1%
p.a.
Calculation checks:
▪ Total net readership as a percentage of the Australian
population aged 14+
▪ Trend in readership for individual newspapers 2009-2018
▪ Trend in newspaper circulation 2002-2018
Approach to estimate total print readership Sources
Estimate net readership for
major newspapers 1
▪ ABS
▪ AMAA
▪ Roy Morgan cross-platform
2018 net readership
▪ Roy Morgan press releases
▪ We estimated net readership for major newspapers using
available data from Roy Morgan (e.g. net readership for 2012)
▪ Estimations were based on trends reported in other news
reports and Roy Morgan press releases
Estimate net readership for
local community newspapers 2
▪ We estimated net readership for local community newspapers
using available data from AMAA and Roy Morgan.
▪ We assumed that net readership for local community
newspapers had declined ~1% p.a. since 2008
▪ ABS
▪ AMAA
▪ Roy Morgan press releases
Estimate total net readership
for all newspapers 3
▪ We estimated the proportion of readership that overlaps
between local community newspapers and major
newspapers from available data
▪ We then estimated total net readership by adding net
readership figures from (1) and (2) and subtracting overlap
▪ ABS
▪ AMAA
▪ Roy Morgan cross-platform
2018 net readership
▪ Roy Morgan press releases
Estimating total print
readership
We combined data from the ABS, AMAA,
and Roy Morgan to determine the total
number of print newspaper readers in
Australia between 2002 and 2018.
We used this data to determine total
readership for major newspapers, and
for local community newspapers.
Recognising that some proportion of
readers read both major and community
newspapers, we looked to avoid doublecounting by estimating and subtracting
the overlap from our total net readership
estimate.
Due to data limitations, readership
figures prior to 2008 were extrapolated
based on trends in the data. Our
calculations assumed that total net
readership remained relatively flat
during this period. Net readership of
community newspapers were assumed
to fall by about 1% a year. This was based
on conservative extrapolations of
community newspaper readership
declines between 2013 and 2016.1
We crossed-check our analysis against
data on newspaper circulation and
readership statistics for individual
newspapers.
Sources: ABS; AMAA; Roy Morgan, AlphaBeta analysis
METHODOLOGY
1 (2016) Roy Morgan, ‘Australian Community Newspaper
Readership results’
αlphaβeta | 23
Search ad revenue
▪ Google’s search advertising revenue was estimated
using a top-down approach.
▪ First, we estimated the total size of the search
advertising market in Australia and then
determined Google’s share of this market.
Display
ad
revenues
AdSense
(display
-regular)
YouTube
(display –
social)
▪ To estimate Google Australia’s AdSense revenue,
we analysed Google’s publicly disclosed traffic
acquisition costs – which is the revenue it pays to
partner websites that run Google ads or services –
and assessing Australia’s share of these costs.
▪ This figure was then used to estimate Google
Australia’s display advertising revenue from
AdSense.1
▪ To estimate Google Australia’s YouTube revenue,
we first estimated YouTube’s gross advertising
revenue from YouTube’s share of the Australian
online video advertising market.
▪ Subsequently, we estimated the total payments
YouTube makes to content creators (Australian and
international) to calculate YouTube’s net
advertising revenue.2
1 Google pays website publishers 68% of the revenues they generate via AdSense
2 YouTube content creators are paid approximately 55% of total advertising revenues generated by YouTube
Sources: AdSense (Google); Doubleclick (Google); IAB Online Advertising Expenditure Report; Morgan Stanley; PwC Entertainment and Media Outlook; Statista; AlphaBeta analysis
Google’s online
advertising revenues
Approach to estimate Google’s
online advertising revenues
Google
AdSense
advertising
revenue
(display –
regular)
YouTube
advertising
revenue
(display –
social)
Google search
advertising
revenue
Global traffic
acquisition
costs
Australia’s
share of
AdSense
impressions
Global
impression
Total spend on
online video
ads in
Australia
YouTube’s
share of
online video
ad spend
% of revenues
retained by
YouTube
Top-down
Total spend on
online search
ads in
Australia
Google’s share
of search ad
revenue
Top-down
Estimating Google’s online
advertising revenues (1/2)
Google’s online search and display
advertising revenues have been
estimated using a top-down approach.
This involved first determining the size
of each market in Australia, then
determining Google’s share of each.
We determined the total size of the
Australian search advertising market
using market research from IAB
Australia, PwC and IBISWorld.
We identified the Google businesses
that generate its online search and
display revenue streams. Google’s
search advertising revenue is
generated by its search engine
business. Its display advertising
revenues are generated by its video
platform YouTube and its website
monetisation business, AdSense.
We then relied on a range of publicly
available data sources including
financial disclosures, market research,
regulatory reports, and news articles
to determine the revenue generated
by each of these businesses. Data
sources for these estimates are listed
on next page.
We validated our estimates using a
bottom-up approach outlined in
AlphaBeta’s Google Economic Impact
Australia 2019 report.
METHODOLOGY
αlphaβeta | 24
Source: AlphaBeta analysis
Estimation Metric Source
Google Search
advertising revenues
Online search advertising market size ▪ IAB Australia (2019), ‘Online Advertising Expenditure Report’
▪ PwC (2019), ‘Entertainment and Media Outlook’
▪ IBISWorld (2019), ‘Online Advertising in Australia’
Google’s market share in online search ▪ ACCC (2019), ‘Digital Platforms Inquiry: Final Report’
▪ Statista (2017), ‘Share of Google in the revenue of general search advertising in Australia’
▪ IBISWorld (2019), ‘Online Advertising in Australia’
Google AdSense
advertising revenues
Global traffic acquisition costs related to AdSense
(converted to AUD)
▪ Alphabet Inc (2018), ‘United States Securities and Exchange Commission: Form 10-K for financial
ended 31 December 2018’
Australia’s share of global impressions on
AdSense
▪ Google DoubleClick (2014), ‘What’s trending in display for publishers?’
YouTube
advertising revenues
Total spend on online video advertising in
Australia
▪ IAB (2019), ‘Online Advertising Expenditure Report’
▪ eMarketer (2019), ‘Digital Ad Spending’
▪ IAB (2019), ‘IAB internet advertising revenue report’
YouTube’s share of online video advertising
spend
▪ Statista (2019), ‘Video advertising revenue market share of YouTube in the United States from
2015 to 2018’
▪ App Nexus (2018), ‘The digital advertising stats you need for 2018’
Proportion of revenues retained by YouTube ▪ Google product forums “YouTube Monetization”
▪ Influencer Marketing Hub (2019), ‘YouTube Money Calculator: Calculate how much you can
make’
▪ DrSoft (2019), ‘How to achieve success and make money on YouTube’
Estimating Google’s online advertising revenue (2/2)
METHODOLOGY
αlphaβeta | 25
Estimating the split of
newspapers’ print advertising
revenue streams
We have estimated newspapers’ display and classified
advertising revenues for 2018 based on growth of the
overall Australian advertising market, growth of online
advertising categories, and newspaper advertising trends.
In 2018, newspapers generated a reported $3.0 billion in
advertising revenues, including circulation, display and
classified advertising.1 However, within the print revenue
stream, there is no publicly available data on the split of
display and classified advertising revenues.
The overall Australian advertising market grew by $7.7
billion between 2002-2018. This market includes a range
of online, broadcast and print advertising, including online
display and classified advertising, which are growing
categories that directly compete with newspapers’ print
display and classified advertising revenues.
To estimate the share of print display vs classified
advertising revenues for newspapers in 2018, we
estimated the growth of their online equivalents over
between 2002-2018, and identified the share of this
growth that would have been captured from either new
opportunities; gaining market share from newspapers; or
gaining market share from other media.
This calculation allowed us to estimate the print display
and classified advertising revenues lost from newspapers
to online channels in 2018. We analysed these against
historical newspaper advertising trends to determine
newspaper print display and classified advertising
revenues in 2018. Note: Display and classified newspaper revenues prior to 2013 were estimated using secondary research from the University of Canberra and IAB Australia
Source: AlphaBeta analysis
Approach to estimate display and classified newspaper advertising
Estimate the growth of
online display and
classified advertising
1
▪ First, we measured the growth of online display and classified
advertising and identified the revenues each of these categories
captured by:
i. gaining market share from other advertising categories; vs
ii. capturing growth of the advertising market.
▪ We analysed the revenues captured by gaining market share to
estimate the total revenue captured from print newspapers by
online display and advertising categories between 2012 and 2018.
▪ Finally, we estimated the proportion of revenues that newspapers
lost from display vs classified advertising based on their
trajectories and how their share of newspaper advertising had
changed over time.
▪ From this, we were able to estimate newspaper display and
classified advertising revenues in 2018.
Estimate the revenues
captured from
newspapers vs other
media advertising
2
Estimate the revenues
captured from
newspaper display
and classified
advertising
3
METHODOLOGY
1 (2019) PwC, Entertainment and Media Outlook 2019 – 2023. Newspaper classified revenues are
assumed to include print classifieds only, although some offer free digital classifieds or have readers
advertise on affiliated digital classifieds businesses such as Domain and Seek.
αlphaβeta | 26
Online search, display, classified and directory advertising revenues grew
significantly between 2002-2018. Some of that growth came from capturing
market growth of Australian advertising overall, while some came from capturing
market share from print advertising categories.
We estimated the flow of revenues between print and online advertising in 2002-
2018 using the following method:
▪ Where a non-online advertising category declined in absolute terms between
2002 and 2018, the lost revenues were allocated to the most relevant online
advertising category (eg. print classifieds to online classifieds, and print
directories to online search and directories).
▪ Where a non-online advertising category grew in absolute revenue, we
assumed the category captured part of the growth in the advertising market
between 2002 and 2018 (eg. TV).
▪ The remainder of the growth in the advertising market between 2002 and
2018 was allocated to online categories – including online search, display,
classifieds and directories – to reconcile with the known 2018 revenue values
for these categories from secondary sources.
▪ Accordingly, for each online category the 2018 revenues consisted of the 2002
revenues, any revenues captured from other advertising categories, and
market growth captured.
Sources: IAB Online Advertising Expenditure Report; PwC Entertainment and Media Outlook; State of the
Newspaper Industry in Australia; AlphaBeta analysis
METHODOLOGY
Estimating flows of revenue in the advertising market
αlphaβeta | 27
References
▪ ACCC (2019), ‘Digital Platforms Inquiry: Final Report’. Available at:
https://www.accc.gov.au/system/files/Digital%20platforms%20inquiry%20-
%20final%20report.pdf
▪ Alphabet Inc (2018), ‘United States Securities and Exchange Commission: Form 10-K for the fiscal
year ended 31 December 2018’. Available at:
https://abc.xyz/investor/static/pdf/20180204_alphabet_10K.pdf?cache=11336e3
▪ App Nexus (2018), ‘The digital advertising stats you need for 2018’. Available at:
https://www.appnexus.com/blog/digital-advertising-stats-you-need-2018
▪ Audited Media Association of Australia (2019), ‘Quick find: newspaper’. Available at:
http://www.auditedmedia.org.au/ed/mobile/select
▪ Australian Press Council (2008), ‘State of the News Print Media in Australia 2008 Report’. Available
at: https://www.presscouncil.org.au/uploads/52321/state-of-the-news-print-media-2008.pdf
▪ Australian Press Council (2007), ‘State of the News Print Media in Australia: a supplement to the
2006 report’. Available at: https://www.presscouncil.org.au/uploads/52321/state-of-the-newsprint-media-2007.pdf
▪ Carsales (2018), ‘Annual Report 2018’. Available at:
http://shareholder.carsales.com.au/FormBuilder/_Resource/_module/NwbnH0pKFkuPGxM7cmTrw/docs/reports/annual/Annual_Report_2018.pdf
▪ Domain Holdings Australia Limited (2018), ‘Annual Report’. Available at:
https://shareholders.domain.com.au/DownloadFile.axd?file=/Report/ComNews/20180813/02008
594.pdf
▪ DrSoft (2019), ‘How to achieve success and make money on YouTube’. Available at:
https://www.drsoft.com/2018/01/24/how-to-achieve-success-and-make-money-on-youtube-in2018/
▪ eMarketer (2019), ‘Digital Ad Spending 2019’. Available at:
https://www.emarketer.com/content/global-digital-ad-spending-2019
▪ Franco Papandrea (2013), ‘State of the Newspaper Industry in Australia, 2013’. Available at:
https://www.canberra.edu.au/about-uc/faculties/arts-design/attachments2/pdf/n-andmrc/State-of-the-Newspaper-Industry-web-publication.pdf
▪ Google DoubleClick (2014), ‘What’s trending in display for publishers?’.
▪ IAB (2018), ‘Online Advertising Expenditure Report’. Available at:
https://www.iabaustralia.com.au/research-and-resources/advertising-expenditure/item/11-
advertising-expenditure/2713-online-advertising-expenditure-report-quarter-ended-dec-2018
▪ IBISWorld (2019), ‘Online Advertising in Australia’. Available at:
http://clients1.ibisworld.com.au/reports/au/industry/default.aspx?entid=5505
▪ Influencer Marketing Hub (2019), ‘YouTube Money Calculator: Calculate how much you can make’.
Available at: https://influencermarketinghub.com/youtube-money-calculator/
▪ Morgan Stanley (2016), ‘Australia, Media, Internet and Technology’. Available at:
https://comcom.govt.nz/__data/assets/pdf_file/0029/77609/Morgan-Stanley-Report-AustraliaMedia-Internet-and-Technology-27-January-2016.PDF
▪ Nielsen (2017), ‘Nielsen Digital Landscape Surfing Report’. Available at:
http://digitalmeasurement.nielsen.com/digitalmedialandscape/surfing_report.html
▪ PwC (2019), ‘Entertainment and Media Outlook’. Available at:
https://www.pwc.com.au/industry/entertainment-and-media-trends-analysis/outlook.html
▪ REA Group (2018), ‘Annual Report 2018’. Available at: https://www.reagroup.com/company/investor-centre/annual-reports/
▪ Roy Morgan (2019), ‘Newspaper Cross-Platform Audience’. Available at:
http://www.roymorgan.com/industries/media/readership/cross-platform-audiences-newspapers
▪ Seek (2018), ‘Annual Report’. Available at:
https://wcsecure.weblink.com.au/pdf/SEK/02040158.pdf
▪ Seek (2018), ‘Seek Limited FY18 Results Presentation’. Available at:
https://wcsecure.weblink.com.au/pdf/SEK/02009549.pdf
▪ Statista (2019), ‘Video advertising revenue market share of YouTube in the United States from
2015 to 2018’. Available at: https://www.statista.com/statistics/289666/youtube-share-of-totalad-revenues-in-the-us/
▪ StatsCounter GlobalStates (2019), ‘Search Engine Market Share Australia’. Available at:
https://gs.statcounter.com/search-engine-market-share/all/australia

https://alphabeta.com/wp-content/uploads/2020/09/australian-media-landscape-report.pdf