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Foreword Print E-mail

In the back of this sourcebook, you will find a listing of U.S. markets with an estimate on how much money local businesses are spending on online advertising in each market. Go to it and find the number for your market. I’ll wait.

If you’ve found the number, chances are you have just fallen out of your chair in disbelief – especially if you’re focused on selling print or broadcast advertising and online sales is not part of your daily routine.

Eight million dollars in Amarillo? Twenty-six million in Little Rock? More than $100 million in Dallas?

If you find the numbers hard to swallow, you are in good company. In his 1997 business bestseller, “The Innovator’s Dilemma,” Clayton Christensen described a phenomenon now known as disruptive technologies. A common characteristic of managers in a disrupted business is that they are unable to see all the revenue associated with the new, disruptive business line. They think the numbers are made up. From their sharply focused position in the industry – whether its vacuum tubes in the 1950s, mainframe computers in the 1970s or disk drives in the 1990s – they can’t see the new business sprouting all around them. They brush off the figures as propaganda from a would-be competitor.

In the end, virtually all of them fail to seize the new product line.

Why, then, are you in “good company” if you’re unable to see all the Internet advertising flowing through your market? Christensen’s book was subtitled, “When New Technologies Cause Great Firms to Fail.” Note Great Firms, not Bad Firms.

The newspaper industry is a great industry, led for the most part by some really great people. The same can be said of television, or radio, or yellow pages. The fact is, it’s extremely difficult to keep up with a new medium as fast-moving as the Internet while trying to manage a mature business faced with declining circulation, audience and ad dollars.

As an advertising medium the Internet is not only here to stay, but it’s also still in its adolescence. We already know of local Web operations that generate more ad revenue than a cluster of radio stations in that same market. It won’t be long before the major local Web site in a community generates more ad revenue than a local TV station in that market … and perhaps one day, more than the major daily newspaper. All the evidence – historical and otherwise, as you’ll find in this sourcebook – points to that scenario.

The question is, will advertising executives be able to manage the disruption of their core product line (i.e., printed newspapers), while incubating the new business? It is an extremely difficult task, especially when one business model gives away content and ad listings for free, and the other business model has a centuries-old tradition of charging.

SAXOTECH has shown great foresight in providing this sourcebook as a means of educating traditional-media advertising executives about the opportunities ahead. It comes at a terrific time, when traditional media is in dire need of new growth, and when local advertisers are just beginning to look for online advertising opportunities.