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News consumption, multi-homing, and advertising strategies (2023)

August 22, 2023


  • Joan Calzada, Associate Professor of Economics, Universitat de Barcelona. Barcelona

  • Ricard Gil, Associate Professor & Distinguished Faculty Fellow of Business Economics, Smith School of Business, Queen’s University, Kingston, Canada


This blog article is derived from the authors’ paper entitled News Consumption, Multi-homing, and Advertising Strategies, a project of the Economics of Digital Services (EODS) initiative led by Penn’s Center for Technology, Innovation & Competition (CTIC) and Warren Center for Network & Data Services. CTIC and the Warren Center are grateful to the John S. and James L. Knight Foundation for its support of the initiative.


The media and the news outlets they comprise play a central role in supporting the effective functioning of democratic societies. Healthy media markets should guarantee that all citizens are well informed by providing access to a variety and diverse sources of information offering high-quality news, opinion-based editorials, and information analyses. There is growing concern, however, that the technological and digital transformation of this market is responsible for the decreasing amount of advertising revenues accrued by media outlets, which is preventing these outlets from supplying high-quality news to their readers. For example, traditional news outlets compete for users’ attention and advertisers with news aggregators and social networks.

The Internet has significantly reduced the costs for readers to access media outlets, allowing them to obtain information from multiple sources frequently. This ability of readers to visit several outlets is known in the economic literature as multi-homing, and it is well established to be responsible for the observed substitution of print for digital news outlets in the last two decades. This print-to-online transition raises the question of whether the change in readers’ consumption patterns is in fact the cause for the reduction in advertising revenues experienced by news media outlets. Additionally, markets advertisers may focus their campaigns in national outlets with a wider reach when multi-homing is widespread. The theoretical literature has shown that when readers multi-home, advertisers may choose to single-home to avoid spending duplication. They can save on advertising costs by placing their ads in a reduced number of outlets while still reaching a large audience. Moreover, media outlets with a large portion of readers exposed to the same ads from multiple sources may be forced to lower their ad prices, as they can only charge advertisers the incremental value of an additional impression. Our project aims to empirically examine the validity of these predictions by investigating the effect of digitalization and multi-homing on advertisers’ strategies in the Spanish media market.

We combine a rich data set detailing the geographical deployment of fixed and mobile broadband across Spanish provinces between 2007 and 2021 with a data set with province-year information on the use of Internet and incidence of readers’ multi-homing for print and online news outlets. These data allow us to show two interesting facts not documented before in the literature: (i) the roll-out of broadband networks sped up the adoption and Internet use as well as the replacement of print for online news outlets; and (ii) the digitization of the media market decreased the incidence of multi-homing of print media readers while increasing multi-homing of online news media. We complement this information with unique data on advertising activity of more than 160,000 advertisers in 57 digital and 52 print Spanish news outlets. These data allow us to show how changes in readers’ behavior can modify the advertisers’ publicity campaigns. Specifically, we are able to show that digitization has decreased advertising revenues for print media and increased those for online newspapers. Interestingly, the replacement of print media by online media has been only partial, harming regional media in particular. Moreover, the multi-homing of online media outlets has increased news outlets revenues, particularly for national news outlets.

Media Digitalization

The first digital media sites in Spain appeared in 1994 under the umbrella of two legacy news outlets (El Mundo and El Periódico de Catalunya). From there, the digitalization process of the news industry evolved very quickly. By 2007, there were around 900 media outlets, and by 2020 this number had increased to more than 3,000. From that moment on, the Spanish digitalization process followed several stages. After an initial experimentation stage that ended in the late 90s, digital outlets harmonized their structure and design and adopted a configuration (page architecture, section menu, links, etc.) close to what we see nowadays. By 2004, platforms such as YouTube, Facebook, Twitter, and Google Search became popular. In the early 2010s, with the introduction of smartphones, media incorporated video and began to offer participatory and viral content. Finally, in recent years, artificial intelligence or “high-tech journalism” has enabled new forms of content production and management.

The technological and digital transformation of the news industry has also modified the media’s business model. While most Spanish online news outlets were ad-financed and were offered to consumers for free during the 2010s, there has been a drastic reduction of print circulation and an increase in the use of news aggregators. Consequently, most national outlets and several regional outlets have introduced payment systems as a way to deal with the reduction of advertising revenues.

Readers’ Habits, Multi-Homing and Advertisers’ Strategies between 2005 and 2021

The behavior of Spanish readers has changed in the last years. The percentage of the population that declared to read a news outlet (print or online) during the period 2005-2021 was rather constant at around 43%. During this period, a large share of these readers switched from print to digital news media. In 2005, 42% of the population read newspapers, 41% on paper, 4% online, and 4.2 % through both channels. By 2021, 43% of the population read newspapers, 14% on paper, 36% online, and 6% through both channels. The overlap between these two channels reached its max in 2012 when readership reached 47%.

The multi-homing of print media and online media readers in Spain has also changed much during the same period of time. In particular, the percentage of news readers reading at least two print outlets decreased from 80% to 19%, and the percentage of readers reading at least one print and one online newspaper increased from 7% to 14%, which indicates that most print readers also accessed online outlets. Moreover, in the period 2013-2021, the percentage of readers that used at least two online outlets raised from 24% to 49%. These trends suggest that the transition from print to online readership was gradual with the extent and spread of digitalization, and readers substituted print for online multi-homing.

One of the main contributions of our paper is to show how changes in news reading patterns impacted advertising strategies of firms. While advertising revenues of print outlets steadily decreased between 2007 and 2021, advertising revenues of digital outlets increased, albeit at a slower pace. The advertising revenues of digital outlets overcame those of print outlets in 2019. Similarly, the reduction in the number of advertisers and ads in the print outlets has been partially compensated by a rather modest increase in the number of advertisers in digital outlets Specifically, in 2021 there were 19,091 advertisers in our sample of 52 print outlets and 12,122 advertisers in our sample of 59 online outlets.

The patterns described above seem to suggest multi-homing increases overall advertising in online news outlets while decreasing advertising in print news outlets. Using province-level variation in Internet access and multi-homing, our empirical analysis shows that readers’ multi-homing between print and online news outlets reduced advertisers’ spending per print news outlet, which is consistent with a goal to reduce ad duplications. In contrast, multi-homing increased revenues of national online outlets and to a lesser extent those of regional online outlets.

Multi-homing in the readers of online outlets also caused an increase in the spending of advertisers per online outlet. As expected, however, it reduced the ad-revenues of on-line news outlets due to the advertisers’ interest in avoiding duplications. Multi-homing increased the spending of advertisers, who concentrated their spending in fewer outlets, except in the case of regional outlets. Additionally, online multi-homing decreased advertising spending per print outlet. Furthermore, online multi-homing reduced the concentration of ad-revenues for both national and regional outlets.

Policy Implications

Our findings are important to understand the effects of digitalization on media markets in the near future. There is a real concern among industry practitioners and policymakers that the current hardships will have a lasting impact on the industry. The concentration of advertising revenues in a small group of media outlets might be relevant in those instances where the media and quality journalism play the role of watchdogs and whistleblowing for abuses of power. Given the salient effects of digitalization on the advertisement revenues of local and regional outlets, local communities are most affected in this regard. While larger outlets have advocated for changing their business model to a subscription base, most outlets do not have the capacity and means for such transition.