Outlook for Newspaper Websites

Traditional Publishers Urged to Offer Multimedia Content and Ads

Jun 3, 2009

Troubled newspapers are getting online advertising advice from such varied sources as Price Waterhouse, Borrell Associates and their own Newspaper Association of America

Daily newspaper publishers hope their websites can offset the declining print advertising they have experienced in recent years, but the jury is still out on how much of the loss the sites are geared to make up. Early 2009 brought the publishers a mixture of good and bad news. First the good news:

Newspaper Websites Record Response

The Newspaper Association of America (NAA) reported that newspaper websites averaged more than 73.3 million unique monthly visitors in the first quarter of 2009. That was a record and a 10.5% increase over the first quarter of 2008.

After studying more than 3100 websites owned mostly by newspapers, TV and radio stations, Borrell issued a report titled "What Local Media Sites Earn." Some of its findings:

Local newspaper online ads topped $2 billion for the first time in 2008. Online advertising in all local sites totaled $12.6 billion and is expected to reach $13.3 billion in 20009.

Newspaper websites grabbed a higher percentage of local advertising than any other media sites. One newspaper site captured 78% of its market.

"Newspaper companies effectively arrested their online share decline in 2008 after losing an average of four points per year since 2005."

Ad Marketing & Cross Selling

According to Fred Aun of ClickZ.com, the president of Borrell Associates, believes local media websites "are beginning to understand how to take advantage of the 98,000 salespeople they have. "There's a little bit more sophisticated cross-selling going on," Colby Atwood said.. "They are beginning to add online-only salespeople, about 30% more, and those people are contributing."

World Association of Newspapers

Price Waterhouse conducted a global survey of newspapers in cooperation with the World Association of Newspapers (WAN). It concluded that newspapers "still have a strong and relatively loyal reader base" and that they are perceived as more reliable than other media."

The report said newspapers should be able to transfer their trust and content production advantages to new media platforms such as websites and mobile phones.

"New technologies such as enhanced web services, 2D barcodes, smart phones and RSS offer newspaper publishers new opportunities to reach various target audiences," the PW report said.

Website Income Fell in 2008

However, the NAA website shows that newspaper website income fell 1.8% in 2008, the first loss since NAA began reporting that income in 2003. The newspaper website income peaked in 2007 at $3.166 billion and dropped to $3.109 billion in 2008.

Both the Burrell and Price Waterhouse studies concluded that few newspapers were capitalizing on the reader trust and content creativity they can bring to online and mobile media.

Publishers are still experimenting with best strategies for generating income from website content and how much of that content to provide free.

Price Waterhouse said "while deriving revenue from paid web content remains a struggle, consumers have demonstrated a willingness to pay for content on devices such as Apple's iPhone and Amazon's Kindle."

To fill more than niche roles in the future, newspapers must learn to use new digital technologies to take advantage of the trust and content creativity they have developed over decades of publishing.

The copyright of the article Outlook for Newspaper Websites in Web Advertising is owned by Carroll Trosclair. Permission to republish Outlook for Newspaper Websites in print or online must be granted by the author in writing.