[opendtv] News: Online Newspaper Ads Gaining Ground on Print
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Tue, 6 Jun 2006 08:39:21 -0400
http://www.nytimes.com/2006/06/06/business/media/06adco.html?_r=1&th&emc=th&oref=slogin
Online Newspaper Ads Gaining Ground on Print
By JULIE BOSMAN
Published: June 6, 2006
IN the matchup between the print and online versions of newspapers,
signs of the Internet's ascendancy are growing stronger. As Colby
Atwood, a newspaper analyst and a vice president at Borrell
Associates, put it, "The tail is beginning to wag the dog."
According to estimates released on Friday by the Newspaper
Association of America, newspaper print ad spending in the first
three months of 2006 increased only 0.3 percent, to $10.5 billion,
over the corresponding period last year. At the same time, spending
for online advertising surged 35 percent.
"I think the handwriting is kind of on the wall that there is a large
migration to the Web," Mr. Atwood said. "Increasing amounts of
revenue and focus should be on the online properties. This is a
transition that's taking place over several years here. It's not
happening overnight, but it's definitely happening."
The numbers are still small compared with print: the first quarter of
2006 produced $613 million in online advertising, up from $454
million in the year-ago period. But it is the eighth consecutive
quarter of growth for online ads, according to the association.
Analysts say the increases show that newspapers are learning how to
harness the potential of online advertising as their print
circulation has stumbled. Last month, the Audit Bureau of
Circulations released figures showing that in the six-month period
that ended in March, daily circulation of American newspapers dropped
2.5 percent, to 45.5 million, over the period a year ago.
"I think this industry is in for exceptional long-term growth from
online revenue," said Jason E. Klein, the president and chief
executive of the Newspaper National Network, a marketing partnership
of advertisers and newspapers. Much of the current growth is coming
in the technology and automotive categories, he said.
Newspapers have been helped by the general growth of online
advertising: according to a report issued last week by the
Interactive Advertising Bureau and PricewaterhouseCoopers, total
Internet advertising revenue reached a record $3.9 billion in the
first three months of 2006.
But for many newspapers that are still developing an advertising
model, online ads are still in their early stages, said Randy
Bennett, vice president of audience and new business development for
the newspaper association, which is based in Vienna, Va.
For now, classified advertising makes up roughly 60 to 70 percent of
online advertising for newspapers, Mr. Bennett said. At the same
time, Web sites like Craigslist that offer free classifieds are
luring advertisers away from sites that charge to place ads.
One hope for online newspaper classifieds is the control their staffs
can exercise over the content, unlike free sites like Craigslist,
which are mostly managed and edited by anonymous users.
"I think newspapers will attempt to differentiate their classified
products as authentic, reviewed and updated regularly," Mr. Bennett
said. "It's a much more authentic database."
In addition to classified ads, other opportunities for growth in
online advertising include interactive ads, wallpaper ads and ads
with streaming video or audio.
John Morton, a newspaper industry analyst, noted that newspapers
could reap gains as the traffic to their Web sites increased. "The
more visitors you get, the higher price you can charge," Mr. Morton
said. "And as this transformation continues, the volume will continue
to increase."
On average, advertising accounts for roughly 75 to 80 percent of a
newspaper's total revenue. Mr. Morton estimated that online
advertising would make up 6.5 percent of newspapers' total
advertising revenue in 2006, up from 5 percent last year. "What a lot
of people don't understand about online advertising for newspapers is
that it can be highly profitable," he said.
And there have been signs that newspaper owners are devoting more
resources to their Web sites. Brian P. Tierney, the leader of a group
of investors that bought The Philadelphia Inquirer and The
Philadelphia Daily News last month, said he planned to improve their
Web site with added technology and content.
"Right now, the news industry is trying to hold on to the past, and
Brian knows that you just can't do it," said Mary Meder, the
president of Harmelin Media, a media-buying agency in Bala Cynwyd,
Pa. "There's a lot of options out there for advertising, and he has
to make his a viable choice."
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