Monday, October 20, 2008

Newspapers Develop Strategies Toward the Web

At this point in the game, most newspapers have embraced the internet and are devoting both dedicated and integrated resources to support it.

-Fran Wills, senior VP-interactive and classified sales, The Dallas Morning News

In Nat Ives, "Google, Yahoo Become Print's Allies," Advertising Age, October 13, 2008

Newspapers have been working with digital media since the 1990s. During the past few years, though, they have begun to realize that if they don't figure out ways to generate substantial revenues from the internet and mobile, they will fail. The current bad economic environment is exacerbating the longterm movement of advertising away from newsprint and toward the web. Although newspapers have been attracting online advertising, the amount gained does not make up for the amount lost. "No one knows if or when online will help newspapers stop their overall declines; last year papers found just 7% of their revenue on the web," according to the Newspaper Association of America.

One way that papers have been trying to attract advertising money is to work with the web's advertising giants--Google and Yahoo. Both companies have brought newspapers into networks. Advertisers can buy ads that will end up on newspaper websites around the country, and the papers showing the ads share the revenues Google or Yahoo. The Yahoo Newspaper Consortium has its member newspapes particularly excited because it allows member papers to cross-sell employment ads on Yahoo's HotJobs site, on their sites, and in print. "Yahoo has loads of unsold inventory in local markets," said Gary Pruitt, McClatchy's chairman, president and CEO. "We're able to sell into that under our partnership. They can sell advertising into our websites as well, using their national sales force."

It's doubtful that working with these "third party advertising networks" will solve newspapers' advertising problems. For one thing, the cost-per-thousand (CPM) prices that such networks provide are usually quite low. This approach will likely be just one piece in a multi-pronged strategy that newspapers will evolve to survive in the twenty-first century.

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