Newspapers Struggling Online, Not Just in Print

    by Paul Grabowicz
    May 4, 2008

    As disturbing as the recent numbers on declining print circulation and plunging advertising revenue at newspapers have been, less attention has been paid to ominous signs of a slow-down on the online side as well:

    – Most newspaper chains reported online revenue growth in single or low double digits this quarter, compared with growth rates of 15-20% or more a year ago.

    – The amount of time the average visitor spent at most newspaper web sites declined in February compared with a year ago, according to an Editor & Publisher report on Nielsen Online data. E&P reported similar data for January.


    The stagnant economy and the tailspin in the housing market no doubt contributed to the deflated online revenue numbers. And there’s the statistical reality that sustaining high percentage growth rates becomes more difficult as the base number gets larger.

    But that doesn’t account for all the sluggishness in online revenue, and newspapers appear to be losing ground to other web sites that advertisers prefer. And if growth in online revenue is slowing, at best that means stretching out any projections about when online advertising at newspapers will finally make up for the decline in print ads.

    The drop in average time spent at newspaper web sites may be the result of success on another front: newspapers are expanding their overall online audience, bringing in new visitors who aren’t staying at a newspaper’s website as long as regular readers.


    But can newspapers effectively sell advertising if many readers just dive bomb in and skim a story? Will advertisers, especially local ones, be interested in such readers, many of whom may be arriving from afar via a search engine or news aggregator?

    Which leaves me with several questions:

    – Are there national advertising networks that are proving effective in selling ads for only casual readers of newspaper web sites?

    – What newspapers are effectively selling ads to local businesses and still showing robust growth in online revenue?

    – Or is there some other explanation for the dip in time spent online at newspapers and the tapering off of online revenue growth that yields some light somewhere in this tunnel?

    Tagged: advertising audience newspapers online readership
    • “And if growth in online revenue is slowing, at best that means stretching out any projections about when online advertising at newspapers will finally make up for the decline in print ads.”

      So who predicted that online ad revenue would make up for lost print ad revenue? Has anyone ever believed that would happen?

      The web, with its infinite niches, allows advertisers to ever-more-tightly target their advertising dollars. Newspapers are mass media plays — they aggregate fairly large audiences of general interest, usually around a geographic base.

      Mass audiences like these are not segmented terribly well. Advertisers with specific needs have juicier targets.

      Additionally, newspapers have low engagement levels with the audience. They still operate in the “voice of God” model in which they report, you sit there and take it. Comments are allowed on some sites, but that kind of participation isn’t really honored — it’s treated as a necessity or a freak show.

      Newspapers have to find a new mission and a new model. They must also shrink to smaller sizes overall, fitting their budgets to the amount of attention and participation they can draw from their general purpose audiences.

      That, or they can break themselves up into multi-niche players, a la Weblogs, Inc., but with a localized presence.

    • One of the questions that I think isn’t asked often enough is why advertisers can’t charge a premium for online ads.

      A person could build a Web site that gets a million unique viewers a month, but could not charge anywhere near what a TV show could charge for similar ratings.

      Why is that? Is it because online ads simply don’t work? People in our business should ask themselves, when was the last time they clicked on an online ad (and not by mistake)? When was the last time they were convinced by an advertisement online? And more importantly, what percentage of ads do they find online that are relevant to their interests?

      I personally find most online ads annoying, intrusive, even deceptive. I feel like by clicking on them, I’m going to infect my computer with some type of virus. Half the time, I don’t even see them. If you asked me what ads I just saw one page ago, I couldn’t tell you. But I certainly recall commercials I just watched, or ads seen in a magazine. Also, is it just me, or do I almost never see ads for the things I want.

      What can we do to lift this stigma in online ads? How can we bring up the level of beauty, relevance and trustworthiness to advertising? Every time I pick up a magazine at the dentist’s office and page through the gorgeous full-page ads, I ask myself, “Why can’t online ads be more like this?”

    • Paul Grabowicz

      The American Journalism Review has an article that answers the question I raised in my post about whether the growth in online ad revenue at newspapers will offset the drop in print revenue – and the answer isn’t very pretty:

      Bridging the Abyss
      Why a lot of newspapers aren’t going to survive

      In one scenario cited in the article, total newspaper ad revenue, online and in print, in year 2020 will only be about half what it is today.

      The story also answers the question John Proffitt had about “who predicted that online ad revenue would make up for lost print ad revenue?”

      AJR cited projections last Fall by Mark Potts at recoveringjournalist.com that total revenue at newspapers could return to current levels by about 2017.

      Suffice it to say the new AJR estimates are a lot bleaker.

    • Gary Hardee

      We need to stop worrying about whether newspapers will survive beyond the next 10 years. It is ancient technology that doesn’t address how many people engage with information they trust. I agree with Mr. Proffitt when he writes that many newspapers still operate in the “voice of God” mode. That only works for a few. So many information consumers want, expect, demand control and interaction with information to discover their own version of the truth. The Millenials may be the first generation to learn best from videogaming, including understanding key lessons from good journalism delivered through interactive medium. Newspapers never were and never will be that. They served a grand purpose, but their time is rapidly passing. But that’s OK. The avenues for journalism are so much richer today and will be even richer in the future. And in many ways journalists will find ways to make a living with these emerging media.

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