Fortune: If Washington Post can’t make it online, who can?
David Johnson July 26th, 2007
In a story that seems like it was written for LostRemote commenter Hart, Fortune’s Mark Gunther gives us “Can the Washington Post survive?” Gunther lays it all out: the declining revenues in print, the increased focus in multimedia journalism, the hyperlocal strategies. Having earned a slew of industry awards in every category from design to advertising to journalism, washingtonpost.com is arguably the best of the breed without even taking into account the 131-year-old ink-and-paper giant that bred it. CEO Don Graham poured millions into the online operation while other publishers were doubling down in print and would later pay the price.
But even the most successful online newspaper doesn’t pull down enough cash to compare to advertisers’ perceived value of print: “Advertisers paid about $573 million last year to reach readers of the company’s newspapers, predominantly the 673,900 daily and 937,700 Sunday subscribers to the Post. Advertisers paid only about $103 million to reach the eight million unique visitors to the Post’s Web sites each month.” And later in the article, Mark gives us this warming chestnut:
Getting a bigger share of national spending will be even harder, because advertisers who want to reach news readers have so many other places to spend their money - other newspapers, TV news sites, Yahoo and MSN, news aggregators like the Drudge Report and Huffington Post, even blogs. “You’re almost always going to be able to find inventory,” says Jordan Bitterman, director of media for Digitas, which buys Internet advertising for American Express, AT&T and General Motors. “So the buyer has more leverage than in the print category.”
Anyway you look at this, it isn’t a pretty picture for anyone in the news business. Print is bleeding, but our customers, the guys like Jordan Bitterman who buy our advertising space, go to bed happy at night knowing they don’t need to pay us a lot to reach our online audiences.
8 Comments Add your own
1. Cory | July 26th, 2007 at 3:00 pm
“You’re almost always going to be able to find inventory.”
That’s why it’s so critical to own local niches.
2. tdc | July 26th, 2007 at 3:34 pm
i’m giving a little free help to a very hyperlocal effort the last week or so.
i can’t believe the wonderful traffic this little thing is generating.
how they’ll monetize those eyeballs is still to be decided, but i’m f’in impressed.
i agree with cory… someone in a much larger local media company would be wise to hook-up with this effort and ‘own’ this niche… do like Terry Heaton says and provide a local ad network (something out of these kids’ league) and leverage this talent that seems to me to never tire.
3. aidian | July 26th, 2007 at 4:38 pm
I’m still not sure why online is getting such lower CPM than print — I ignore the vast majority of print ads and skip the vast majority of tv ads. Well targeted online ads are at least occasionally relevant and get my attention. And when I’m really making a buying decision online’s the first place I turn… and I’m the demo advertisers are always talking about wanting to reach.
4. discreet_chaos | July 26th, 2007 at 7:00 pm
Aiden - It may depend on what you’re trying to find advertised. Sure, I can go to Kroger’s site to see their weekly ads, but I don’t know if the extra items that they advertise on Saturday are online because I know where their ad is in the paper and it’s near the other supermarket chains.
I know that Hobby Lobby runs their ad on Sunday and where it’s at in the paper and though I could click from website to website and when I’ve been in the market, I’ve followed it online; But, there really isn’t anything easier for when you’re shopping for a car, then flipping open to a single section of the paper and comparing the deals.
Oh, and I have to also say that in addition to the furniture ads, I usually see the department store ads, but that’s the wife’s domain and I usually just glance at the pretty girls.
5. Randy Hoffman | July 27th, 2007 at 7:02 am
One thing to remember about online advertising today is that 90%+ of all online ads are placed by national advertisers. Local advertisers have yet to really embrace and invest in online advertising in a significant and ubiquitous way. That is going to change soon.
6. David Johnson | July 27th, 2007 at 7:10 am
@discreet_chaos: you paint a very clear picture of how traditional forms of advertising work for you, and why they work is clearly because you have been trained and know where to look for them. this is a trust issue. you trust that the paper will have the ad insert, and you trust that the information in it is reliable and up to date. therefore, this is the value proposition for advertisers to use print to reach you and try to influence you to make a purchasing decision.
i talk a lot about trust and security in online commerce. we offer at the very least a perception of security, but we are still working on building trust both in our audiences and in our client advertisers. and trust just isn’t granted overnight for most people. we can’t move up the pyramid to the higher levels until we establish that sense of security.
the blessings of online advertising, hypermeasurement and hypertargeting as well as the ultrathin barrier to conversion, are a double-edged sword that we are still learning how to wield without hurting the ourselves or the ones we love.
when you see a display ad in a static/broadcast medium, the message is delivered and the transaction is done. the conversion onus then lies on the receiver to buy/do something either buy going to the store, picking up a phone, going online, etc. — a thick wall. we’re comfortable with these propositions because they have evolved with us and we are conditioned to accept them or filter them the same way we will either come to a complete stop at the sign, or kind of roll through it because we know the corner so well.
while we have had electronic distribution and reach over television and the internet for a long time, the web is anchored (pun intended) in hypertext referencing — even before graphical browsers started us down the multimedia road, the core of the web is simply hyperlinking.
whether the content is text, graphic, or video, the problem has always been the value proposition in going blindly down the rabbit hole when you click something. you have to be able to trust that when you click, you will be safe and secure and you will get something valuable back. at the core, it seems to always be a time issue - what used to be time to download is now time spent weeding through oceans of irrelevant content to find something meaningful.
going hyperlocal is only one part or one way to deal with this. local or national, building an online reputation where people trust you is the heart of it, and that is just not sexy. impatient investors want immediate results and buy on speculation, but the time it takes to build credibility can’t be ramped up. it calls for good content, clear and thoughtful presentation, and the right mix of advertising — we damaged our cred by going with quick fix remnant banner inventory for click here to get smiley icons or x10 peeper cams that actually coached people not to look at advertising or just plain not trust it.
so will the advertisers come to your hyperlocal content — if you want the right kind of advertisers, only if they trust you. they trust their print or broadcast ad, they can see it, hold it and understand it because they assume the feeling they get when they look at it is transferred to other viewers. it is an issue of perceptual and mental accounting.
i think we see the biggest disconnect when the people buying advertising aren’t a part of the demographic they are trying to reach.
7. discreet_chaos | July 27th, 2007 at 12:09 pm
Actually David, while I agree with the concept of online advertising, one of the big difference in the examples which I cited is space.
Online, I may see an ad that says “Shop Kroger” and if I click it, it may lead me back to their weekly savings, but that takes effort on my part; While, when I see the full-page, color ad for Kroger in the Saturday paper, I see what’s actually on sale without doing anything. The same can be said with all of the other examples that I cited.
In my opinion, the two mediums are different because of what the consumer has come to expect. We don’t expect or particularly want a big screen for every ad and if we were to run across a site with car dealer ads, we only want one ot two banners and not a large ad from every dealership in town.
In my opinion, comparing online to print is like comparing apples to oranges. I’m sure most people ignore the little print ads which are the equivalent of banners, but they are served by those which are closer to a catalog or product list in the paper. And, not because they were necessarily trained, but because they’re two different animals.
8. Tasos | September 5th, 2007 at 3:26 am
Cool!
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