Web revenue for newspapers stalling
Don Day October 13th, 2008
The New York Times on newspapers: “The growth in online advertising they saw as their salvation has slowed to a crawl.” Newspaper site revenue actually fell 2.4% in the second quarter, after 17 straight quarters of growth. More bad news: overall online advertising is strong - just not at the local paper sites. The story doesn’t mention local TV, but I’d be willing to guess the sites are in the same boat for the most part. There is one smart piece of advice: limit your stinking ads.
[An analyst] said limiting the ads on a page can be smart. “That high level of unsold inventory often creates a real challenge in terms of sustaining pricing or growing pricing,” he said. “In most media, especially in television, the traditional model has been that you drive sellout, and that gives you the ability to drive pricing over time.”
3 Comments Add your own
1. Rocker | October 13th, 2008 at 9:59 am
Rupert Murdoch stated just last week that restricting the number of ads on MySpace is going to be one of the keys to growing revenue.
2. Anonymous | October 13th, 2008 at 2:10 pm
Ah yes, time for another sweet, sweet LR told you so moment. Thanks for posting this one, Don. Brian Stetler’s article today about link journalism is also highly relevant to the faithful, and makes good mention of local TV sites. Would link up, but am mobile right now.
3. wtf | October 14th, 2008 at 9:45 am
remnant ad positions devalue online ads and even worse, push out the local, relevant ads that would otherwise show up in their place.
ESPN already pulled out of remnant. Of course no local media company is ever that bold or would want to ever go first, so everyone might eventually follow.
This is pure economics. Supply and demand.
Not only that but the extra ad positions increase page load. Page load reduces page views. Reduced page views = less revenue. Less revenue = media company’s demand for more advertising…
So lets just add another ad position!
…and the cycle continues until all of your ad positions are ineffective. Local (higher CPM) advertisers cancel their buys and media company replaces their local advertisers with more remnant ads at .20 per 1,000.
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