Online Papers Encounter Complexity, Competition Not Found Offline

Arthur Sulzberger, Jr., Chairman of the NY Times Co., spoke at the 58th World Newspaper Congress in Korea, which was covered in The Korea Herald. According to the article, Sulzberger argued that the Internet did not represent a crisis for newspapers, but rather a growth opportunity.

That's partly true. But Sulzberger's upbeat assessment doesn't acknowledge the complexity of the online marketplace vs. the offline, traditional local or regional newspaper market.

Traffic measurement and analytics firm Hitwise simultaneously reported that three-fourths of the NY Times' online traffic came from outside the New York/New Jersey/Connecticut area and that in the context of other newspaper sites, between one-third and two-thirds of traffic is coming from beyond the scope of the papers' geographic regions. This is largely attributable to third-parties, such as Google News and Topix, that refer traffic to local newspaper sites.

Online certainly represents an opportunity to reach new markets and potentially attract new advertisers, but it also represents a challenge for papers that increasingly need to deliver value to their current advertisers via the Internet.

If you don't deliver audiences that care about your advertisers' products and services, you can't deliver value to those advertisers. In other words, if I as a California resident visit the Houston Chronicle Web site via Google News, I probably don't care about local Houston Jobs, Cars and Real Estate (or private-party ads). I don't necessarily even care that it's the Houston Chronicle. I may simply be interested in the headline or the "Runaway Bride" story, for example.

Very few papers — the NY Times is an exception — can compete online as national advertising platforms. Newspaper sites thus need to remain competitive as advertising vehicles for their traditional, local advertisers as readers (especially youth) increasingly adopt online as the preferred news medium. (The desire to monetize out-of-market readership is undoubtedly a contributing factor behind the Times' push toward online subscriber fees.)

For all the reasons we've previously discussed, that's a creative, cultural and competitive challenge.

This Post Has 2 Comments

  1. D

    Are newspapers (LA Times, NY Times…) further diluting the value they provide to their advertisers by placing Google text ads in the online versions of their newspapers? At nytimes.com, these 2 boxes abut each other: “Our Advertisers” and “Ads by Google”. By placing Google ads in their publications, newspapers seem to be both capitulating and dealing themselves further blows by promoting their online competition. In any instance, it seems that local advertisers are being shortchanged; they may receive impressions/clicks, but the quality of the leads seems dubious.

    http://www.nytimes.com/2005/03/23/dining/23fult.html?pagewanted=2&ei=5090&en=0125bfc94be59785&ex=1269234000&partner=rssuserland

  2. Greg

    It's easy for the papers to plug in AdSense and they get money for it w/o any effort. What they should of done is set up a newspaper ad network (sort of what Real Cities largely unsuccessfully tried to do) and served newspaper advertisers exclusively.

    Hindsight is 20/20.

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