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December 30, 2008

The Year in Online Newspaper Advertising: a Brief Overview

Which were the biggest online ad industry stories of '08? Readers can wait for my year-end roundup story tomorrow in ClickZ News to find out which we thought made the cut.

One that was certainly important but not necessarily of sweeping impact for the industry as a whole was the ongoing saga of online newspaper advertising. The launch of quadrantOne and Yahoo's APT platform were probably the most significant events.

In February, Gannett Co., Hearst Corporation, Tribune Company, and The New York Times Company launched quadrantOne. The goal was to grab more national ad dollars from large brands.

The network soon added several new Web sites and publishers to its network, all of which are also partnered with Yahoo.

Now, it's been two years since Yahoo began signing ad and search deals with newspaper publishers as part of its newspaper consortium project -- another one that's meant to save them through higher display ad revenue from brand advertisers, among other things. Though the partner group has grown significantly, there's much work to be done, including getting all of Yahoo's paper partners on its APT ad management platform, which finally launched in September.

The consortium in a way let go of the Yahoo apron strings in August when it appointed a Tribune man, Michael Silver, as its new executive director. The partners also formed deals with Zillowin '08, creating a real estate related ad network.

Adding another wrinkle to the drama, Centro's acquisition of McClatchy-owned newspaper ad network Real Cities ended an era begun by the now-defunct Knight Ridder. The buy ended the existence of Real Cities as an entity; Real Cities was a division of Knight Ridder until McClatchy acquired KR in 2006.

Despite the fact that the industry has joined hands in various network efforts, the outlook is grim as paper publishers grapple with falling online ad revenues -- the ones that were supposed to counteract the bleeding on the print side.
Indeed, after its first ever reported drop in online ad revenue in Q2 2008, the industry drifted another few notches in Q3. According to the Newspaper Association of America, online paper sites brought in $749.8 million in Q3, a drop of 3 percent from a year before.

Newspaper industry layoffs abound and will probably get worse in 2009. At this point, it's not clear whether those have affected online ad sales teams. But if digital media is truly a last hope for newspapers, they'd do well to keep their digital ad sales operations strong.

What did I forget?

Posted by Kate Kaye at December 30, 2008 4:46 PM

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Comments

Nice piece Kate. 2008 was truly a bad year for print and I think 2009 will be even worse.

There's a recap on a site called Metue (http://metue.com/12-30-2008/2008-newpaper-business-review-2009-projection/) that lists some of the big events and Rupert Murdoch's take on how the industry must evolve.

That and your piece combine to give a pretty good illustration. I think once the broader year end ad numbers are out, the picture will be even clearer.

For big newspapers, its evolve or fade away.

John  January 2, 2009 3:45 PM

Kate, I noticed that the media industry analysts believe that the decline in online advertising revenue is particularly significant -- because it indicates that the newspaper industry's ability to engage an online audience is being questioned by marketers.

Perhaps the branding of a "newspaper" is part of the problem -- with the recent history of some high-profile print media journalists either fabricating stories, or simply not checking their facts, etc.

David H. Deans  January 3, 2009 11:43 AM

Hey David,

The decline in ad revenue is partly due to a drop in classifieds spending, as well as a general drop in display ad CPM rates. I'm not sure that marketers question the inherent value of online newspaper sites, but several other factors are affecting their ability to attract more ad revenue:
- Their stories are distributed across the Web, and some argue this dilutes their brands as a result.
- Their sales teams in many cases are still not well suited to sell online advertising.
- There are countless places online to get news -- sites with increasingly positive brand affinity.

There are many other reasons, but the newspaper firms that are getting it recognize the need to engage their local communities by offering them valuable tools and information about their cities and neighborhoods, and allowing them to connect with others in their areas. They're banking on that translating to ad dollars, which is why we're seeing things like the MomsLikeMe sites or more social high school sports content and tools on paper sites.

Honestly, I don't think the Jayson Blairs of the world are really to blame. However, such incidents probably have led some to seek out non-mainstream news outlets.

Kate Kaye  January 5, 2009 11:29 AM


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