The US economic crisis is beginning to hit its newspaper industry. After 17 back-to-back quarters of ballooning growth, online revenue at newspaper sites is falling, the New York Times has reported. In the second quarter this year, it was down 2.4 per cent compared with last year, to $777 million, according to the Newspaper Association of America (NAA). It was the only year-over-year drop since the group began measuring online revenue in 2003.
Some excerpts from the Times report:
Large papers like The Washington Post or The New York Times can sell premium ad space on, for example, a newspaper’s home page, for $15 to $50 for every thousand impressions. But these and other papers of all sizes have increasingly relied on middlemen — known as ad networks — to sell less desirable space, typically for around $1 for every thousand impressions. The networks usually charge advertisers double that or higher, industry insiders said.
A recent study from Bain & Company and the Interactive Advertising Bureau examining seven high-end publishers (their names were not disclosed) found that about 53 percent of the ad space on newspaper sites went unsold without networks last year, up from 50 percent in 2006.
Given the choice of showing an ad-free page and making no money, or using an ad network and making a few cents, many publishers choose networks. In 2007, 30 percent of the ad spaces sold on their sites came from networks, up from 5 percent in 2006, according to the Bain study.
“If we sold every scrap of inventory, we wouldn’t use ad networks, but right now it makes some sense for us,” said Jeff Webber, the publisher of USAToday.com. At Gannett, which owns USAToday.com, online revenue in the United States rose a modest 3 percent in the second quarter. Results from other chains have been grimmer. In the second quarter, online revenue dropped about 12 percent at A. H. Belo, 8 percent at E. W. Scripps newspapers, 4 percent at the Tribune Company, and 9 percent at Lee Enterprises, all compared with the same period last year.
