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Last year’s news: Newspapers are dead? November 26, 2007

Posted by vsap in Blogroll, Uncategorized.
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Dakota makes compelling points that are likely agreeable to most newspaper execs and being pursued by them in one form or another right this minute. However, at the risk of sounding like Fizziwig, wishing to preserve a certain way of life, I have to say that the readership erosion is not unanticipated and not likely to send newspapers to the scrap heap anytime soon. When launching CNN Ted Turner proclaimed that newspapers would be dead by 1988. Yes, newspapers have had to change due to CNN, and the mass of online and offline outlets where people consume media. But hasn’t CNN evolved with the advent of Fox News? Isn’t broadcast radio changing to adapt to its satellite cousins? I bet HDTV or DLP is on the minds of every TV exec, don’t you? My point is this: Behavioral targeting is simply market segmentation wrapped in new age clothes. Daily newspapers have created sections and “communities” which their non-daily counterparts have been doing for generations. So, while I’m a proponent of knowing, understanding, and using all the online media available, and I’m aware the rising generation may not be enamored by print (in any form) like I am, I’ll still enjoy going to the porch in the morning and picking up the paper. That’s a behavior I, and many like me, won’t be breaking in this lifetime.

 

Response to this on 6.8.06

 

Print Newspapers Become Endangered Species As Online Publishing Climbs Food Chain
by Dakota Sullivan, Thursday, June 8, 2006

EVERY TIME A SALESPERSON ASKS you to renew your newspaper subscription, do you find yourself thinking, “Is this even worth the $24.95 a year?” Sure, $24.95 isn’t that much, but when up-to-the-minute news is a mouse click away–and free–why should you pay for a subscription to a print publication? Offline publishers are struggling with that very question themselves.

It’s no secret that newspapers and other offline publications have rapidly dwindling readership, as more readers view their news online. Most newspapers have tried to make the move online with some success, but revenues gained have not been able to replace the money lost from offline subscriptions. Printed newspapers generate 20 to 100 times the revenue per user than do their online counterparts, largely due to subscription fees. Charging for content online has proven to be ineffective, leading to heavy reliance on ads to drive revenues, but ad revenue is restricted by readership and the amount of page content that can be created. With such limitations, how can offline publishers monetize the online channel and stay in operation for the coming years? The answer is: by using ad networks and behavioral targeting.

Let’s fast-forward to a Saturday morning in the year 2012: You get out of bed, put on the coffee, but instead of stepping out on the front porch to pick up the paper, you sit down in front of your home computer and click on your local newspaper online. One by one, the offline publications that have been a part of your morning routine have faded out of existence. It’s not because of environmental sanctions on paper production, or the astronomical cost of ink. Like most endangered species, these print publications have been driven to extinction by something higher on the food chain; in this case, it’s online publications.

Although the Internet may have the potential to help newspapers stay alive, advertising revenues from publishers’ Web sites must be maximized to sustain the company in the long term. Like with any medium, the challenge lies in the limited amount of ad space available: sell “X” impressions available at “Y” CPM and you get your maximum revenue. However, CPMs have already increased dramatically for many publishers. So it’s time to turn to the other side of the equation: inventory.

Enter behavioral targeting for publishers, a solution that creates an “extended audience” by following readers across an ad network of over 1,000 sites, giving publishers the ability to sell many more targeted ads. Historically, there has been a direct correlation between the size of a publication and the amount of money it can make. A 300-page issue of GQ brings in more revenue than a 25-page business journal. But with behavioral targeting, a publisher’s online revenue is limited only by the strength of its brand.

An ad network with behavioral targeting offers a way for Web sites to serve ads to their readers as they surf other sites across the network, dramatically increasing ad inventory beyond the space on their own site and enabling advertisers to see more ad impressions from their target audiences. Furthermore, behavioral targeting allows publishers to grow revenue without creating additional content or building more infrastructure. Publishers negotiate and sell the ads directly, giving them control of their own destiny.

While the gradual loss of print newspapers is inevitable, newspaper publishers may avoid that fate if creative new ad models are explored. By creating new online revenue streams through behavioral targeting, newspapers can maintain the freedom and leadership they’ve always enjoyed. Print newspapers may be heading for the scrap heap. Their online counterparts however, may be preparing for their most lucrative season yet. 

Dakota Sullivan is CMO of BlueLithium, Inc.

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