The Evolving Newsroom

US newspapers are losing the battle for local online advertising to web-only players like Google, according to the Wall Street Journal.

Internet companies had a 43.7% share of the $8.5 billion local online-ad market in 2007, while newspaper companies had a 33.4% share, writes Emily Steel. Three years ago, newspapers had 44.1% of the local online-ad market.

"Local media companies, because they are based in the communities they serve, would seem to have an edge over internet sellers when it comes to persuading the diner or corner hardware store to take out an ad. But they have largely failed to convert that advantage into sales. Instead of tailoring their sales to local businesses, many newspaper companies initially focused on selling ads to bigger advertisers who were already buying space in their print products.

"While this strategy allowed them to quickly and cheaply create a customer base for their online ventures, it also limited their growth, because they weren't expanding their customer base.

"Many newspapers also hurt themselves by simply plopping their papers online instead of creating new websites that offered advertisers something they couldn't get in print. Meanwhile, Web companies such as Google and Local.com are growing rapidly because they have made it cheap and easy for local companies to take out ads."

Then there's New Zealand's papers, many of which don't run online ads at all. In fact, do a quick search of APN titles, say Hawke's Bay today and the Bay of Plenty Times - and there are no ads. None. And the 'advertise with us' link is all about advertising in the newspapers.

Flip over to Fairfax, say the Manawatu Evening Standard and the Timaru Herald, and you will see some ads, albeit national ads for airlines and online clothing stores.

These, I think, are a new addition and a good sign. It shows Fairfax is starting to take notice of its regional websites which have for a long time looked rather unloved. APN's still do. Both, however, have a long way to go.