The Evolving Newsroom

I've touched before on the need for newspaper ad sales teams to get better at selling ads online. This post from Paul Bradshaw at Online Journalism Blog is a must-read on the subject.

He offers up "ten ways that ad sales people can save newspapers":

1. Stop treating web ads as second class
2. Stop selling adverts on static pages
3. Sell advertising against search terms
4. Give ad sales people access to the internet
5. Enable the long tail of small businesses to advertise without you doing it for them
6. Think beyond the banner: get creative about online advertising
7. Think about vouchers/coupons
8. Sell advertising aimed at the non-local market
9. Sell video ads, as well as the production of video content
10. Work in networks

Give it a read.

Johnston Press, which publishes the Scotsman and a host of regional newspapers in the UK, is selling overseas advertising on its websites. Visitors outside the UK and Ireland will see ads relevant to their countries. Johnston Press is using the same ad agency as the Telegraph, AdGent 007, according to journalism.co.uk.

Online advertising in the first quarter of the year grew 67.2 percent from a year ago to new record $46 million, according to a survey reported by NZPA (via www.publicitas.com).

IAB Insight said the advertising was up 17.91 percent up on the previous quarter despite the first quarter traditionally being slower than the fourth quarter.

The IAB report shows dramatic increases over last year in all three categories of advertising measured by the report. Display was up 68.3 percent to $11.5m, classified up 52.4 percent to $19.2m and Search & Directories up 93 percent to $15.1m.

IAB chief executive Mark Evans said the increases were not unexpected.

"We've been saying consistently for some time that we expect strong growth as New Zealand plays catch-up with other markets, and that's what we're seeing here.

"This growth is clear evidence that more advertisers are starting to spend more money online, and we expect that trend to continue for some time to come as more and more advertisers start to spend more of their advertising budgets online."

IAB chairman Lee Williams said new advertisers were starting to spend online while existing advertisers were spending more, and there was growth right across the sector.

While overseas businesses were spending 15-20 percent of their advertising budgets online, in New Zealand online advertising is still less than 6 percent of total advertising.

I can never resist a bit of doomsaying from Silicon Alley Insider's Henry Blodget. This time he's arguing that within ten years newspaper circulation and advertising revenue will be a quarter what it is now:

Why? Because:

• As circulations and ad revenue continue to fall, print economies-of-scale will reverse, cutting further into already shrinking print margins.
  
• As "green business" practices take hold, a new generation of consumers will come to view the newspaper industry as a horrifically wasteful polluter that eats forests, gobbles fuel and electricity, and farts untold amounts of hydrocarbons into the atmosphere--all to deliver information that might have been interesting yesterday.
  
• A generation of newspaper ad salespeople and ad sales buyers will gradually retire or quit, and advertisers will increasingly ask themselves why they are spending billions on ads they have no idea whether anyone looks at.
• As financial and environmental pressures increase and a better grasp of reality sets in, more papers will opt to do what the Capital Times of Madison, Wisconsin, did last weekend: Shut down their print businesses, fire a third of their staff, and put what's left online.

As ever, Blodget sparks some lively debate and the comments are worth a read.

Advertising sales on US newspaper websites are in good shape, according to a Borrell Associates survey of 3,000 sites in various-sized markets.

The survey, reported by Publicitas, found newspaper sites earned more than $2bn from local online ad sales in 2007, which gave them 27 per cent of the total local online advertising market and put them ahead of Yellow Pages and television sites.

"The largest newspaper websites achieved a majority of revenue from non-print advertisers for the first time, developing a broader base of customers to generate new revenue streams. The online-only advertisers accounted for 59 percent of the total ad revenue generated by newspaper sites."

Interestingly, "websites who employ at least one salesperson dedicated to selling online advertising averaged 87 percent more revenue than sites that relied solely on print representatives to sell online ads."

I've had a number of people tell me that print sales teams often don't yet understand the online ad space and miss opportunities to educate and enthuse clients on its merits. This survey suggests bringing in specialised online staff may be an interim answer. Any thoughts?

Another one for the outsourcing archive: a Fort Worth, Texas, newspaper, the Star-Telegram, is joining the ranks of US newspapers outsourcing advertising artwork to India. The paper is transferring 26 ad artist jobs to a US company working out of New Delhi.

And here's one for the 'well, that makes sense' archive: AP is consolidating its print, broadcast and sales divisions. 'in an effort to streamline its business dealings across media formats'.

Nytimes.com and the Financial Times have both picked up traffic to their sites since dropping their paywalls but there hasn't been a corresponding rise in ad revenue, according to Silicon Alley Insider. A couple of interesting comments on the SAI piece.

A guest post on ReadWriteWeb from Muhammad Saleem takes a look at the need for a more useful online metric. It notes that using page views is flawed, partly because high incoming traffic amounts to little when there's an equally high exit rate and little engagement.

"Furthermore, the rise of new web technologies such as AJAX which don't require page reloads to refresh elements or modules in a page, or video embeds (such as from YouTube) that allow you to watch a video and then browse related videos without ever refreshing the page, are making page views a mostly inaccurate measure and rendering it largely irrelevant."

Some suggested alternatives include attention-based metrics - which calculate the total time spent on a site or interacting with a page (or element on a page in the case of Facebook applications) as a percentage of total time that people spend online. Another is Yahoo's Buzz, which relies on popularity indicators such as comments, ratings from users, number of times something is shared and clicks on ads.

"The problem it seems, arises because there is a disconnect between the advertising industry and the publishing industry. The reason why there is an eternal quest for traffic, not only in terms of unique visitors, but also maximizing page views per visitor, is because advertising networks let you in on the basis of how much traffic you're generating, and your eventual income is based on the number of impressions (and clicks).

"While it is true that the page view as a metric is on it's way out, this isn't going to happen unless a new metric comes from within the advertising industry, which, with over $20 billion at stake, has the most to gain from a more accurate way of determining where to spend their money."

Analysts are forecasting online ad spend will surpass TV ad spend in the UK by 2009. The study, by Group M, the media planning and buying agency owned by advertising heavyweight WPP Group, projects a 31% increase in online spend this year versus a 1% rise in TV ad spend.

Emarketer notes that the UK media picture is unusual: "For one thing, the print sector remains pretty healthy. Also, the phenomenal rise of the internet has encouraged significant spending on the Web by UK advertisers, and hard evidence of online successes breeds further investment.

"Moreover, the dominance of television as an advertising vehicle is less pronounced in the UK, because TV programming is not funded by advertising to the same extent that it is in the US and elsewhere."

But it's still a sea change and although Emarketer's projections are slightly different, it agrees that online spending will overtake TV within two years.

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.