Data released last week from a custom Nielsen//NetRatings study for the Newspaper Association of America (NAA) touted strong first-quarter traffic numbers, with a record 59.5 million unique visitors in March.

"Whether it's making the titles of their articles more search engine-friendly, or purchasing news-related keywords, newspaper Web sites are getting smarter at driving traffic through search," said LeeAnn Prescott, director of research at Hitwise. News aggregators such as Google News and portals like MSN were also significant sources of traffic.

Still, this increased traffic hasn't yet translated into more advertiser dollars, a factor that remains a challenge to many newspaper Web sites.

"While online ad revenue has been growing, our share of that revenue is not in synch with our reach into the audience," said Randy Bennett, vice president of audience and new business development for the NAA.

According to Bennett, building awareness of that reach and making it easier for advertisers to buy bundles of local and national ads are key steps toward securing more ad revenue. And while deals like the recent Yahoo/McClatchy partnership represent an attempt to do just that, newspaper Web sites face an even larger obstruction to the ad revenue stream--user fragmentation.

Info from the Hitwise report revealed that news consumption is beginning to fragment, with the share of visits to the top 10 News and Media Web sites (which include newspapers like The New York Times) declining by almost 4%.

From sports Web sites to entertainment blogs, "there are literally hundreds of thousands of non-traditional sites that people are using to find their news," said Prescott.

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