Log Off: Hold the Obituary for Newspapers

by Shawn Riegsecker, Dec 29, 2005, 12:06 PM

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Media reports on the fate of print newspapers just keep coming. Knight-Ridder was recently pressured to go on the auction block, newsroom layoffs are at an all-time high, and as of last November, newspaper circulation in the u.s. was down 2.6 percent compared to the same period the previous year, according to the Audit Bureau of Circulations.

At the same time, there is evidence that a rosier future for the newspaper industry resides on the Web. Last June, Nielsen/NetRatings reported that 21 percent of online users who read newspapers now read those papers' Web editions instead of their print ones. If this data point is accurate -- it actually seems conservative to me -- then print circulation declines of 2 to 3 percent may be only the beginning.

Many publishers who fear online cannibalization have begun to see the writing on the Web. Major newspaper holding companies have been gobbling up digital marketing companies, as Gannett and Scripps did with PointRoll and Shopzilla, respectively. Even the New York Times, whose owners have been among the most outspoken regarding cannibalization, has invested heavily in digital assets. The Times Co.'s acquisition of About.com is one example.

Indeed, now that more newspapers realize the power of their brands online and a few are seeing solid revenue gains through their Web properties, I expect the oldest and most well-respected names in media will become big winners online. This isn't about the death of newspapers; it's about which newspapers will successfully segue their premium brands online and how well they'll do it.

The power of news brands on the Web is already paying off for local publishers. In all areas of content, local sites branded by premium news outlets are delivering committed, high-demo-graphic audiences. But interactive agencies have been reluctant to purchase advertising on local sites because they haven't been able to scale their campaigns nationally and target them locally. Agencies and brands wanting to do local targeting with national reach can only buy on Yahoo! Local or geo-target through one of the other portals. This means that these news-branded local sites have suffered along with their print brethren, while major Web-only brands have soared.

But Web-only brands can garner only so much local mindshare. When readers open their local dailies, they see major brands represented, thanks largely to buying services such as Newspaper Services of America, Novus, and the National News-paper Network. Nothing like NSA has existed for the online world, so the online versions of these newspapers haven't enjoyed this advantage. Blind network aggregators aren't desirable for most branded advertisers or sites, and sites that do business with Google beyond indexing risk diluting their brands.

Local buying services should change all that and help keep newspapers as attractive for advertisers online as they have always been for print. The looming challenge for local media is how to garner their fair share of growing online budgets. The local segment is currently receiving just 3 to 4 percent of those budgets.

Such local brands as Advance, Belo, Scripps, Cox, Hearst, McClatchy, Media General, and others are working with buying services like Centro to increase the budgets. Brands like Allstate, American Airlines, Dell, Ford, and Mercedes-Benz, via their agencies, are starting to turn the corner.

As ad dollars continue to migrate online, where do you expect print dollars from premium brands to land? We're betting they land on local media with news brands that consumers have trusted for generations.

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