• by Erik Sass  @eriksass1, October 5, 2006

There is good news for newspapers--online. Newspapers' unique online readers increased 31 percent in the first half of 2006 compared to the same period last year, according to findings of the Newspaper Audience Database released by the Newspaper Association of America.

Combining information from Scarborough Research and Nielsen//NetRatings, the NAD shows that newspaper sites averaged about 55.5 million unique visitors a month during the first half of 2006, compared with 42.4 million a month in the first six months of 2005. With unique monthly visitors ranging between 54 million and 58 million, newspaper sites averaged around 2.6 billion page views a month during the first half of 2006.

The New York Times led national papers in online audience, with a monthly average of just over 12 million unique visitors and 298 million page views, versus 8.6 million unique visitors and 129 million page views for runner-up USA Today. But the numbers flipped for print readership: USA Today led the pack with average daily circulation of 6.9 million, followed by over 4.75 million for The New York Times.

The NAD also shows a growing affinity for online newspapers among 18- to-34-year-olds, with 40 percent of all online visitors under the age of 35. An online presence boosts newspapers' total reach among 18- to-24-year-olds by 16 percent; for 25- to-34-year-olds, it's a 19 percent rise. Furthermore, in the top 50 markets, two-thirds of 18- to-34-year-olds read a paper at least once a week.

"Younger people are more and more engaged in newspaper content through their Web sites. Advertisers that want to reach them are going to have to be online," says Gary Meo, senior vice president of print and Internet services for Scarborough.

The NAD's figures for print versus online reach come from Scarborough data, which Meo said present unduplicated numbers for print and online audiences. Scarborough's telephone polls avoid duplicating readership figures by "collecting the media usage information from the same respondent. It's single-source measurement--meaning we get the newspaper use and Web site viewing information from the same individual."

Nielsen//NetRatings' data on the Web activities of online readers also paints an appealing picture. Through proprietary software installed on the computers of its online panel, Nielsen//NetRatings showed that 91 percent of online readers also recently shopped online, with 89 percent making a purchase. Seventy-one percent are online daily at work; 68 percent have broadband at home; and 56 percent used a newspaper Web site at least once a day.

On a per-reader basis, some industry observers worry that online advertising produces only a fraction of the revenue of print advertising. To replace the ad revenue earned from one print newspaper reader, analysts say newspapers need anywhere from three to 100 online readers. But the wide variance suggests a lack of firm data, casting doubt on the figures.

Whatever the ratio, it's clear that newspapers desperately need more online monetization in the face of slumping print revenue. In two separate reports last week, leading newspaper analysts issued gloomy predictions for the industry as a whole.

Print advertising is declining or stagnant across the board, according to Paul Ginocchio, an analyst with Deutsche Bank, who forecasts essentially flat revenues in the third quarter--a disappointing performance after the industry's promising 2 percent growth rate in the first half of 2006. And, in an overview of the current state of ad demand, Merrill Lynch's Lauren Rich Fine noted that "newspaper ad revenues deteriorated throughout the summer." She pointed to the continuing flight of auto ad dollars from print.