“I am still amazed that [ad sales] people come to me and say, ‘You know, I am responsible for the online property, and I simply cannot talk about the offline part,” Chan says. “To me, that’s a big opportunity you’ve missed if you keep doing that.”
Yet that’s the way most ad sales divisions at newspapers are structured — division being the operative word. With few exceptions, newspaper companies don’t make it easy for ad buyers who want to purchase both print and online media. The situation is further complicated by the fact that the buyers themselves haven’t yet figured out how to streamline the process. Agencies typically assign print and online duties to separate buyers.
Until buyers and sellers can come to grips with their differences and stop pointing the finger of blame at one another, the growth of advertising that could stem from leveraging both online and offline strengths for newspaper properties is likely to remain stalled.
In the early days of Internet advertising, newspapers created separate business units for print and online, setting the table for the inevitable turf wars.
“Sometimes [there was] a great deal of resentment between the offline people who had all the content and the online people who had all the [stock] options,” says Rishad Tobaccowala, president of Starcom Mediavest Group.
Then there was the little issue of insolent Internet types who once pronounced newspapers the dinosaurs of media. But the situation is changing, albeit slowly, as media companies recognize the need to cooperate, especially during the prolonged advertising slump.
“The [print] ad director and I work pretty closely together, and we spend a good deal of time on ways to integrate our sales pitches, but we’re not there yet,” says Mike Henry, director of sales at The Wall Street Journal’s<\I> WSJ.com. The Journal’s<\I> media kit combines the online and offline products. The online Journal’s “e-Pages” program offers print advertisers the opportunity to buy a prominent spot on the website for an additional 10% premium over the cost of a print ad, but relatively few advertisers take advantage of the deal. About 80% of WSJ.com advertisers also buy print ads, but slightly fewer than half of print buyers purchase an online ad.
Buyers have issues, too.<\B>
“Our biggest challenge is getting people to realize that the online world does not have to be treated differently from print, television, and radio,” says Henry, who adds that while newspapers battle with their own integration issues, buyers face a lot of the same problems. It’s unusual to find one media buyer who purchases both print and online. In those rare single-buyer situations, online is likely to get short shrift. Large national print buys — those of $1 million or more — typically do not necessitate a lot of creative dialogue between buyer and seller. A similar online buy, perhaps costing $100,000 or less, would likely require deep discussion about ad placement, special tools, access to archives, creative elements, and so forth. That’s a lot of work for a fraction of the revenue.
Buying online is a lot
Newspapers are going to have to address the complexity issue quickly, says Marc Kravitz, VP of marketing and business development at Crossmedia Services, Inc., in Chicago. Kravitz works with major retailers to develop targeted online ad campaigns. He’s been steering clients away from newspaper sites, in part because of the complex buying process.
Several newspapers have formed regional alliances so that buyers can purchase across print, radio, television and online media. But even those attempts to integrate have proven dicey, and still necessitate having both online and offline ad representatives present on sales calls.
“It can be a very tenuous relationship, because I have goals that are separate from their goals. We have to have excellent communication and trust to make sure that we are not undercutting each other,” says Terri Russo, an interactive account manager for MySanAntonio.com, a partnership between the San Antonio Express-News<\I> and KENS-TV.
The relationship is made more difficult by the fact that there are about 200 print ad representatives and only four online reps. “I might work with one [print] rep today, and not talk to them again for four months,” Russo says.
The San Antonio newspaper is one of a handful using a new technology developed by Chico, Calif.-based AdExpedia, Inc. The company’s proprietary software lets newspapers place on their websites the same full version of display advertisements, special sections, or circulars available in print. Web users can access the ads in the same familiar format via the Internet that they see in print. AdExpedia has struck deals with Petco, Big O Tires, Michaels Arts and Crafts, and Meijer Stores.
Despite the industry’s best efforts, with few exceptions, advertising alone has failed to support newspapers’ online sites. As a result, more and more sites are beginning to charge users a fee. The Wall Street Journal<\I>, at $59 per year ($29 for print subscribers) has charged from day one. The Financial Times<\I> recently announced plans to charge up to $300 a year for access to certain parts of its popular site, FT.com.
The New York Times<\I> does not charge for the use of NYT.com. It does require users to register, and to provide New York Times Digital with a certain level of personal information. The company’s online unit reported an operating profit of $200,000 in the first quarter of this year, its third consecutive quarter of black ink. Revenue increased 15%, to $16.2 million.
For most local and regional newspapers, advertising has not come close to sustaining their online efforts. The Worcester, Mass., Telegram & Gazette<\I> recently announced plans to charge for online subscriptions, saying that advertising generates only about half of the $500,000 it costs annually to run the paper’s Web operation.
At Idahonews.com, a service of the Idaho Falls Post Register, subscribers have always paid for access to the paper’s website, and the site carries no advertising.
“There’s a major flaw in the newspaper industry’s current strategy that says you drive people to websites by throwing your content online for free in hopes that you’ll drive some traffic for advertisers,” says Roger Plothow, acting editor and publisher. “Newspapers are not dinosaurs, but they’re acting like dinosaurs. Our position is much stronger than we give ourselves credit for.”
As newspapers continue to embrace the Internet, Web surfers are taking greater notice. A survey of 85 metro markets by The Media Audit showed in 2001, 28 daily newspaper websites attracted more than 20% of the adults in their market area “within the past month”— in 2000, only seven did.