• by Erik Sass , April 10, 2008

Newspaper Web sites hold a big lead over other local publishers in local online revenue, according to Borrell Associates, a research and consulting firm that follows the newspaper business. The Borrell survey of 3,000 local Web publishers found that newspaper sites garnered 26.9% of total local online advertising dollars, and also forecast big increases in spending for online video in particular in 2008.

Overall, in 2007 newspaper Web sites netted over $2 billion in local online advertising. Thus, according to Borrell, they dwarfed online Yellow Pages sites--which got 9.5% of local online ad spending--local TV Web sites (also 9.5%), and radio stations, which got just 2.1%.

The Borrell study also found that video is the fastest-growing segment within local online advertising--expected to rise from $363 million in 2007 to $1.2 billion in 2008.

So why are newspapers doing so well? According to Borrell, a lot of it has to do with the growth of dedicated online sales teams. This was echoed by Shawn Riegsecker--the founder, chairman, and CEO of Centro, a platform that allows national and local ad buys across many newspaper Web sites--who attributed their success to a couple of factors.

"First, as print revenues continue to slide, they're doing a better job catching those sales before they leave the industry altogether," according to Riegsecker, who added that "the newspaper industry has also done a better job of communicating their value proposition at the local level than television or radio has." Meanwhile, the advent of newspaper networks and platforms like Centro has made buying easier. And finally, Riegsecker pointed to the intrinsic strength of their brands as the primary purveyors of news and information at the local community level.

While encouraging, the Borrell findings seem to be at odds with another study released in August 2007 by the John F. Kennedy School of Government at Harvard University. The Harvard study found that while "a few newspaper sites are attracting ever larger audiences... most others are stagnant or losing ground." This included both mid-sized regional papers, which "are attracting substantially fewer unique visitors in April 2007 than they did in April 2006," and small-town papers.

The survey found that in the last two categories, "the average traffic at newspaper Web sites has remained stagnant or declined" (in the years 2006-2007).